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Yahoo
a few seconds ago
- Yahoo
Inside a US guitar string maker's strategy to navigate the trade war
By Timothy Aeppel FARMINGDALE, NY (Reuters) -Once a week, executives of D'Addario & Company, a maker of strings and drumsticks for the world's top musicians, gather at the company's headquarters about 40 miles east of New York to strategize how they should respond to the President Donald Trump's trade war between the U.S. and the rest of the world. 'We literally call it our trade war task force,' said CEO John D'Addario III. Back in April, Trump was generating so much turmoil on trade that they met daily. But as they've gotten the hang of responding to constantly changing rules, they've scaled back to meeting weekly to map out plans to protect their business and take advantage of opportunities that may arise. Strategy sessions like this are happening across corporate America as Trump's tariffs create kinks and extra costs in global supply chains built up over decades. For D'Addario, a family-owned business that has been around for over half a century, this has meant looking at every aspect of their business to assess exposure, resulting in strategies that include setting up their own free trade zone and rerouting shipments to avoid tariffs, Reuters reporting shows. U.S. companies are learning there are no quick fixes to their trade woes. What seems to work one week may be outdated the next as the levies, or threats of levies, shift. In the past few months, the U.S. has slapped a minimum 10% tariff on most imported goods, with higher rates on steel, aluminum, cars, and car parts. The trade war so far has pushed the effective U.S. tariff rate to around 20%, according to the Budget Lab at Yale, a level not seen since the 1930s. D'Addario is one of the world's leading makers of music accessories, with annual sales of $235 million and six U.S. factories. Five of those plants are clustered in this Long Island suburb, including one that churns out 750,000 strings a day for everything from bass guitars and banjos to violas and mandolins. The company has a devoted following among professional musicians as well as amateurs. John Oates--of the former rock duo Hall & Oates--uses their strings, as does jazz guitarist Pat Metheny and country singer Chris Stapleton. Neil Peart, the late Rush drummer, used D'Addario's drumsticks--and the company still sells sticks that were designed specifically for his playing style and bear his signature. A set of those hung on the wall of the conference room where the task force met one recent morning. While the company makes nearly all their products in the U.S., their supply chain and distribution are global. They export nearly 45% of what they make to 120 countries. Their biggest foreign market is Japan. TRADE WAR ROOM D'Addario's global footprint means they keep finding new vulnerabilities. For instance, one item on the agenda of the recent meeting was Japanese oak. D'Addario uses the wood, known as Shira Kashi oak, to craft a line of drumsticks coveted for their durability and feel. Some drummers won't play anything else. But the cost of the material is set to jump on August 1 if Trump makes good on his vow to push through a wide range of new tariffs, including 25% on Japanese goods. 'There isn't really any good alternative—people want their Shira Kashi oak,' Hank Sheller, the company's strategic sourcing manager, told the group of eight other executives gathered around a conference table three days after Trump announced the new levies on Japan. The group concluded that, in this case, a price increase to offset tariffs would be readily accepted by consumers because the wood is so unique. 'That's just something people will pay for,' said D'Addario. Other topics under discussion were more difficult to resolve, like what Trump's promise of a 50% copper tariff, announced the day after the Japan duties, would do to their costs. D'Addario doesn't buy raw copper but consumes large amounts of copper rod that it draws out into ultra-fine thread used to wind many types of musical strings. 'The problem is we don't really know the origin of the copper we're getting—whether it's from a domestic source or imported,' said D'Addario. 'But it's more likely there will be a cost increase for us, even if it is a U.S.-based supplier.' And unlike Japanese oak, copper strings are a commodity, so raising consumer prices to cover the tariff cost is unlikely. The task force has found ways to sidestep some tariffs. For example, after the U.S. started raising tariffs sharply on China, they shifted how they ship Chinese-produced goods to customers outside the U.S. It previously imported most of those goods, which account for about 5% of their total sales, to its warehouse on Long Island, where they were stockpiled and then sent on to end customers as they filled orders. The task force realized they could get around U.S. tariffs by having the goods sent directly to foreign customers from the Chinese factories. It helped that the Chinese factories were eager to help. In the past, they resisted directly shipping smaller orders. 