Following Moog Music’s alarmed email regarding US trade policy, some in the synth industry have responded that the immediate impact on manufacturers will be minimal.
Okay, so what’s going on?
The matter of discussion is still a document by the US Trade Representative regarding proposed tariffs or import taxes. These are 25% additional tariffs imposed by the USA on Chinese goods as they’re imported into the United States.
This document has changed over the past months. But the USTR does provide a public comment period for any changes – meaning, while these tariffs are set to go into effect this Friday the 6th of July, theoretically there shouldn’t be any additional changes.
And that’s where there’s a legitimate problem with the way Moog Music – and my own writing here on CDM – presented the problem.
Paul Schreiber, an engineer who has worked with multiple companies in the industry, posted a heated rebuttal to the Moog letter. That was not necessarily to defend Trump administration policy, but rather to suggest that Moog and others may have overreacted or mischaracterized the immediate realities of the policy.
Moog urges US citizens to take action to stop Trump import tax
Long story short: the idea is, the tariffs apply only to small components, like LEDs and potentiometers, but not to more significant expenses like the “circuit boards” Moog mentioned in their email.
And in fact, the cost of those really shouldn’t significantly impact the cost of US-made products, including Moog’s – even on an instrument that’s covered in LEDs and stuffed with circuits, those particular parts make up a relatively small portion of the cost. They’re not meaningless – shaving dollars and even cents off individual components is a pretty major part of the design process. But they’re not the sort of thing that would disrupt jobs or hurt the economy.
The area of confusion may be around circuit boards, as Schreiber observes – and I’m forced to admit, I agree with his assessment. He writes in a follow-up post:
If you search the tariff PDF for ‘printed circuit assemblies’, you get many hits (ATM machines, radiation detectors, etc) and here in Section 90, this one listing.
The ‘issue’ is that the listing of the tariff codes are an ABBREVIATED DESCRIPTION, not ‘as formally written’ in the ACTUAL codes.
The 9030 section of Chapter 90 is SPECIFICALLY talking about oscilloscopes. And this 9030.90.68 is referring to a non-US company, importing a ‘kit of parts’ into the USA, including a stuffed pc board, and then building a scope in the USA.
That’s not necessarily a definitive list, and it is open to interpretation but … I do tend to agree with this interpretation, unless someone can present a compelling alternative reading.
There are still reasons for the electronic musical instrument building community to be concerned. An escalating trade war between the USA and its trading partners could pose unexpected problems in the near future. And if these trading difficulties hurt the US economy, that impact could be felt, too. But it’s important to separate that from the immediate impact on making synths, which for the moment may indeed be negligible.
Other industries have greater cause to worry. The US automakers in particular are seriously concerned about costs for raw materials and retaliatory penalties abroad – but they’re impacted differently than US synthmakers are. Agriculture are concerned, too, as punitive measures cut off markets they need for exports. (And, okay, yes, synthesizers make up a much smaller part of the US economy than cars or agriculture, obviously. I guess we still have work to do? Or we have to figure out how you can ride synthesizers to different places, or … eat them.)
The DIY community I shared in my original post are harder hit, too, as a lot of their products are just these components – see Boing Boing’s story on maker products.
And there’s the fact that the US President is saying threatening things about the EU in general.
But in a heated political climate, it’s important to separate long-term risks from immediate problems, and to keep concerns in scale. For now, it’s reasonable for makers like Moog to protest isolationist or protectionist US trade policy, or heated up trade rhetoric and potential trade wars. But the rules going into effect this week, when viewed just inside the context of our industry, likely aren’t catastrophic – not yet.
I’m awaiting further comment from Moog on their activism and will update this story when that’s available.