Incoming U.S. Gov’t 25% Tariff Proposal on ALL Canadian Products

[wilsonharborsales]

The incoming U.S. administration has announced today that they will sign an executive order on January 20th that will add a 25% import fee on all goods entering the U.S. from Canada. Under the proposed law, there will be no exemptions for consumer goods.

[prescilaschina]

First a thought then a question.

California is drying up. The US needs water flowing from Canada. I have yet to hear a Canadian politician use water as a bargaining tool against the threat of tariffs.

For those of us who are able to swallow 25% will it matter? or will US buyers simply exclude Canadian sellers from their search metrics thinking it’s not worth the effort?

[wilsonharborsales]

Danielle Smith just returned from Mar-A-Lago and stated that 25% U.S. tariffs across the board are coming on January 20th.  They may use emergency powers to push this through as an executive order which would supercede de minimus laws.

[dinomitesales]

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@wilsonharborsales wrote:
The incoming U.S. administration has announced today that they will sign an executive order on January 20th that will add a 25% import fee on all goods entering the U.S. from Canada. Under the proposed law, there will be no exemptions for consumer goods.

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I dont' see how they would be able to fully implement this as soon as the day of presidential inauguration.

The logistics alone don't even make sense. Wouldn't they need like a ton of extra border personnel to inspect/assess every package coming from Canada? And then how do they collect this 25% from the recipient? Is USPS even set up to collect and remit these fees?

[flipistics]

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@dinomitesales wrote:

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I dont' see how they would be able to fully implement this as soon as the day of presidential inauguration.

The logistics alone don't even make sense. Wouldn't they need like a ton of extra border personnel to inspect/assess every package coming from Canada? And then how do they collect this 25% from the recipient? Is USPS even set up to collect and remit these fees?

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I doubt pesky little details like that will matter.  I'm not completely convinced the emergency measures would supercede the de minimis, but I'll be turning off orders to the States on the 17th until we know exactly how things are going to shake out.

In the event the tariffs do fully apply, I don't think I would want to sell anything to the States unless or until eBay implements tariff collection at the time of sale.  I don't think I'd want to take the risk of Americans used to the de minimis suddenly being hit with 25% when they pick up their parcels. I'd imagine the feedback wouldn't be pretty.

[wilsonharborsales]

I just hope the de minimus stays in place so that at least small business has a fighting chance.  It is very hard to prepare for, because no one is really sure what is going on.  

[fergua3]

i doubt the tarriff will apply to small items sent by mail from Canada, at least not right away.  There would be no administration in place to collect them.  

Trump always speaks in grand, sweeping, vague ways.  Across the board means lumber, oil, autos, grain......it doessn't mean a set of hockey cards or a toy truck for little Johnny.

Eventually de minimus may go away and when it does then the Americans may start getting charged but it would take months to set that up and cost a fortune.....i'm sure Trump will say we are going to pay for it but the reality is he is going to have to pay for it as well as his new Department of Tariff Collections. ..and the whole thing will probably fizzle once Americans see auto prices soar, or can't get the stuff they need from Canada.  Remember, the Americans don't buy stuff from Canada to be swell, they buy stuff from Canada because they need the stuff Canada has.  Tariffs just make it more expensive for them.  

I still think Trump believes the seller pays the tariffs.  I don't think he understands that the buyers pay the tariffs.  Maybe he thinks we'll discount the prices of our goods by 25% to offset the tariffs?  But there would be no point in doing that as we'd be taking a loss on everything we sell.

[mrdutch1001]

The tarrifs are aimed at BIG businesses>importers of mass produced products>big companies that import/export not the average eBay seller who is selling hobby items, collectibles and so forth, so unless you are a business that imports/exports products for distribution down the chain I don't see this as a huge threat to the average eBay seller>and until that is proven otherwise I see no need for all this panic-like discussion...

[recped]

Yes lots of unnecessary anguish here.

