Could Trump’s Tariff Wars Stop Aussie Kids From Starting To Play Music?

US President Donald Trump offered various reasons for tying off 25 per cent tariffs on goods from Mexico and Canada and doubling those from China to 20 per cent.

But these happenings in faraway countries in the northern hemisphere could down the track affect Australians picking up musical equipment, and the closure of retailers in this country.

Already, the US’s $6.27 billion musical instruments’ market is in panic mode. It’s using words like “devastating” to describe the coming storm with entry-level guitars, woodwind and string instruments in target. Because China and Mexico are among the Top 5 exporters of musical instruments and accessories to the United States.

China is the largest, estimated to be 73 per cent of units. In November 2024 alone, that was worth $54 million in music trade, according to the OEC (Observatory of Economic Complexity). 

That same month, the US imported music gear from Indonesia ($21.5 million), Japan ($10.8 million), Mexico ($10.3 million) and Chinese Taipei ($7.67 million).

As tariffs are paid by the importer (that is, American companies), it is estimated that rising prices of instruments, often imported or made with imported parts, will hurt both American gear makers and retailers.

John Mlynczak, President and CEO of the USA’s National Association of Musical Merchants (NAMM), states, “When you start raising the price everywhere of what it costs to import goods, it’s challenging, and it really threatens everything we’ve learned to do as an industry.”

Another problem is that Asian and Mexican factories supply cheaper entry-point equipment because their workforces are cheaper. Hence they are much in demand by younger players. 

The fear is that higher prices will drive future generations away from starting or sticking at it.

A Fender Guitars study found that 9 per cent of new guitarists abandon playing within a year. 

Those that hang in there spend an average of $10,000 on hardware over their playing lives, buying 5 to 7 guitars and multiple amps.

Reddit has noticed that in America, the price of Behringer synths has in recent weeks gone up by 70 per cent at retailer Sweetwater. The new Wave model reportedly went from $599 to $689, while the $569 Poly D is now tagged to $629.

We’re yet to determine what caused the rises. But it’s not helped the apprehension the US musical instrumentals sector is feeling. 

The Australian Bite

The Australian Music Association is not worried about the direct impact of the tariff wars.

“Australia doesn’t have those tariffs,” explains its chief executive, Alex Masso. “They’re close to zero – about 0.2 per cent – for music equipment and accessories. So it's not a huge problem the way it could be in America.”

That may change, of course, if Australia counteracts (extremely unlikely) or if America extends its tariffs on this country (who knows!) past the 25 per cent hit on steel and aluminium.

However, equipment prices could be affected indirectly by other factors, Masso warns.

The tariff war is creating disruption in the financial markets. A sustained weaker Australian dollar would affect equipment prices here in the long run because most of our gear is imported.

Another possibility is that when manufacturers look to new countries to base their manufacturing in, there will be extra costs – including training of new staff and setting up of new supply lines – which would have to be eventually passed on to customers.

According to the US-based Peterson Institute of International Economics (PIIE), moving a factory from China and setting up in Indonesia, say, would see prices rise by 10 to 20 per cent.

As for the possibility of Australia becoming a gear-making hub, Masso responds: ”Not really. Manufacturing is so expensive in Australia. It is impossible for an Australian company to make a $200 guitar, (they go for the) high end.”

The AMA and NAMM work closely together. “We have discussed these problems extensively, and neither of us want tariffs because we don’t want to increase the cost of playing music.”

The Australian sector is small and worth half a billion dollars and well under the radar of tariffs.

The hardest hit from possible price increases, Masso notes, are lower-income households, newcomer players and school music programs that need a reliable supply of relatively inexpensive instruments.

The Australian sector is already highly competitive. About 85 per cent of retailers and 79 per cent of wholesale companies are small or family businesses. There’s an average of seven full-time-equivalent employees for retailers and 14 for wholesalers.

Margins are extremely tight, and any kind of product price rises would have great impact. In the AMA’s The State Of The Industry Report from last October, profitability is the Number 1 issue in the industry. 

Over two thirds of businesses surveyed reported that profitability decreased in the past 12 months. For half, business was "significantly worse off" than the same time in 2023.

The report noted, “The demand for traditional Aboriginal musical instruments is experiencing a resurgence in Australia, as musicians seek to incorporate indigenous sounds into their compositions.”

This year, the Australian musical instruments sector is forecast to generate revenue of AU$606.5 million. In comparison, China will produce the world’s highest revenue with AU$17.2 billion.

In terms of value, electric guitars, digital pianos, grand pianos, acoustic and acoustic/electric guitars take up the first four places.

Then come upright amps, guitar amps, and other electronic instruments like electronic drums, bass guitars, orchestral strings, and electronic keyboards.

Last year, 74 per cent of instruments sold in Australia were from China with only 2.5 per cent from the US. However, in terms of value, because of higher prices, the US was 33 per cent and China 27 per cent. 

Mexico provided 0.5 per cent of imported units and Canada responsible for 0.1 per cent. About 0.1 per cent revenue was collected on imports from the US and Canada.

China has been a consistent source of Australian musical equipment for the past ten years (2015-2024), representing between 31 to 30 per cent. 

According to the AMA, North America has been 21 to 30 per cent; Southeast Asia particularly Malaysia and Indonesia made up 11 to 18 per cent; East Asian countries as Japan, South Korea and Taiwan were 11 to 15 per cent; Europe and the UK were 10 to 13 per cent; and other parts of the world were 3 to 4 per cent.

