Tariffs and economic uncertainty are hitting US musical instrument exports

From January through July 2025, US exports of musical instruments were 8.4 percent lower than the average over the same months in 2021–24, with even steeper year-on-year declines in key markets such as Brazil, Canada, and China. This downturn is not primarily the result of retaliatory tariffs—US trading partners have largely refrained from such measures, at least so far. Instead, the decline likely reflects a mix of factors linked to tariffs and broader trade policy uncertainty: higher input costs passed on to consumers, dampened demand for leisure goods amid economic uncertainty, and in some cases, conscious substitution away from US products. The combined effect is eroding demand for US musical instrument exports, an industry where US firms are undeniable leaders in brand recognition and product innovation.

US musical instrument exports are down 8.4 percent year to date

The United States is the world’s largest consumer market for musical instruments, with 22 million instruments sold in 2023. It is also home to some of the most iconic brands in music: Fender and Gibson guitars and basses, Gretsch and Ludwig drums, and Zildjian cymbals, just to name a few. While the United States is a major instrument exporter, its products and price points are tailored to the US domestic market, favoring higher-end, more expensive models. US musical instrument imports, especially from lower-cost producers like China and Indonesia, tend to be geared toward the needs and purchasing power of beginners and school music programs (in the United States).

The table below presents monthly US musical instrument exports (classified under Harmonized System [HS] code 92) in 2025, alongside the inflation-adjusted 2021–24 average and the percentage difference. HS 92 covers musical instruments—from accordions to zithers—as well as their parts. US musical instrument exports in the first seven months of 2025 were 8.4 percent lower than the average for the same period in 2021–24, with declines in most months except February. Double-digit declines are observed for March, April, and June. This decline relative to trend is in contrast to overall US exports, which are up 4.2 percent in 2025 year to date from the same period in 2024.[1] US musical instrument exporters are on track for their worst year since 2020, the onset of the global COVID-19 pandemic, and second worst since 2018, when the world was about 9 percent poorer in per capita terms than at present (and there were hundreds of millions fewer potential consumers).

On a country-by-country basis, the picture is mixed (see figure below). Relative to the same period in 2024, the sharpest 2025 declines among the top 20 US export destinations were for Brazil (-28.3 percent), China (-27.1 percent), and Italy (-22.7 percent). Exports to Canada have fallen 12.3 percent as well. In contrast, exports to the United Kingdom and Japan are up 14.6 percent and 10 percent, respectively.

Why?

We can begin by (mostly) ruling out one obvious candidate: tariff-based retaliation against US goods and musical instruments specifically. While the European Union and Canada have responded with targeted tariffs, musical instruments have not been included. Brazil, which saw the steepest declines, has not imposed retaliatory tariffs to date, though it has faced substantial new US tariffs.[2] Among the largest export markets for US musical instruments, only China has retaliated with catch-all tariffs that affect musical instruments. With that exception, US musical instrument exports are not being directly priced out of export markets by retaliatory tariffs.

But tariffs—and the way they have been rolled out—are part of the story, operating through indirect channels.

Higher input prices and production costs

At base, an electric guitar is a couple of magnets wired together and a bunch of little metal bits fixed to several pieces of (often exotic) wood. But even for made-in-the-USA guitars, those magnets, metal bits, and wood are often sourced from abroad or from US suppliers protected from price competition by tariffs. Section 232 tariffs on steel and aluminum—which date to Trump’s first term but were continued under the Biden administration—have pushed up prices for these critical inputs.

Exotic tone woods like ebony, Indian rosewood, and mahogany are difficult or impossible to source from the United States, which lacks the requisite climate for them to flourish, so tariffs affecting them—as may result from the active Section 232 investigation into lumber and derivative products—cannot result in onshoring and will only translate into higher input costs and/or substitution for easier-to-source (but sonically and visually inferior) woods. Section 301 tariffs on China are pushing up costs for pickups, wiring harnesses, and metal housings and parts and have been since 2018—so they can hardly be blamed for the recent and dramatic fall in US exports. In sum, higher input costs are part of—but not the whole—story.

Economic uncertainty and leisure goods sales

For most consumers, a new guitar, keyboard, or cymbal is a leisure good—a want rather than a need. Demand for musical instruments is highly, and asymmetrically, income-elastic: It expands faster than incomes rise and contracts faster than incomes fall. This is one of the reasons many pawn shops have entire walls of guitars: They are among the first purchases delayed (or resold) when the economy begins to turn sour.

Tariffs affect relative prices, but they also send signals—intended or otherwise—about the direction of travel for the global economy. The Trump administration’s transactional, highly dynamic approach to trade and security policy has already caused the International Monetary Fund to trim its 2025 global growth estimates made in 2024 by 0.3 percent and its US estimate by 0.8 percent, owing both to the direct effects of tariffs and the highly discretionary ways in which they have been applied, which has caused economic policy uncertainty to spike. In short, the near-term forecast is for storm clouds, not sunshine.

That’s not a positive outlook for people selling wants, rather than needs. It may make consumers less likely to purchase instruments at all. But given that US exported instruments are typically at the top of the price range, they may also be encouraging purchasers to choose the more modestly priced Indonesian or Chinese guitar and/or make higher-end offerings from European and Japanese manufacturers relatively more appealing. Further data and analysis are definitely warranted.

Conscious substitution

“It’s nothing personal. It’s just business.”—Opening credits to NBC’s The Apprentice

Evidently The Apprentice (US version) didn’t do so well in foreign syndication,[3] because consumers in countries targeted for US tariffs or just generally displeased by US foreign policy—which includes support for Israel and its conduct in Gaza, a retreat from global climate compacts, and waffling about US treaty commitments—appear to be taking it personally.

In the aftermath of the “Liberation Day” tariffs announced in April 2025, euro area consumers indicated they were willing to shift their purchases to non-US products, citing shifting preferences more frequently than anticipated price increases. Consumers across Europe and in Canada are organizing grassroots “buy local” campaigns, and Canadian retailers are running “buy Canadian” promotions. The question is not just one of relative prices and the direct effects of tariffs but also the “animal spirits” that are inflamed by nationalist rhetoric and beggar-thy-neighbor approaches.

These effects may be particularly acute for musical instruments, which are heavily branded, for which the country of origin (at least of corporate headquarters, if not specific models) is widely known, and which operate in a social milieu where image—especially affecting an oppositional vibe—is often rewarded. Do you want to be the Canadian drummer who shows up to a club gig in Toronto with a shiny new set of US-made Zildjian cymbals in the midst of a trade war when Canadian-made SABIANs are on offer? Economic nationalism tends to inflame nationalist passions abroad, and the choice of musical instrument becomes not just a matter of preference but one of identity and solidarity.

US musical instrument makers are being squeezed from three sides: higher costs of production, a weaker global economy and demand outlook for leisure goods, and rising resistance to US brands abroad—all three related to historic shifts in US trade policy. In an industry where US brands have enormous cultural cache, trade policy uncertainty is eroding not just their cost competitiveness but their cool.

Notes

1. Author’s calculations.

2. Brazil was initially assigned a 10 percent “reciprocal” tariff in April 2025. In August, an additional 40 percent tariff was levied via Executive Order 14323.

3. Actually, it did fantastically well—as a concept: Many countries produced versions of the show featuring nationally prominent business magnates in the Trump role.