Surprise Tariffs Are Changing Buyer Behavior

by: COVID-19

It's already bad enough when we all had to start paying state sales tax because of South Dakota vs. Wayfair.  And now this tariff b.s.  

by: Xena

I am absolutely baffled by the whole tariff thing - not the tariff itself, but what some people in the US think it is. The comments on social media by some posters really have me scratching my head,
"About time the rest of the world stopped [taking from us - paraphrased] and started paying their own".
"If I make a $100 purchase and the tariff is 30%, I will only have to pay $70".
"Tariffs will mean that we will have more money coming into to US which will improve our economy"

Australia Post has temporarily stopped most shipping to the US, til the "uncertainty" of it all is sorted out. Not sure how long other countries will have to wait to find out what is happening, when the US themselves don't seem to have a clue.

by: UB

It is a great thing. Buy from American businesses located in the USA!

by: Marty2020

Nobody cared when EU imposed 20% VAT  (+ customs duties over $150 US$ purchases) on purchases from the US (and the rest of the world) to discourage the Europeans to buy from the US. Now, I guess, this is called a level playing field.

by: Flying Childers

Thanks for excellent comments from UB and Marty!  You really nailed it!

On another note- how many of you remember the sweet deal that China had with the USPS known as Epacket?

That program allowed the Chinese to send small packages almost for FREE to anywhere in the US.  So it cost me more to send a piece of jewelry to someone in NY than it cost the Chinese to send a small item ALL THE WAY FROM CHINA to NY.

Here's an explanation from Chat:

ePacket,  was introduced around 2011 as a special agreement between USPS and China Post (later also Hong kong Post and others). It piggy-backed on the Universal Postal Union (UPU) treaty rules, which treated China as a “developing country” and gave it artificially low terminal dues (the reimbursement USPS got for delivering foreign inbound mail).

That combination meant:

A Chinese seller could ship a 4-oz tracked parcel to the U.S. for under $2,

while a U.S. seller had to pay USPS $3–$4 or more to send the same thing within the U.S.

by: Ophelia1

I also agree with UB; buy made in the USA

Here's the problem: I have a fabric I used all the time on various projects, it is made in the USA; however, right now, I have been waiting on an order for over 2 weeks...why? The product is made in the USA, but 2 machines are down waiting on parts that come from Germany and China....because we no longer make a lot of parts in the USA, at least, not for these embroidery machines, and of course, I am sure the price will go up because the manufacturer will now have to deal with the high tariffs on these parts, he will pass down those costs to me, and I will have no choice but to pass it down to the consumer, by increasing the price. Who wins??

by: cvsharkey

The above comments are just the tip of this situation. It will take time, but will snowball once it gets going. And only then will people realize what our Federal government has done to our economy & our country.  

by: NYSteve

gee, who would have thunk that addtl tariffs and the end of de minimis would spike prices??? but, what the hay, if i'm getting 10% off my $1million income taxes, (like most of us- that's you and I- rich guys) whats a few % raise from the few things i buy from overseas?

butt, shouldnt the consumer have the choice of where the manufacturer is located, or the better price or the better made goods...at least in a non-dictator economy?

so, that means those who think they are 'buying American'- you not only may not be buying a better made, cheaper product, BUT don't hold your breath, it will take YEARS for any company to fold up overseas and relocate to the USA- EVEN IF this is not a fleeting event - and they are sure it's worth the move. (at higher rent and labor costs, of course added to that calculus)

by: Timmo

I'm one of those who thinks it's about time other countries pay their share of tariffs. The U.S. has been absorbing those costs for decades while we get charged to export everywhere. It was never fair and we've lost trillions. Are some of the tariffs too high? Yes. Trump's ultimate goal is compromise, which we've already seen happen with many countries. I am also of the mindset that we should buy American goods first and foremost. It is not a right to buy from other countries, it is a privilege; and privileges cost money. (Disclaimer: I am not MAGA or a big Trump fan, but this is a good thing.)

by: etectra

@ Flying Childers

"Thanks for excellent comments from UB and Marty!  You really nailed it!

On another note- how many of you remember the sweet deal that China had with the USPS known as Epacket?

That program allowed the Chinese to send small packages almost for FREE to anywhere in the US.  So it cost me more to send a piece of jewelry to someone in NY than it cost the Chinese to send a small item ALL THE WAY FROM CHINA to NY.

Here's an explanation from Chat:

ePacket,  was introduced around 2011 as a special agreement between USPS and China Post (later also Hong kong Post and others). It piggy-backed on the Universal Postal Union (UPU) treaty rules, which treated China as a “developing country” and gave it artificially low terminal dues (the reimbursement USPS got for delivering foreign inbound mail).

That combination meant:

A Chinese seller could ship a 4-oz tracked parcel to the U.S. for under $2,

while a U.S. seller had to pay USPS $3–$4 or more to send the same thing within the U.S."

