The Trump administration\u2019s trade policies do more than increase costs for US consumers. Their historic scale and disorganized rollout are causing global disruptions. That hurts independent music gear makers and label owners. It\u2019s also ironically likely to cripple manufacturers trying to work in the USA. The only (sort of) good news: shippers and exporters are trying to find solutions, and at least some of the disruptions should be temporary. But those solutions won\u2019t come free.<\/p>\n
Even minor disruptions can ripple<\/p>\n
Damaging as the tariffs themselves can be, it\u2019s also the Trump administration\u2019s confusing rollout and roller coaster of political posturing that have turned 2025 into a mess for trade. In the music tech industry, manufacturers were finally recovering from COVID-19-induced disruptions when the year began. Yes, the pandemic lockdowns did cause some spikes in sales as customers looked for ways to fill the time when stuck at home. But remember how chip production was disrupted and products delayed, often just by marginal \u201cu-shaped\u201d changes in demand. We discovered that the global production and logistics system was highly optimized, but brittle. (The music tech industry also wasn\u2019t helped by a fire at an audio chipmaker<\/a> later in 2020, either \u2014 a reminder that adversity is always unpredictable.) <\/p>\n Now, COVID-19 and the lockdowns (and factory fires) were unforeseen and out of our control. But the Trump Administration\u2019s trade policies represent a manufactured crisis \u2014 like a prolonged tsunami hitting the world\u2019s largest economy all at once, but one the US government itself caused.<\/p>\n I\u2019ve been tracking discussions from both customers and manufacturers on this issue in the past days, and I can see everyone is (understandably) confused and frustrated. <\/p>\n Tariffs and the closure of the de minimis exception<\/p>\n First, the tariffs themselves: the US will have the highest overall import tax rate it has had in nearly 100 years. And that\u2019s the best way to think of it: the US is taxing its own importers and consumers when they bring in goods from essentially the whole world. It\u2019s a major about-face from a liberal trade policy that had helped fuel not only US economic growth, but also businesses around the world that benefit from the US market. And that includes items like synthesizers and musical instruments. Associated Press has a good explainer on tariffs<\/a> from earlier this month to get you up to speed.<\/p>\n It\u2019s not that tariffs can\u2019t make sense, or even that they couldn\u2019t be good for manufacturers. It\u2019s that these are untargeted, global tariffs, they\u2019re changing fast, and they\u2019re changing without clarity or predictability.<\/p>\n The reason you may be noticing all of this more now is that the US also eliminated a \u201cde minimis\u201d exception that exempted goods with values up to US$800 from import taxes. This began earlier this year with China, but now extends to the entire world. <\/p>\n SUSPENDING DUTY-FREE DE MINIMIS TREATMENT FOR ALL COUNTRIES<\/a> [White House, July 30]<\/p>\n And that is, to use a technical term, f***ing up all international shipping. Suddenly, with minimal notice and evidently with confusing and unclear rules and logistical arrangements, the US government is requiring a massive volume of shipments to clear customs and provide the associated paperwork. Calling this a logjam is an understatement. Reality check: US Customs and Border Protection handles some 4 million parcels daily that are covered by this rule. <\/p>\n This already caused \u201call hell to break loose\u201d<\/a> when the US administration attempted it with China earlier this year. For some reason, instead of backing off, they\u2019re now expanding the rule to the entire planet.<\/p>\n So shippers have simply halted those affected shipments to the USA entirely while carriers figure out what to do. There will be some exceptions for premium shipping like FedEx, but that will be prohibitively expensive for everything from CDs and vinyl to Eurorack modules to electronics components.<\/p>\n This also means that beleaguered US manufacturers, the ones Trump is supposedly trying to protect, won\u2019t be able to get components as easily. I can say without reservation that the upshot of this entire saga has been to accelerate the offshoring of manufacturing. That trend even began in the last Trump administration, also because of import taxes, and the Biden administration didn\u2019t move to reverse course.<\/p>\n This is not a good week to ship anything to the USA<\/p>\n Trump policies are disrupting two parts of the shipping system. One is postal clearance \u2014 that\u2019s the low-cost shipping that occurs between postal providers like Deutsche Post (sending) and US Postal Service (delivering). The other is commercial customs clearance, which is also impacted by the elimination of a de minimis standard. (De minimis just means \u201ctrivial\u201d; it\u2019s the legal term for defining something as \u201ctoo small to care about.