(The Center Square) – The owner of a storied Nashville speaker company says he'll pay lower taxes by moving overseas, rather than trying to build in the U.S.
It's the opposite of what President Donald Trump wanted when he put in place the highest import taxes in nearly a century. Trump has encouraged businesses to avoid tariffs by making products in the U.S. He wants to see industries that have shifted production abroad come back.
Michael Jackson's team used Auratone's signature product – the legendary 5C Super Sound Cube – to get the mix just right on the 1982 album "Thriller," the best-selling album of all time. Other artists use those speakers too, even Taylor Swift. Notably, Tom Elimhirst, who has won 16 Grammy Awards, uses the 5C at Electric Lady Studios in New York.Â
The company isn't bringing production to Tennessee as part of a great re-shoring movement. Trump's tariffs are pushing the small, family-owned business to move production overseas, where more of its sales won't face tariffs, the company says.
Auratone's 5C Super Sound Cube lists for about $750, but Trump's often-changing worldwide tariffs have made it difficult for the 36-year-old business owner to plan what will happen next. But one thing is certain, he's not staying.Â
Alex Jacobsen, the company's president and owner, is moving production overseas starting in 2026, he says. His grandfather, Jack Wilson, started the company in Los Angeles in 1958 using money from the GI Bill after serving in the Pacific Theater during World War II.Â
"Unfortunately due to tariffs, we will begin manufacturing some loudspeakers abroad for the first time in the company's 66 year history," Jacobson told The Center Square.
More than 60% of Jacobsen's clients are international. Moving abroad would reduce the company's tariff exposure.
"That's how we're going to get around it,"Â Jacobsen told The Center Square.
Jacobsen had already dealt with tariffs in Trump's first term. So he was watching as Trump rolled out tariffs around the globe on April 2. Parts needed for Auratone's speakers come from Europe, Taiwan, China and other countries. Most of those parts aren't made in the U.S.
Jacobsen ordered pallets of parts from overseas before the reciprocal tariffs went into effect, but not everything cleared Customs before the import duties hit. At the time, the government had exemptions for sea freight, but not air freight.Â
"We got hit with a $4,000 bill because of that,"Â Jacobsen told The Center Square.
Auratone generates approximately $400,000 in annual sales. Jacobsen has two part-time employees in Nashville.
In the weeks after Trump's tariff rollout, Jacobsen didn't know what to do next.
"It was so hard to plan, or really be able to have any kind of clarity on what to do,"Â Jacobsen said.
Two days after Trump announced the reciporcal tariffs on nearly every U.S. trading partner around the globe, the president paused enforcement for 90 days as his trade team looked to reach framework trade deals with top trading partners.
Tariffs changed by the day. Sometimes faster. For small businesses owners, uncertainty prevailed. Between the start of Trump's second term and mid-October, Trump had increased, decreased, paused or changed his tariffs almost 40 times.
That was just for the tariffs Trump implemented under the 1977 International Emergency Economic Powers Act. That law, which doesn't mention the word "tariff," is at the center the legal challenge over Trump's presidential power. A group of small businesses, with help from the Liberty Justice Center, sued the administration in mid-April, weeks after Trump's proclaimed "Liberation Day" for U.S. trade.
A dozen Democrat-led states also sued. Two courts agreed with the plaintiffs, ruling that the IEEPA didn't authorize the worldwide tariffs. A federal appeals court also rejected Trump's argument that the 1977 law gave the president sweeping authority to act in times of emergency.Â
When the Supreme Court took up the case in September, Jacobsen signed on to a friend-of-the-court brief filed by We Pay the Tariffs, which represents small businesses.Â
"As a result of the ever-changing IEEPA Tariff landscape, negotiated prices, production plans, and careful fiscal planning have been entirely eviscerated, causing expected profits to vanish, inventories to run low, and small business paralysis," the group wrote in a brief to the Supreme Court.Â
Jacobsen said Trump shouldn't have unilateral authority over tariffs.
"It's how they're implemented, without any due process, without any input from Congress or input from the public," he told The Center Square.
While waiting for a decision from the U.S. Supreme Court on the legality of Trump's tariffs, Jacobsen said trying to run the family business is challenging.
"We're in the game, but there aren't any rules," he told The Center Square.
He said he hopes the upcoming Supreme Court ruling will bring stability. That ruling could come sometime before June, although the high court took up the case on an expedited basis, so it could come sooner.
"Hopefully that puts some stability or just some boundaries in place," he said.Â
Commented