CEO spends 1.83 million AMEX points to pay the surprising tariff bill
When the approximately $11,000 tariff bill arrived without warning, Robert Keeley reached out to one of his last financial lifelines and was cashed for 183 million American Express Reward points to pay for it.
“The company has a 35-employee guitar pedal maker in Oklahoma City,” said Keely Electronics, who runs Keely Electronics, a guitar pedal maker with 35 employees.
Keely’s scramble is part of a broad calculation of American small and medium-sized businesses whipped by volatile trade policies. Another blow could land on July 9th, with deadline President Donald Trump imposed on other countries to secure trade deals with the US to avoid higher tariffs.
Stocks are particularly high for manufacturers with fewer than 100 employees. account 93% of approximately 240,000 US industrial companies. Unlike global conglomerates, these companies often lack cash reserves, muscle lobbying, or supply chain flexibility, so they absorb steep tariff hiking and pivot production.
Some people who are under pressure are close groups of guitar pedal makers like Keely, who run a boutique business that builds stomp boxes that shape the sound of music. The niche industry offers a window into the economic sacrifice of tariff whipping for small businesses.
A painful twist
To survive, pedal builders do something unusual in competitive business.
The Alliance was launched by Julie Robbins, 46, chief executive officer of Seismic Devices in Akron, Ohio. To avoid layoffs of 35 workers, Robbins tapped the company’s credit line. However, she fears that the strategy will not be held, and is considering moving some production overseas. It’s a painful twist considering the tariff was meant to bring work home.
Speaking at the NATO summit in The Hague last week, Trump said collection is driving production to manufacturers. “They don’t want to pay customs duties, so the factory is being built,” he said. Also, some large companies have pledged to invest in domestic manufacturing. apple Inc. alone will spend more than $500 billion in the US over the next four years.
However, small manufacturers tend to have the deep pockets and flexibility needed to rebuild their supply chains. Many rely on imported components, like earthquakes. The company sources circuit boards, resistors and transistors from China for pedals used by bands containing black keys and voice-led bands.
read more: Trump says he doesn’t expect to extend the July 9 tariff deadline
In early May, nearly 50 people attended the Pedal Builder Support Group’s second meeting, doubling the turnout on their first phone. The rules were clear. No talk of pricing was considered a conspiracy. One participant joked that the group sounded like miniopecs.
“Opec jokes are fine,” Robbins said.
The guest speaker that day was campaign director Shaun Fette Place. Main Street Alliancea lobbying group for small business owners. He explained how Trump’s first-term trade team included some moderate voices. He said that today’s administration is “more economically more nationalist.”
I lost funds
Soon, the conversation changed personally.
Jon Cusack, 55, runs a Pedal Maker In the Netherlands, Michigan, he has built delays, reverbs and other stomp boxes for his brand and other companies. He said he would spend $200,000 on stock before the tariffs came into effect, draining his savings.
Cusack, whose 30-person company generated $3.9 million in revenue last year, said: “Can we survive three or six months, do you know, my next step is to mortgage the house, and I really don’t want to do that.”
It’s rare for rivals to share a struggle with each other, but the members of the support group said they all deal with the same issue and are part of a close-knit community. zoom Kansas City-based attendee Josh Scott JHS pedal. He employs 42 workers, earning about $10 million last year.
Scott, 43, he also runs a YouTube channel Popular With his guitar player, I used his platform to explain how tariffs work. He recently wrote Subsack Post It reminds consumers that “American businesses pay tariffs.” This is the cost that will ultimately be handed over to the customer.
In mid-May, Robbins traveled to Washington. US Senate Committee on Small Businesses and Entrepreneurship“American manufacturers like mines will not survive the summer without immediate relief from tariffs and continuing the trade war.” She founded Earthquake in 2004 with her husband, musician Jamie Stillman.
she I said Before this year’s tariff, the committee bought a blank printed circuit board for $1.40 each, compared to $20.70 to $31.19 for domestic alternatives.
“It’s not a viable option and will push prices up far beyond what the market can withstand,” she said. “And that’s just one of the components we use.”
read more: Trump’s tariffs aimed at reviving manufacturing are doing the opposite.
At the next Zoom meeting of the Pedal Builders Support Group, Eveanna Manley, president of Manley Laboratories Inc., shared her own cost-saving tactics. The Chino, California company manufactures preamplifiers, equalizers, microphones and other equipment for recording studios.
“We put all our employees at 30 hours a week. That’s a baseline where they can stay and still maintain their healthcare,” Manly, 56.
Kiely shares his own story in the group’s message thread and uses the May and June tariff bills using Amex credit card points to China’s Golden Shine Electronics (Weng Yuan) Co. and explained how to pay a total of $10,987.48 on circuit boards for imported components via DHL.
“I wanted to share the only ‘play’ I had when fighting tariffs,” Keely, 55, wrote the group in mid-June.
read more: Nirvana guitar sound maker targets Trump tariff disruption
My frustration slowed down at next week’s follow-up zoom meeting. For nearly two hours, participants exchanged ideas on how to raise awareness about the impact of tariffs on small US manufacturers.
“They are sure they can start building transistors and resistors, inductors and capacitors,” Cusack said. “I should be able to become an expert on everyone in those fields and make all of my products? They don’t understand what it takes to do all of that.”
Robbins agreed that the perception gap has made it difficult to gain traction with lawmakers and the public.
“I don’t think any of us want to fall without a fight,” she said. “And I think we all see this as a threat to our survival.”