The EU and the UK eliminated the de minimus exemption for VAT a couple of years ago while it bothered a few of the usual "can you mark the value as $10" crowd it didn't seem to have any other effect.

When eBay was required to collect State Sales Tax on any sales that were shipped from outside the US what effect did that have? Did US buyers stop buying from Canada?

[ilikehockeyjerseys]

If their decision to cut or remove fees is influenced by a 25 percent US tariff, I think that a better move would be to keep fees as they are for US orders, but offer US buyers a very obvious deduction at checkout to offset the tariff.

Everything works out the same for the seller. If eBay doesn't charge fees, but I know the buyer is getting charged an additional 25 percent, I may have to drop my prices by 25 percent to compensate. If eBay charges fees but I know eBay will cover that 25 percent for the buyer, I don't have to drop my prices by 25 percent to compensate. 

Either way, the end result is exactly the same for the buyer, seller, and eBay - except eBay can heavily market to US buyers that they get a discount on Canadian orders. Not to mention, it eliminates lost sales to sticker shock at checkout such as a $100 item added to cart that ends up being $150+ at checkout. 

Lastly, it makes it easier to manage pricing because even if they eliminate fees for domestic orders but keep them for US orders (while giving US buyers a phantom 25 percent discount paid for partially by those fees), sellers don't have to find a way to balance their prices between two completely different markets. 

People will say a discount for the buyer is bad, why doesn't the seller get the money! The seller does get the money, because if the buyer is getting a 25 percent coupon or rebate paid for by eBay (like all eBay coupons), that means sellers don't have to lower their prices by 25 percent to compensate for the tariffs. 

[recped]

You actually think there would be a reason for eBay to cover 25% tarrifs for US Buyers?

Why would you as a seller think you need to cover Trump tarrifs? Did you cover the Sales Tax US buyers paid starting in 2018?

If you buy something from the US that is subject to retaliatory tarrifs imposed by Canada do you think US sellers should/would cover that?

What are you smoking!

[darak10]

i asked a friend of my wife who is a Bay St economist for one of the big six for their opinion on what the tariffs will do.  

This persons answer was frighteningly succinct.

"It will destroy the Canadian economy."

[ilikehockeyjerseys]

It was in response to a post suggesting that eBay might remove fees entirely in Canada, which they have done in other territories. 

My point was that removing fees or keeping fees but using them to fund a perpetual coupon code that offsets the tariff would be the same thing for sellers, but might increase sales to the USA because they will feel like they are getting a better deal and it would eliminate sticker shock (think of the psychology with "free" shipping). Either way, the money goes into the pocket of the seller. The only thing that changes is whose hands the money travels through to get there.

An example:

I have an item worth $500, with the tariff I have to lower the price to $400, because it won't sell for $500+25 percent. Therefore, I lose $100 of profit that I would have made before the tariffs. If eBay eliminates fees, it helps offset that $100 loss. In this scenario with no fees but a lowered price because of tariffs, I walk away with $400.

Or, I have an item worth $500, if eBay continues to charge fees but uses those on marketing efforts meant to subsidize the tariff, I can keep it priced at $500 because the buyer will have a coupon (paid for by eBay) for 25 percent off (that offsets the tariff). I will pay roughly $100 or less in fees, those fees would in theory subsidize the coupon. I would not have to lower my price like I would in example 1. Therefore, I walk away with roughly the same amount, $400. Except, it would eliminate the sticker shock at checkout.

Both scenarios are the same is the point. It's the same concept that is discussed to death in threads about "free shipping" not being free, but sellers do it as a marketing effort because it eliminates sticker shock. The end result is the same in terms of how much profit you make as a seller.

What I am suggesting is that if eBay gets to the point that they are considering eliminating fees on Canadian orders to the USA because of the tariff, that maintaining fees but using them to subsidize coupons and marketing efforts aimed at attracting US buyers might bring more value to Canadian sellers than just eliminating fees. 

