Tariffs on US musical instruments won’t hurt industry

The tariffs China is likely to slap on US musical imports would cause US instrument manufacturers to suffer more, as they would not only face a sales slide in high-end products but also be absent from one of the world’s fastest-growing musical instrument markets, industry insiders said.

“The US manufacturing industry is withering, but the country still produces high-end expensive musical instruments… For example, the US-based grand piano producer Steinway & Sons now supplies about 95 percent of the pianos in Chinese concert halls market,” Zeng Zemin, the executive vice president of the China Musical Instrument Association, told the Global Times on Wednesday.

China in early August announced a list of tariffs on about $60 billion worth of US imports, as part of the nation's retaliation against the US’ plan to impose 25 percent tariffs on an additional $200 billion worth of Chinese products.

The items on the proposed list of US imports included some musical instruments such as upright pianos, bowed string instruments, harmonicas and electric keyboards.

As high-end pianos mostly cost more than 1 million yuan, the proposed tariffs on US pianos would certainly “lead to a sales slide,” Zeng added.

More importantly, China’s musical instrument market is expanding fast amid the domestic consumption upgrade, driving demand for high-quality Western musical instruments, industry insiders said.

In 2017, China’s musical instrument market was estimated to be worth more than 40.6 billion yuan, compared with sales of 24.5 billion yuan in 2012, according to a report by the Xinhua News Agency.

“If the tariffs take effect, hefty prices would push more Chinese consumers to domestic and other foreign brands,” Rong Xiaoxian, the exhibition director of Shanghai Intex Exhibition Co, which hosts the China (Shanghai) International Musical Instrument Exhibition, told the Global Times on Wednesday.

This means that the US producers would lose the chance to capitalize on China’s burgeoning market, Chen added.

Meanwhile, the tariffs, while hurting US players, would also provide a chance for domestic musical instrument companies to upgrade their manufacturing technology, diversify their product lines and capture high-end market share, Zeng added.

However, compared with US players, the tariffs will not have too much impact on Chinese sellers’ businesses, taking into account the small market share, with some companies already talking about shifting to European products.

“The impact of the [tariffs] is limited because US is not a big supplier of musical instruments. For example, if consumers walked in and looked for a piano, we would recommend Japanese brands like Yamaha and Chinese ones such as Pearl River which provide euphonic melodies and are not very expensive,” a manager of a Beijing-based musical instrument retail store surnamed Chen told the Global Times on Wednesday.

Last year, China imported 331 pianos from the US, compared with 69,000 from Japan, according to data provided by Zeng.

Even in terms of China’s total musical imports in 2017, the US lagged far behind its rivals in Japan, South Korea and Europe, with only about 5 percent of the total import volume, meaning it ranked No.7, Zeng added.

Also, to hedge against potential risks, Wang Yiran, general manager of Shanghai-based musical instrument import agency Algam China, told the Global Times on Tuesday that the company “is also thinking about plans to find replacements for US products in Europe.”