'As a result of tariffs, our Chinese suppliers suddenly became much more accommodating,' said D'Addario. 'WE'LL SEE WHAT HAPPENS' The task force has also applied for permission to create a free trade zone in part of their warehouse in Farmingdale, which will allow them to hold imported products and only pay tariffs when they need to be used to supply domestic orders. The company also plans to do some assembly work there. 'We'll be able to bring parts from China and assemble them with domestic parts—and then you could re-export that without paying any tariffs,' said D'Addario. Though that won't be a quick fix. D'Addario estimates it will likely take more than a year to get the necessary approvals and to build that facility, which must be secured with fencing and special monitoring equipment. Another effort is aimed at changing how they sell musical strings in China. Until now, they've produced them in New York and had workers here put them into retail packaging. They're testing sending the strings in bulk to China and having a logistics company there do the final packaging. Since the value of bulk strings is lower than the same number of strings packaged for retail, the tariff bill is cut. Savings like that will be crucial if the Chinese retaliate against U.S. tariffs after August 1, said D'Addario. 'At least we'll have the capability proven,' he added, 'so we're able to respond to whatever happens.' Despite the task force's efforts, the company's tariff bill is still expected to hit $2.2 million by the end of this year, compared to just $700,000 last year. Part of that is new costs to import cane from the company's own plantations in France and Argentina, which it uses to make woodwind reeds. The tariff on cane has risen to 10% and is set to go much higher. 'Trump said he'll put a 30% tariff on Mexico and Europe, so we're expecting anything from our plantation in France to cost even more,' said D'Addario. 'Assuming it goes through. We'll see what happens on August first.' Sign in to access your portfolio
New York Post
2 minutes ago
- New York Post
Pete Buttigieg's DOT spent $80 billion on DEI grants, delayed air-traffic-control upgrades: records, industry insiders
WASHINGTON — Former Transportation Secretary Pete Buttigieg failed to replace outdated air-traffic-control systems while in office — with his agency instead shelling out tens of billions of dollars on a DEI agenda, according to federal spending records and airline-industry insiders. In one meeting, Buttigieg — who is said to be eyeing a 2028 presidential run — told industry executives that air-traffic-control upgrades would just allow them to fly more planes, 'and so why would that be in his interest?' sources said. 11 Buttigieg told industry executives that air-traffic-control upgrades would just allow them to fly more planes. Getty Images What his department was really interested in was handing out hundreds of diversity, equity and inclusion grants totaling more than $80 billion over four years — at least half of the DOT's entire budget for a typical fiscal year, records show. 'He was definitely pushing an agenda,' an air-industry official said, noting the transportation secretary had 'little to no interest' and took 'definitely zero action' toward air traffic control modernization. Buttigieg spent his time in Biden's cabinet blaming the airlines for their delays and 'vilifying' the industry as a whole while denying his department's DEI agenda led to any air-traffic-control staffing shortages or was maintaining an ailing safety system that hasn't been updated since the Carter administration, sources told The Post. 11 'He was definitely pushing an agenda,' an air-industry official said. AFP via Getty Images The flying public paid the price, insiders said. 'At first, [the Department of Transportation] and he were reluctant to say there was an air-traffic-controller shortage or that the shortage had anything to do with flight delays or flight cancellations,' the air-industry official said. Chris Meagher, a spokesman for Buttigieg, rejected both claims and pointed to increased air-traffic-controller hiring under the former transportation big, as well as software changes to improve efficiency at airport runways, new flight routes projected to cut up to 100 hours off travel time annually and the development of communications technology to decrease flight delays. 11 Buttigieg spent his time in Biden's cabinet blaming the airlines for their delays and 'vilifying' the industry as a whole. Getty Images Former President Joe Biden's infrastructure law also provided $5 billion to improve air-traffic facilities' towers and power systems, he noted. 'Suggesting that Secretary Buttigieg chose not to pursue air traffic control modernization is absurd,' said Meagher, adding that Biden's budget request for fiscal year 2025 included another $8 billion in funding that congressional Republicans blocked. 