\u201d) The USA is no longer alone in closing the de minimis exception \u2014 the European Commission has moved to do the same<\/a>, largely driven by an interest<\/a> in preventing Chinese sellers from dumping low-cost goods on the market. (Think fast fashion and TEMU.) But the EC so far has managed to do this without breaking its entire shipping system in the process. <\/p>\n The US rule change came quickly and is wreaking havoc so quickly that shippers around the world are slamming the brakes. (The rule goes into effect on August 29.) Here\u2019s a short list of countries with confirmed reports that postal services have stopped shipments for the time being. Sorry, I can\u2019t even write this without hearing this music:<\/p>\n<\/p>\n Australia (fortunately, transit service deliveries only \u2014 via third countries)<\/p>\n Austria (Austrian Post)<\/p>\n Belgium (Bpost)<\/p>\n Czechia<\/p>\n France (La Poste)<\/p>\n Germany<\/p>\n India (India Post, starting today)<\/p>\n Italy<\/p>\n Netherlands<\/p>\n Scandinavia (all of it)<\/p>\n Switzerland<\/p>\n United Kingdom (Royal Mail) \u2013 transitioning to a system that will allow <\/p>\n Canada and Mexico aren\u2019t on that list, but as they\u2019re impacted, too, it seems likely they\u2019ll also see disruptions and we\u2019ll see how carriers decide to handle this as the week goes on.<\/p>\n In most of these cases, if you try to ship something to the USA the way you\u2019re usually accustomed \u2013 via DHL, for instance \u2014 you just can\u2019t. The shipper won\u2019t accept your package, at least until a new system is set up.<\/p>\n Each country\u2019s operators are responding differently, and because of the lack of clarity, the situation may change. Here\u2019s what Deutsche Post\/DHL wrote in a press release late last week:<\/p>\n The U.S. Executive Order \u201cSuspending Duty-Free De Minimis Treatment for all After August 22, Deutsche Post and DHL Parcel Germany will temporarily suspend Shipping via DHL Express remains possible.<\/p>\n Packages and parcels that contain only gifts from individuals to individuals with a Europe-wide, shippers are raising red flags. PostEurop, which represents European operators, said that all shippers may be \u201cconstrained to temporarily restrict or suspend the shipping of goods via postal networks to the USA.\u201d <\/p>\n The complaints from these operators are consistent: inadequate time (\u201cno time\u201d was the phrase from La Poste), and a lack of information and preparation on the part of the USA. Not only are shippers not ready to adapt to these just-announced rules, but some of the rules and implementation are unclear, and the USA hasn\u2019t set up its collection system (that last one was mentioned in a complaint by PostNL to the AP). <\/p>\n And it gets worse: in the same Trump Executive Order, 14324 from July 30th, there are additional tariffs per parcel. Here\u2019s a breakdown<\/a> from ITV-owned NewsX in India:<\/p>\n Countries facing tariffs of 15 percent or less \u2013 an extra $80 per parcel. \u00a0 This means, for instance, Indian goods shipped to the US could face duties higher than their actual value, particularly for low-cost parcels. \u00a0<\/p>\n Sources\/more information:<\/p>\n Global postal services pause US shipments as end to de minimis rule nears<\/a> [Business Standard]<\/p>\n Why Are Countries Worldwide Suspending Postal Services To The US? De Minimis Rule Explained<\/a> [NewsX]<\/p>\n Europe\u2019s $64.6 billion postal pipeline of \u2018de minimis\u2019 goods comes to screeching halt<\/a> [Fortune]<\/p>\n Why Germany and Italy have suspended shipments of most merchandise to the U.S., effective immediately<\/a> [Fast Company]<\/p>\n And Branko Marcetic for Jacobin called it back in April, writing \u201cDonald Trump\u2019s erratic tariff rollout seems likely to deepen the world\u2019s dependence on China and scare off investment in US reindustrialization, undermining his own administration\u2019s stated goals. There\u2019s no art to this incoherent, self-destructive deal.\u201d<\/p>\n Putting Tariffs on Your Nose to Spite Your Face<\/a> [Jacobin]<\/p>\n (Way back in February, they talked to Catalyst editor Vivek Chibber about why capital, not labor, would benefit<\/a>.)<\/p>\n Don\u2019t panic yet, sort of<\/p>\n There are some glimers of hope here, kinda sorta. Shippers all describe these changes as temporary. So it\u2019ll feel like a sudden world embargo on the USA this week, but theoretically, we\u2019ll see changes soon.<\/p>\n Some shippers, like the UK, are also reportedly investigating changes so that the shipper pays the cost. That\u2019ll mean a higher bottom line for US buyers, but at least it\u2019ll presumably allow the person shipping to pre-clear those costs. You pay upfront, but then you\u00a0still get your package.