Why artists are paying the price for trade wars
As global trade tensions rise, the performing arts are discovering just how political the price of performance can be. Robert Baird explains why trade tariffs can hurt the performing arts, and why artists are paying the price
Trade tariffs apply to goods, not services, but their ripple effects can dent consumer confidence, raise prices, squeeze disposable income, and influence spending decisions, including attendance at concerts and festivals.
Canada and the United States have enjoyed decades of tariff-free trade under the Canada–US–Mexico Free Trade Agreement (CUSMA), whereby there is an exemption for cultural industries including books, magazines, film, video, music and broadcasting. CUSMA also prohibits tariffs on digital goods like eBooks and video games. However, the recent imposition by President Trump of a 100 per cent tariff on movies not made in the United States will seriously cripple moviemakers worldwide, and US producers who, for example, have long used Canada and other countries to make their movies, benefiting from lower costs and government support such as grants and tax breaks in those countries.
The politics of any country affect the performing arts, and the economic conditions imposed by tariffs result in higher costs. Tariffs on imported steel and aluminium have driven up the cost of raw materials used in the manufacture of such items as stages, trusses, rigging and speaker cabinets. Tariffs on Chinese imports mean that audio and lighting equipment parts, mixing consoles and LED walls will cost more.
Tariffs on steel and electronics have increased the prices of imported gear and created a rise in production costs for the performing arts industry, which must eventually be offset through higher ticket prices or lower profit margins.
Performing arts touring will be affected as well. Touring involves moving people and gear across borders and then facing rising transportation costs in terms of fuel (trucking costs and airfare) or shipping by sea. Tariffs throw a wrench into logistics as well, and make international touring much more difficult. Many performing groups rely on merchandise sales to fund their tours and merchandise manufactured in countries like China or Mexico (or even Canada) will be subject to tariffs and push merchandise prices beyond reason, resulting in less merchandise income.
Rising travel and merchandise costs are shortening tours, forcing artists to raise their fees or seek additional funding.
Festivals and venues rely on sponsorship to fund their programming, and in a world of tariffs and economic uncertainty, that funding may be reduced or completely dry up. The same economic uncertainty may make attendees think twice about purchasing a ticket or travelling to the event. Recent surveys have shown a sharp decrease in Canadians travelling to the United States, and this has already affected event attendance (and local economies).
Lower attendance inevitably drives up ticket prices, and arts organisations are increasingly focused on trade policy, seeking exemptions to support the industry.
It makes sense that when groceries cost more and it is difficult to meet monthly rent or mortgage costs, the first thing to go will be discretionary spending. Fans will be forced to forgo spending on entertainment, and those who do attend will be more cautious. With less discretionary income, fewer people attend events — and those who do spend less when they’re there.
Coping with tariffs
Build the anticipated impacts of tariffs into your budgets.
Source equipment and services locally, where possible.
Get merchandise produced in the country or region where you are touring.
Route your tours as strategically as possible.
Offer dynamic or tiered ticket pricing strategies to offset price increases.
Bundle your merchandise with ticketing; offer “limited edition” merchandise.
Consider expanded fundraising efforts from your community and fans.
Consider joining any collective action groups for lobbying efforts.
The full consequences of tariffs and trade policies on the performing arts industry are still to be felt. As we have seen, tariffs can be imposed on the whim of a president – or even a single tweet. Pay attention to the changing economic climate and do your best to compensate as much as possible. We in the arts are experts in dealing with adversity and crises in many forms, and we will prevail.
Robert Baird, President of BAM! Baird Artists Management, advises performers, artist managers and performing arts organisations on US and Canadian regulations. Specialising in touring logistics, he assists with visas, taxation and withholding requirements across North America. For more information, visit bairdartists.com