'Secretary Buttigieg's focus was always on safety — not just in aviation, but also on roads and bridges, where 40,000 Americans die on our country's roads each year. Fixing issues with air traffic control was a priority.' 11 Chris Meagher, a spokesman for Buttigieg, rejected both claims and pointed to increased air-traffic-controller hiring under the former transportation big. Getty Images The DOT's Bureau of Transportation Statistics shows that most flight cancellations (54.3%) were caused by weather during Buttigieg's term, whereas a little more than one-third (34.7%) were attributable to air carriers. Just 10.6% were due to failures in the National Aviation System. Nearly 80% of flights were on time between January 2021 and 2025. Almost 7% of delays were due to air carriers, another 7% for late-arriving aircraft, and 5% was attributable to the aviation system. Fewer than 1% were attributable to weather. Airline-industry officials acknowledged that carrier delays persisted coming out of the COVID-19 pandemic but argued much of the infrastructure law's funding 'went to maintenance' of facilities and equipment, which is roughly $3.5 billion annually, not 'modernization.' 11 Former President Joe Biden's infrastructure law also provided $5 billion to improve air-traffic facilities' towers and power systems. AFP via Getty Images They argued that while hiring improved in recent years, there was still a high dropout rate and surging retirements from veteran air-traffic controllers. 'If you start with a thunderstorm early in the day, and it ripples throughout the day, which is the way it usually works … by the time you get to the eighth flight … it's just tagged as a late-arriving aircraft,' an industry official said. 'No matter what the original cause of the delay was, that always gets tagged to us as our fault. So it's a complicated story.' Despite the requested changes to the air-traffic-control systems early in his term, Buttigieg seemed more interested in being 'good on TV' than fixing the archaic systems that were flying up to 182 million passengers per year, officials said. 11 Nearly 80% of flights were on time between January 2021 and 2025. The Washington Post via Getty Images The Federal Aviation Administration has been chronically understaffed for years, with the agency employing only around 80% of the target for certified professional controllers at least since fiscal year 2017, which airline officials argued was the main factor forcing delays and cancellations. In January 2023, the agency ordered the first nationwide grounding of flights since the Sept. 11, 2001, terror attacks that left thousands of passengers stranded. The 2023 grounding was due to an FAA system outage. In an urgent letter to Buttigieg's DOT in April 2024, air-industry trade association officials warned that at the current rate of hiring, it could take as many as 90 years for the FAA to reach its targeted staffing levels in some of the critical New York air-traffic-control centers. At the same time, the focus of the department under Buttigieg also shifted, with roughly 400 DEI-related grants approved, according to a review of federal spending between 2021 and 2024. 11 They argued that while hiring improved in recent years, there was still a high dropout rate and surging retirements from veteran air-traffic controllers. Bloomberg via Getty Images Just 60 grants for diversity, equity or inclusion initiatives were approved during the previous administration, totaling no more than a few billion dollars. Programs such as 'Justice40' ended up shelling out 55% of around $150 billion in infrastructure investments to 'disadvantaged communities,' pursuant to an executive order Biden signed to 'advance equitable outcomes.' Biden's $1.2 trillion infrastructure law in 2021 provided much of the funding, but some Democrats were critical of the outcomes — including a $5 billion equity effort to build 500,000 electric vehicle charging stations that resulted in just seven being built by June 2024. 'Internal White House polling showed that airline issues and airline consumer issues were' key polling successes, an industry official said. 'At this point that White House didn't have a lot to sink their teeth into from a PR standpoint.' 11 In January 2023, the agency ordered the first nationwide grounding of flights since the Sept. 11, 2001, terror attacks that left thousands of passengers stranded. Getty Images Meagher said the department's DEI grants didn't delay 'the work of the FAA' and were 'a separate, siloed transportation mode.' 'You can walk and chew gum at the same time,' he responded. 