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Question No. 2: Are you facing problems regarding imports/exports or tariffs? If so, what needs to be done to alleviate the problem?
Several respondents said imports, exports, and tariffs are not a major company concern or are not applicable. Those responding that way were Craig McGlynn, Jeff Ponte, Steve Simmons, Kimberly Hawthorne, Andy Rossi, Dave Smith, Barry Heid, Douglas Larsen Dan Goldsmith, John Andrews, Orin Portnoy, and Victor Wong.
Here are the other answers:
“This is becoming increasingly more difficult as our trade policies are not very fair. For instance, there is no U.S. tariff for those who import strings, reeds, and drumheads. Yet, we face tariffs even in our friendly ECC countries when we export our products. For instance, each year, more than $6,000,000 in strings are imported from Austria tariff-free, yet our strings are taxed at 2.7 percent when shipped into the ECC. In China, strings have a 17.5 percent import duty; in Argentina and Brazil, it is 16 percent. These are string-producing countries. In 2007, $411,000 worth of Chinese strings were imported into the U.S.A. and, in 2008, it was $3,800,000. If our government does not level the playing field, it may become impossible for American string manufacturers to stay competitive.” —Jim D’Addario
“[I think another way to look at it is] ‘What are some of the difficulties between manufacturing in the U.S.A. vs. overseas?’ Manufacturing in the U.S. takes much more of a commitment of money, equipment, space, and human resources. Those, coupled with taxes and government regulations regarding wages and benefits for employees, are the main reasons driving companies to go overseas for their manufacturing. Cheaper parts and labor is appealing, but many companies (including us) have horror stories to tell: everything from parts being substituted without consent to improper fit and finish to non-delivery to outright theft of intellectual property. With regards to outsourcing, I heard someone say, ‘There is the price, and then there is the real cost.’ Looking at the shape of the economy and the shape of our country compared to the rest of the world, don’t we owe it to ourselves to become producers once again?” —Cliff Castle
“Currency or tariff issues did not play a part in moving production back to the U.S.A. However, we do believe that products in our industry that are built in the U.S.A are more desirable and sought after, worldwide.” —Tony O’Keefe
“We feel that most of the import and export tariffs are fair and reasonable. It really does not affect our bottom line.” —Jody Dankberg
“We know we must pay some duties and such. That is a given. If foreign quality and reliability is good, it would be nice if extra charges, such as duties, were lowered to help us be more competitive. But that might not be the best answer for the United States. Being able to make products in the U.S.A. is still the best answer all the way around!” —Dean Markley
“Import challenges: Artificial pricing advantages that enable off-shore manufacturers to present domestic manufacturers with formidable problems. Export challenges: Currency fluctuations and freight costs impact the price of U.S.-made products, especially smaller accessory products.” —Donn Deniston
“Trademarks and copyrights can be challenging to monitor. As an independent company, it can also be futile to go after international companies who borrow designs. These last few years we have seen an increase of unauthorized sale and shipments going into other countries. There is a significant imbalance in fair trade that continues to make it difficult for U.S. goods to compete in a global market. The upside to exporting American products is the currency values make it advantageous for many export distributors.” —Bill Wenzloff
“RoHS (Restriction of Hazardous Substance) compliance is an issue when selling into foreign countries. The M3 and V6 are not compliant to RoHS and create difficulties for us when trying to sell these mics to the international community.” —Jim Mona
“Yes! Exporting, with poor exchange rates, tariffs and alike, adds up significantly. All of that makes our products nearly cost prohibitive at retail in Europe and other countries. Perhaps if the governments were far less greedy, the first words spoken about our drums wouldn’t be, ‘They’re nice but they’re so expensive.’” —Jay Gaylen
“Regarding export, which is crucially important to the U.S. economy, it would be nice to see some real support from our government. Many other countries around the world directly help their exporters to defray the cost of international trade shows and exhibitions. These shows are a valuable tool for reaching new customers in foreign markets and thereby improving our balance of trade.” —Stuart Spector
“Yes, many Chinese-manufactured consumer products coming into the U.S. do not face any tariff or import restrictions, while our core products have an approximately 17 percent tariff going into China. It’s an uneven playing field.” —Brian Ball
“No. There are no issues except for exceptionally high import duties in India.” —Ray Maxwell
“With all wood for drum sticks coming from our U.S. sources, our strong U.S. production greatly reduces any import or tariff concerns.” —Mark Dyke
“Any problems we have exporting have more to do with the requests and demands our customers put on us and not as much to do with regulatory issues.” —Al Keltz
