American Loudspeaker Manufacturing Faces Factory Closures and Exporting Jobs Unless President Trump Repeals Tariffs

By: Barry Vogel
Two months ago President Trump signed into law the CARES Act, the largest stimulus package in American history. The law recognizes the critical need to quickly inject cash into the U.S. economy in order to help workers and businesses survive the current crisis, and many companies are grateful for the help. But my industry and many others continue to struggle for one primary reason: the President’s trade war with China.
As Congress has worked quickly to limit the economic damage of the coronavirus pandemic, the loudspeaker industry that I represent continues to face a steep 25 percent tariff on their components that go into loudspeakers, which include the large speakers that fill concert halls with music as well as smaller speakers that entertain families at home.
But concert venues are now empty and large public gatherings are mostly canceled. Meanwhile, many of the stores that sell loudspeakers have had to close their doors for an extended period under stay-at-home orders. With their main sources of revenue gone over the past two months, the loudspeaker industry is in free fall. It hangs by a thread as sales come to a crawl, while overhead and tariff costs still loom large. Loudspeaker companies are struggling right now—but President Trump can help by making a deal with China to end the trade war and eliminate harmful tariffs.
Tariffs are taxes that Americans pay. And in the middle of the coronavirus crisis that economists say could lead to a prolonged recession, tariffs could very well drive loudspeaker companies towards the brink of bankruptcy if they aren’t rolled back soon. Tariffs squeeze budgets and have cost loudspeaker businesses millions of dollars in additional taxes. That money could have been better spent on hiring and growing our companies. In fact, before the trade war began, several loudspeaker companies had plans to expand manufacturing and hire more American workers. But because of tariffs, our industry is now being forced to focus instead on how to survive with thinner margins and larger operating costs.
Our industry has made direct appeals to the Trump Administration. The Office of the United States Trade Representative (USTR), which oversees the implementation of tariffs and trade policy, provides tariff exclusions to select companies that file requests. Many loudspeaker companies requested exclusions, but they were not granted. The current process lacks any transparency to understand why some companies and industries are receiving an exclusion while others, like mine, are not. Exacerbating the problem further, assembled loudspeakers imported from China are exempt from the tariffs giving them an even greater price advantage over American manufacturers.
Some large, politically connected corporations were able to have their requests granted, sometimes after meeting with government officials. But loudspeaker companies were denied exclusions without explanation, leaving them and other smaller industries to shoulder the burden of the trade war. The results are the opposite of what the Administration was trying to achieve: tariffs have actually helped shrink the number of manufacturing plants in America. Worse, the trade war weakens and disrupts critical supply chains amid the coronavirus pandemic, harming our country’s response to COVID-19. All in all, America is weaker while it is in a trade war.
Tariffs are causing many American manufacturers to close their doors and collapse, allowing China to consolidate global manufacturing while facing little competition from abroad. The handful of existing loudspeaker companies in America that are facing tariffs and a recession are on the verge of closing. These businesses are asking President Trump to make a deal with China and end the trade war.

Economists have said that nobody ever wins a trade war. Now is the time to end tariffs before it bankrupts companies and further harms the economy.