<\/p>\n I still think that this will most hurt independent makers, both in the USA and abroad. In the USA, it\u2019ll be harder to get components; outside of the USA, makers will lose a key market. <\/p>\n It may be solvable. As has been the case all year, the main problem isn\u2019t cost so much as unpredictability. It\u2019s not just that the Trump Administration is \u201ccaving\u201d \u2014 as the \u201cTrump Always Chickens Out\u201d TACO acronym argued. It\u2019s that you can\u2019t predict from week to week what the hell is even going on. <\/p>\n And that seems to illustrate an administration that is completely clueless about manufacturing and business. Bringing manufacturing back to the USA requires planning, investment \u2014 time. Meanwhile, the main upshot of this is bringing one of the world\u2019s greatest customs and shipping systems to a halt.<\/p>\n What I find tragic about that is not so much the impact on the United States, but the fact that it\u2019ll hit independent businesses and independent makers hardest. Big transnational corporations can adapt to this kind of chaos. The people trying to make stuff just to pay their bills for the month generally can\u2019t. And those impacts will be felt not only inside the USA, but by people around the world.<\/p>\n If all of this sounds negative \u2014 I\u2019d rather get talking about this now. It\u2019s still only August, and a lot of sales in our industry \u2014 the sales that lots of independent engineers and artists rely on \u2014 happen in the fourth quarter. <\/p>\n So let\u2019s complain together. Let\u2019s compare notes. Let\u2019s figure out how to deal with this. I am not a trade or shipping logistics expert, so feel free to correct me if I\u2019ve got something wrong. I\u2019m not necessarily a great fan of rampant consumerism or capitalism, but I love the musical instruments business and independent music and all of you working in it. I hope we can surf this chaos together.<\/p>\n Addendum: do U.S. voters (and the world) get a say?<\/p>\n If you\u2019re a U.S. citizen and you want to be heard on trade policy, there\u2019s a chance. The rest of the world has more limited options, depending on your government\u2019s own negotiations and, perhaps, international disputes, as via the WTO, which Brazil just initiated in the form of a consultation<\/a>. But even the international court apparatus right now involves cases brought by U.S. states.<\/p>\n Thomson Reuters has an overview of how litigation and legislation is progressing<\/a>. TL:DR \u2014 expect this to drag out through 2026.<\/p>\n Part of the reason voters don\u2019t have more direct control is that Congress has delegated a lot of its trade responsibilities to the executive branch; here\u2019s an explanation<\/a>. But legislators are hearing from constituents about how they feel about the rules. So, you have a chance to contact both branches. You can contact your Representative and both Senators on the Congressional side, and the U.S. Trade Representative, the office of the executive responsible for these policies, directly, also has contact information. See their contact page<\/a>.<\/p>\n I say this as though any of this is normal. It\u2019s clearly not. But sheer voter unhappiness and looming mid-term elections may reignite the legislative discussion; they do have the power to get back that control.<\/p>\n Photo: <\/p>\n \u201cThe Webb Ellis Cup completes visit to Dubai as part of Rugby World Cup Trophy Tour<\/a>\u201d by Land Rover MENA<\/a>, CC BY 2.0<\/a><\/p>\n See, I put that in there just to see if anyone would notice this B757 was parked in Dubai, not Memphis.<\/p>\n \t Tags: Asia<\/a>, australia<\/a>, business<\/a>, de minimis standard<\/a>, DHL<\/a>, editorial<\/a>, europe<\/a>, explainer<\/a>, Germany<\/a>, India<\/a>, opinion<\/a>, policy<\/a>, post<\/a>, rants<\/a>, shipping<\/a>, shippingness<\/a>, trade policy<\/a>, Trump<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The Trump administration\u2019s trade policies do more than increase costs for US consumers. Their historic scale and disorganized…\n","protected":false},"author":2,"featured_media":110230,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-110229","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/110229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=110229"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/110229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/110230"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=110229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=110229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=110229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Countries\u201d changes the basis for shipping postal goods to the United States for all
postal and parcel service providers.<\/p>\n
the acceptance and transport of business customer parcels via the postal network
to the U.S.<\/p>\n
value of up to $100 and are declared as \u201cgifts,\u201d as well as documents, can continue
to be sent as usual.<\/p>\n
Countries facing tariffs between 16 and 25 percent \u2013 an extra $160 per parcel. \u00a0
Countries facing tariffs above 25 percent \u2013 an extra $200 per parcel. \u00a0<\/p>\n