“Export tariffs are high and increase the price of our guitars in European countries, as well as Japan, Australia, and the rest of the world. These countries do not produce their own version of our guitars. We are not there competing with their local products, but rather, with other American products. I don’t see the point of tariffs if they don’t manufacture a product of equal quality in their country to begin with. We now live in a time where a person in Germany can check prices online in the U.S., see how much more expensive that same product is in his home town, and then make decisions to come here, buy the guitar, and carry it home duty-free as personal property. The removal or reduction of tariffs would allow more free trade and much more competitive pricing worldwide.” —Bob Taylor
“We sell virtually nothing into South America because its tariffs run 60 percent and higher on our goods. For example, a Minimoog Voyager that costs $3,000 here will cost over $5,000 in South America. Our politicians should not allow any country to burden U.S.A.-made products with that kind of tax. If they do, then we should charge them a similar tariff on any goods they are attempting to export to the U.S.A.” —Mike Adams
“European tariff rates are notoriously high. In my opinion, what needs to be done is to raise import duties for products and components coming into the U.S.A. in order to level the playing field for U.S.-made products on a global level.” —Kevin Bolembach
“Some of our imported components are taxed at a high rate, which is why we are always looking for more cost-effective sources. We try to procure parts and hardware locally in the U.S. as much as possible to avoid the tariffs and save on shipping costs. Some components have exceptionally long lead times, which makes planning production a challenge. If there’s a glitch with the supplier meeting, the schedule, or if the parts come in wrong, it can literally stop production on a given product. There can always be a surprise, no matter how well you plan for the unexpected. We export a great deal without much incident, except for some of the ‘exotic’ countries. They have extremely high import taxes due to politics, which makes it harder to do business in those parts of the world.” —Dale Krevens, Tech 21
“Yes. In spite of the fact that there are a number of so-called ‘free trade agreements’ between the U.S.A. and various countries, or trading blocs such as the ECC, American manufacturers continue to face huge problems with so-called ‘non-tariff trade barriers.’ The most prevalent method other nations utilize to discourage imports are various ‘safety inspection requirements.’ ‘Safety issues’ are a loophole in almost every trade agreement and the U.S.A.’s competitors use them at every opportunity to block or stifle imports while at the same time generating revenue for their respective governments. Huge markets that do billions of dollars of business with the U.S.A. effectively block imports with red tape, trumped-up ‘safety issues’ or excessive taxes (tariffs) on imports. This is nothing new, since it’s been going on for years. Unfortunately, the people who actually negotiate these agreements for the U.S.A. are almost always neophytes who attempt to reach a fair and balanced agreement with seasoned diplomats from other nations who almost always have many decades of experience under their belts…almost invariably, our ‘team’ is like ‘lambs to the slaughter’ and the result is that the U.S.A. almost always gets the short end of the stick on these so-called free-trade agreements.” —Hartley Peavey
“Unfortunately, today we are not competing on a level playing field due to tariffs. As an example, the duty or tariff rate for products imported into the U.S. from China or Europe range between 2 percent and 6 percent. The duty rate for our American-made products exported into China is 17.5 percent. This is quite a difference. We are not looking for an advantage, only a level playing field.” —Scott Jennie
“Because of rules, regulations, and taxes, manufacturing in the U.S.A. becomes more difficult daily. Rane worries about its compressor tanks being properly inspected by the certified inspector, the city inspection of the backflow water valves, the monthly inspection of our federally mandated elevator, the OSHA (Occupational Safety and Health Administration) required paint markings on the loading docks, etc. Exporting products out of a U.S. facility has become just as complex. Tariffs are but one obstacle American manufactures face exporting to other countries. Tariffs along with VAT (value added taxes) do just what they are supposed to…make U.S.A. products less price competitive. However, tariffs are a simple money calculation; while they put U.S. manufactures at a huge disadvantage, they are easily understood. At the moment, more pernicious are the ever-increasing and ever-changing ‘compliance’ rules.” —George M. Sheppard
“Our import/export issues are no different than what every other manufacturer is facing. We’re constantly watching and reacting to the currency markets to keep our pricing stable and manage our cash flow. We also have to deal with VAT and other regional taxes, fuel prices, etc. In our business, we have the added concern of territory terms. Our rights are constantly changing as different licensing deals are renegotiated. As we gain or lose territories for a catalog, we have to be ready to react quickly to get products into or out of that market.” —Bryan Bradley
“I actually prefer manufacturing to importing. The economic climate in the U.S.A. since the mid-1980s has made it almost impossible to be a U.S.A. manufacturer in almost any business, including musical instruments. The problem I have with tariffs is they do not even come close to achieving the objective of keeping jobs in America so it simply becomes just another form of taxation in the U.S.A.” —Dean Zelinsky
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