'FAA operates completely separately than other modal administrations. So what happens at FHWA doesn't have a meaningful effect on FAA or NHTSA because they operate independently. It's separate staff, separate budgets, separate programs.' Buttigieg often lashed out at the airlines, blaming the industry — not the FAA which controls airspace nationwide — for canceling flights and bilking passengers for 'junk fees.' Just 12 days before the election, Buttigieg's DOT moved to implement a federal rule giving passengers compensation for every delay and cancellation of up to $1,000, even if it was higher than the original fare, prompting a blistering statement from a top airline trade association calling it a political stunt. 11 Meagher said the department's DEI grants didn't delay 'the work of the FAA' and were 'a separate, siloed transportation mode.' AP 'Secretary Buttigieg is proud of the work he did to improve the rights and protections of consumers – like making refunds automatic when airlines cancel a flight, proposing a rule to ensure parents can sit with their children for no charge when they fly, and ensuring individuals that fly with wheelchairs are compensated if airlines damage them,' Meagher said. 'USDOT also ensured nearly $4 billion in refunds to consumers as a result of investigations into consumer complaints.' David Grizzle, who served under former President Barack Obama as the FAA's chief counsel, acting deputy administrator and chief operating officer of its Air Traffic Organization, pointed out that paying 'less attention to aviation than highways or bridges' wasn't abnormal for a transportation secretary. 11 Just 12 days before the election, Buttigieg's DOT moved to implement a federal rule giving passengers compensation for every delay and cancellation of up to $1,000. Getty Images It's 'a very big job, and it covers seven different modes,' Grizzle noted, while acknowledging, 'There certainly were no remarkable achievements in aviation during his [Buttigieg's] term. 'The shortfall in budget is something that really began in the [2010s] and has really gotten worse over time,' he added. As of last month, an Emerson College poll of registered voters found the former transportation secretary leading the 2028 Democratic presidential primary field with 16% support, followed by ex-Vice President Kamala Harris at 13%. 11 Buttigieg often lashed out at the airlines, blaming the industry — not the FAA which controls airspace nationwide — for canceling flights. An Echelon Insights in July showed him in second place for the potential primary, trailing former Harris by 15 percentage points, 26% to 11%, in support from Democrat and Democrat-leaning voters. With the passage of President Trump's Big Beautiful Bill earlier this month, Republicans have now approved $12.5 billion in additional spending for Transportation Secretary Sean Duffy to revamp the old Federal Aviation Administration systems. 'It's not so much that prior administrations have been especially indifferent; he's just been exceedingly attentive,' Grizzle said of Duffy. 'I've been on blue ribbon panels in Trump and Biden. … He will stand out for decades as one of the most engaged secretaries we've had.'
Boston Globe
2 minutes ago
- Boston Globe
Boston voters resoundingly support limits on police cooperation with Trump deportation efforts, Suffolk/Globe poll shows
That popularity stands in stark contrast to how the White House views the situation. The Trump administration's 'border czar' Related : Advertisement Another 17 percent of poll respondents said they have a 'somewhat favorable' view of the policy. Roughly 6 percent had a 'somewhat unfavorable' opinion of it, while 11 percent have a 'strongly unfavorable' opinion of it, the poll found. The city first Earlier this year, Related : Advertisement The high support for the Boston Trust Act from the Suffolk/Globe poll comes in the wake of A majority of Americans disapprove of Trump's handling of immigration, though the results split sharply along partisan lines, with Republicans more supportive of the president's approach. While 62 percent of poll respondents overall said they disapprove of Trump's immigration actions, 59 percent of Republicans strongly approve of his immigration policies. Forty-five percent of independents and 81 percent of Democrats strongly disapprove of Trump's immigration approach, according to the Gallup poll. The found that the percentage of Americans who want to see less immigration has dropped to 30 percent from 55 percent a year earlier. It also found that more Americans than ever, 79 percent, say immigration is good for the country. The Gallup poll also found that support for mass deportation efforts, expanding the US-Mexico border wall, and increasing the number of Border Patrol agents has dropped. Since taking office, Trump has overseen efforts to Related : It's had a Advertisement The escalation in ICE raids and detentions, along with the Trump administration's moves to Several high-profile arrests in Massachusetts have also drawn nationwide attention, including the The Suffolk/Globe poll was conducted over four days, from July 13 to July 16, and its margin of error was plus or minus 4.4 percentage points. Live callers reached respondents via mobile and landline phones. Niki Griswold can be reached at