This deal was negotiated by eBay in 2010 to create eBay / USPS cobranded shipping labels for eBay's Chinese vendors. A eBay representative attended the ceremony in China marking the agreement.

Prior to 2010 USPS had always made money on international mail, but in 2010 they saw their profits dramatically drop due to eBay's agreement. USPS managed to make money on international mail because eBay's program only ran for half the year. From 2011 onward they lost increasing amounts on international mail, eventually reaching over $400 million in loses a year.

Obama sat by for 8 years and did nothing as USPS lost billions on international mail, which they made up for by raising domestic rates and cutting domestic services as the rates paid were set by international agreement. This destroyed American manufacturing jobs as well as U.S. based eBay resellers.

When you send a package from one country to another country each country's post office gets a cut of the fees paid. A 1969 UPU agreement allowed developing countries to pay less fees to other countries to complete the delivery as way to stimulate trade in these poor countries. China was considered a developing country under this program.

The second major reason is the United States exported more mail to other countries that it took thus the U.S. voted for low prices to be paid to the post office of the country of destination of packages. This meant is the U.S. was flooded with millions of packages it would become a net importer of international mail and would face some serious financial difficulties as other countries that were now flooding the U.S. with packages would never vote to increase the prices paid.

Trump took care of this in his first term by threatening to withdraw from the UPU. When other countries did not listen he began the one year withdrawal process. Other countries back down and let each country's postal system set its own rates.

The CCP also subsidizes postal rates on their end as part of their long term strategy of flooding international markets with low cost goods, even at a loss, in order to destroy the manufacturing base of other countries.

Amazon soon copied eBay's pioneering program to defraud the American public and force them into subsidizing eBay and its Chinese communist partners. eBay management are traitors!

by: etectra

The Founding Fathers specifically had high tariffs on foreign goods in order to protect American industry, especially from powerful British Empire.

From the American Revolution to the WWI the fastest growing economy on earth was the U.S. with high tariffs. Up to 90% of the federal government was from tariffs and excise taxes. There were no income taxes.

World War I saw income taxes and the gradual decline of tariffs. The wealthy could afford to hire lawyers and bribe politicians to write tax code that favored them.

Post World War II saw the further decline of America via globalization.

Bill Clinton alone gave us:

NAFTA.

Most Favored Nation Trading status with China was made permanent instead of the being on a annual review.

Chinese membership in WHO (signed by Bush II).

Removal of tax laws that favored making drugs in Puerto Rico.

Those are among the cornerstones of the destruction of American industry and in exchange Bill & Hillary funneled bribes through the Clinton Foundation.

Traitors both.

by: BurglePork

"From the American Revolution to the WWI the fastest growing economy on earth was the U.S. with high tariffs."

Sure, but we were settling a vast amount of previously un-exploited land and had tons of immigration, among many other factors. We were unlike any other nation on earth, so having the fastest growing economy compared to all others wasn't necessarily astonishing. Moreover, conditions now are different from conditions then, so comparing the US then to the US now is likewise absurd, and expecting the same results from similar policies is unrealistic. The postwar period was a boom time for America, unequaled in our history. And ftr, NAFTA was a Republican creation! Why Clinton signed it I don't know, but it wasn't his baby - he inherited it from his predecessor.


Overall I'm shocked at how ignorant the comments here are. Maybe I shouldn't be, but I expected better of E-commerce Bytes readership. Usually there's at least one well-informed, insightful comment. Not today!

by: Snapped

“ I'm one of those who thinks it's about time other countries pay their share of tariffs. “

This comment is a prime example of the mis informed way most Americans have come to believe tariffs work.  The ‘other country’ doesn’t pay it.  The country’s population assessing the tariff does.  Tariffs don’t bring ‘more funds’ into a country’s economy from a trading party.  They bring more funds into the country’s coffers from that country’s own business and/or individual citizens who are compelled to pay it as an effective tax upon the goods and services obtained from a foreign source.  They are a tool of economic discouragement.

Incidentally, when they were assessed 250 YEARS ago to ‘protect’ a burgeoning American economy’, there was no other Income tax to help pay for all the muskets everybody had a ‘right’ to stockpile in order to provide for a well armed militia.  (Read the amendment if you get a chance.  In fact, make it a point to.). Meanwhile, income tax didn’t come to pass for another 140 years or so.  As others have noted, the world was a way different place back in the days of powdered wigs and quill pens.

At present, at least in most cases, any US tariffs imposed are being paid by the US business that import goods for the insatiable (and over advertised) US consumer.  As was noted, this may also, in most cases, include critical parts and components manufactured outside the US, which only then allow the US mfg to sell it’s ‘made in the USA” widgets.  For now.  How long do you think it will be until those costs are ‘passed through’ to the end consumer?  If you’ve been paying attention to fact, instead of MAGA cult rhetoric, you might notice some have already raised prices, ‘in anticipation’.  For what, it’s still unclear, because the tariffs themselves have been threatened, extended, imposed, redacted, fluidly applied….  Nobody knows WHAT to plan for yet.  