Australia also exports music products. Much is pro audio (primarily RODE) and acoustic guitars from Maton, Cole Clark and others.

The US is the main destination for guitar exports, representing 4000 units in 2024. The other major destinations included Japan, Germany and the UK.

What Now?

Not surprisingly, the world is looking intently at the music gear market. “When America catches a cold, the rest of the world sneezes,” Masso sums up.

Throughout 2024, the US imported $588.6 million of gear. These included $229.6 million worth of electric guitars and organs; $103.3 million of wind instruments such as clarinets, trumpets and bagpipes; $101.9 million of other stringed instruments; $81.5 million worth of parts and accessories; and $43.8 million of percussion items.

NAMM is campaigning with other bodies such as the Consumer Technology Association and National Retail Federation to get musical instruments exempt from the new rules.

They are encouraging its members to lobby politicians with victim statements.

To Mlynczak, it is essential that instruments from China and Mexico continue to cater for players at the same prices. He is also aware that while fighting for duty exemptions, players and listeners see music as utterly essential to living, the powers-that-be see it as a luxury item.

Mlynczak himself understands how obsessed young players can be about expressing themselves through music, and exchanging their casual job at Coles to become a rock star.

Growing up, he himself had no career options but playing music. In college, he majored in music. 

He couldn’t afford the Martin Guitar he lusted after. It was only when his mother and his girlfriend teamed up and gave it as a gift, that he got the guitar of his dreams.

“It was made in Mexico, and I loved the fact that it still had the brand, the quality and the signature square headstock. But I could only afford it because it came out of a Martin factory in Mexico. I still have that guitar today.”

A 2021 Fender survey found 16 million Americans aged 13 to 64 learned to play guitar in the previous two years. 62 per cent attributed it to being in the COVID lockdown, and 77 per cent to having more spare time.

67 per cent did so because they had joined bands, were right into games and hip hop, and 38 per cent identified as Latinos. 

58 per cent of beginners used TikTok weekly, and 67 per cent listened to guitar content – 48 per cent weekly and 19 per cent every day.

When Mlynczak took over the NAMM rule in 2023, he was excited that so many young people had taken up instruments, or intended to.

“Similar to my own experience, it was key that even cheaper entry-point instruments be of top quality. If your first music experience is not fantastic, the chances are you give up playing.”

For brands like USA’s Fender, Japan’s Yamaha and Germany’s Sonor Drums, it is essential to set up in other countries if they are to survive, because manufacturing costs are so expensive in their home markets.

Fender produces versions of its Stratocaster in five locations: California, Mexico, Japan, Indonesia, and China. The US-made guitars sell from $1,200.  Those made in Mexico retail in America for $800, and the ones assembled in China are on average  $200 to $600.

Cullen S. Hendrix, a senior research member at the PIIE, told Wood Central, “Because of its global supply chains, Fender can serve the high-end, collector-grade, mid-grade, and beginner markets in the United States and abroad. 

“This is a textbook example of how globalization makes a wide range of products at different price points available to a global consumer base. There would be a lot fewer guitar players in the United States if the only available instruments were American-made guitars.”

Yamaha has plants in Japan, Indonesia, India, Malaysia, Germany, France and the USA for instruments and pro-audio products. Its student-entry trumpets, flutes, clarinets, trombones and saxophone, tend to be made in China.

When Sonor Drums expanded into China because of Germany’s high manufacturing costs, they put German engineers, testers and designers also working at the Tianjin operations. Here 6,000 drum sets were made the first year, and allowed the company to survive amidst “bankruptcy” rumours.

Piano Exports By Country

Below are the 15 countries that exported the highest dollar value worth of pianos during 2023.

• Japan: US$307.1 million (35.9 per cent of total exported pianos)

• Germany: $212 million (24.8 per cent)

• Indonesia: $104.1 million (12.2 per cent)

• Mainland China: $57.5 million (6.7 per cent)

• United States: $30.9 million (3.6per cent)

• Czech Republic: $18.5 million (2.2 per cent)

• Italy: $16.6 million (1.9 per cent)

• Austria: $14.7 million (1.7 per cent)

• Poland: $12.5 million (1.5 per cent)

• France: $10.2 million (1.2 per cent)

• United Kingdom: $9.2 million (1.1 per cent)

• Malaysia: $8.4 million (1 per cent)

• Philippines: $6.5 million (0.8 per cent)

• South Korea: $5.6 million (0.7 per cent)

• Belgium: $5.3 million (0.6 per cent)

Bye Bye, Canadian Pie

How will the new Trump tariffs affect Canada’s live music sector?

Aside from gear prices going north, Canadian acts (and those from around the world) will pay more for touring visas, the strong American dollar will make it hard for them (especially the mid-tiered ones) to tour, and those who have to be paid in US dollars will bump up ticket prices.

Promoters are hoping the current anti-American feeling among Canadian music fans might see a shift towards listening to and supporting domestic artists. 

In this they are fuelled by recent songs by Canadian musicians and celebrities rushing out songs with titles as We Used To Be The Best Of Friends, We Rise As One, Elbow’s Up (a Canadian ice hockey term), Canada Ain’t For Sale, 51st State Song, Canada’s Home, I’m A Canadian and Yankee Go Home.