7 ms·
So I manufacture cycling products from Taiwan + China, importing to US... he's paying 152% tariffs, on the cost price of the product. Previously would have been
by Antipodes456 1y ago
So I manufacture cycling products from Taiwan + China, importing to US... he's paying 152% tariffs, on the cost price of the product. Previously would have been like 7% base, with maybe a 20% trade war tarriff added on.
So for back of napkin: $10 widget, selling for eg $40.
NORMALLY
Product: $10,
Shipping, storage etc: $10,
Duties: $0.70,
Marketing $10,
Sale price: $40,
Profit: $10
TRADE WAR
Product: $10,
Shipping, storage etc: $10,
Duties: $15,
Marketing $10,
Sale price: $40,
Profit: -$5
So to make even 15% profit, the price needs to increase from $40 to ~$52
So companies are either winding up and ditching their inventory in China (lose less), or if they can prices are going up 20+%. Inflation here we come
At that price they be losing a significant amount on this.
UPS has already laid off 20,000 people. There is about to be a tsunami of businesses winding up unfortunately (us included).