That’s because the tariff rates themselves are not being assessed according to any kind of grand economic ‘plan’.  There are nothing more than a political knee jerk manipulation tool being imposed by an ignorant despot, as some kind of twisted retribution, or an attempt to control foreign activities deemed ‘unfavorable’ to US interests.  In some cases, even the ridiculous notion, unproven by evidence at all, related to ‘national security’’.  Yeah, that sounds good.  Use that.  Because it seems to be working.  Read for yourself - all the ‘it’s about time ‘we’ got even’ type comments.  All the ‘this will make it great’ comments.  

Even though it never has before. But you know how history is thought of now - aka ‘fake news’.

So, isn’t it a ‘good thing’ to buy domestic?  Of course it is.  Assuming ‘it’ is available domestically.  And assuming it’s AFFORDABLE domestically.  But there’s the rub - in this country, we don’t tolerate a ‘substandard’ wage rate.  Or exploitation by the ‘man’.  Or lack of medical benefits, or paid time off, or free coffee in the break room.  Or anything less than a ‘state of the art’ approach to manufacture, overreaching management, and new boardroom decorations annually.  Not that that’s a bad thing.  Not at all.  But it ain’t cheap.  Not at all.

And THAT is why our goods cost more in comparison.  You think tariffs will make that cheaper?  Crack a book, yo.  Or perhaps just ‘google it’ on that device chock full of all those cheap foreign components the entire economy we enjoy today was built upon.  Imagine what your cell phone would have cost if they even COULD make it down the street.

There are also raw materials that can not be obtained locally.  Because they don’t EXIST locally.  Look up what it takes to make that aluminum foil your US made hamburger meat gets wrapped in.  Or your aluminum engine block is made from on your Detroit ASSEMBLED Ford Pickup.  Now, find a bauxite mine in the US.  Good luck.  And if you know what extrapolate means, start now.  That’s just one example.

We don’t live on a ‘self sustaining’ island folks.  It’s an interwoven global economy.  Billionaires can play with it all they want, they won’t suffer from potential extinction if it all unravels.  And they certainly don’t care if you do.  

And we don’t live in any kind of environment that can just pick up and retool without substantial investment and time.  So who pays for THAT?  The tariffs?  The one’s being imposed with such fervor that is intended to DISCOURAGE obtaining stuff elsewhere?  

It’s almost as if nobody really serious, or even marginally qualified, has really thought this all through.  Imagine that.

This is a complex issue though, no doubt.  It can’t be adjudicated in a few blog comments.  But one thing will always remain true if one wishes to believe that tariffs will eventually replace taxes.  That is that tariffs themselves ARE taxes.  And if we all buy only domestic, even if that’s might eventually become possible, then what happens to all that tariff revenue?

It disappears.  And now, nobody else can afford to buy YOUR stuff anymore. Even without that special government tax nobody wants to accept as such piled on top.  

by: kipar13

It's bad enough having to pay more for purchasing items not available in the US, but it's worse because some sellers are just not shipping to the US anymore. I tried to buy a second handmade purse from a Canadian seller on eBay because I love the one I bought a couple of years ago so much, and she is no longer shipping to America. I'd be willing to pay more to get some things, but that isn't even an option sometimes

by: Faceless Reseller

I’ve never bought meat wrapped in aluminum foil !!!

by: terry55

Just like the USPS, raise prices 3-4 times a year thinking it will been in more revenue but actually just losing my business

by: Snapped

“ I’ve never bought meat wrapped in aluminum foil !!!”

Of course not.  Is that all you took away from that?  Perhaps you don’t use it to wrap left overs, or when freezing after rewrapping it bought in bulk either.  But somebody does.  Anyway, that’s not the point.  And aluminum is only one example, but here are some other facts that define it as a concern relating to tarrifs.

The US only produces 2% of the worlds Aluminium with only 5 smelters in operation. It therefore has to import and does so from Canada, China, Mexico and UAE (in order of volumes).

Three smelters shut down during Trumps first term! That lost the U.S. 3 million metric tons (mt) per annum capacity leaving just 795000 mt in place today. Hence the almost total dependency

The DOE under Biden awarded a $500m grant on renewable technologies as part of a $6bn fund to shift the U.S. towards renewables. That made the build of new smelters with more efficient energy a likelihood. TRUMP HAS THREATENED TO END THISE GRANTS which directly threaten the investment in new smelters to give the U.S. less dependency on imports and the fluctuations in costs. Right now the U.S. will either have to reduce the use of Aluminium (which will drive up costs) or the importers will pay the tariffs to the U.S. government and the users of the aluminium pass the costs through the supply chain (increasing costs).

You do not have to be an economist to see tariffs are an home goal and when that affects production many supply chains there is likely to be large spikes in costs.  As of today the U.S. has no capacity to increase its own production.  

Bon appetite'.