[fergua3]

"It will destroy the Canadian economy"

Eventually it may well.  But not for a long while.. And Canada may well be able to adapt to a large extent by tapping other markets for our goods and the US consumer will pay more or do without altogether, especiallly if we refuse to sell them oil and cut off the electricity we supply.  Causing Trump to back down. 

Or the tariffs may fizzle out after a few weeks like they did last time and that's that.  All is possible.

If you really want dark scenarios, how about this.  Trump decides he wants Canada to become part of the US and puts crippling sanctions on us until we agree.  That would make Canada a third world economy in about a year.  So either we agree to join the US, under no doubt very unfavorable terms, or we fight.

We declare what the US is doing is an act of war, invoke article 5 of the NATO accord and all NATO allies come to our defense.  Afterall, we helped Europe out in two world wars, it's time for them to reciprocate.  So that's how bad this situation can get. 

But it probably won't come close to that.  So it's better to take one day at a time and not panic.   Be properly concerned and take each event as it comes.   Trump is often all bluster.  

[reallynicestamps]

The tariffs, should they be enacted, will likely fizzle or even flame out once it's determined how much damage they're doing to the US economy.

President Musk will not allow them since most of his parts are made offshore.

[reallynicestamps]

I just hope the de minimus stays in place so that at least small business has a fighting chance. 

Chinese sellers already made the change some seven or eight years ago

For a while before that, Chinese sellers were renting US warehouses and hiring US personnel, to ship purchases from the USA.

When the first round of tariffs came in they closed those warehouses, fired the workers, and returned to shipping from China. The Universal Postal Union agreement on postal rates came into this too.

The $800 de minimus came into this.

Most of those Chinese competitors are shipping from China, under the de minimus, with still low China Post rates.  They will remain competitors for those sellers of mass market goods made there.

When eBay was required to collect State Sales Tax on any sales that were shipped from outside the US what effect did that have? Did US buyers stop buying from Canada?

I saw a drop of about 5% in my sales to the USA. Which may or may not have been related. My products are OOAK.

[mrdutch1001]

""It will destroy the Canadian economy."">>>

That's because the tariffs are aimed a BIG business/Industries just like back in T***P's previous admin, with the tariffs on steel, aluminum,lumber...

[recped]

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@reallynicestamps wrote:

I just hope the de minimus stays in place so that at least small business has a fighting chance. 

Chinese sellers already made the change some seven or eight years ago

For a while before that, Chinese sellers were renting US warehouses and hiring US personnel, to ship purchases from the USA.

When the first round of tariffs came in they closed those warehouses, fired the workers, and returned to shipping from China. The Universal Postal Union agreement on postal rates came into this too.

The $800 de minimus came into this.

Most of those Chinese competitors are shipping from China, under the de minimus, with still low China Post rates.  They will remain competitors for those sellers of mass market goods made there.

When eBay was required to collect State Sales Tax on any sales that were shipped from outside the US what effect did that have? Did US buyers stop buying from Canada?

I saw a drop of about 5% in my sales to the USA. Which may or may not have been related. My products are OOAK.

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This isn't really how it works anymore.

Temu (and probably Shein but I don't deal with them) pick & pack orders in China, these are then shipped in bulk via charter cargo flight direct to Canada or the US where the individual packages are then delivered mostly using non-postal carriers for the last mile deliveries. Temu does use Canada Post or USPS for rural/remote deliveries but most places are now serviced by companies like UniUni.

Temu has also been opening (or contracting) warehouses in Canada (and the US) where they can offer 2 - 3 day delivery. Presently they are only using local warehouses for their most popular items but the share that is locally warehoused is getting bigger and bigger (there were none in Canada up until Spring/Summer 2024).

Regardless of where the orders are shipped from Temu collects Canadian GST/HST/PST, I do not know for sure if they are collecting US Sales tax.

[reallynicestamps]

If they are shipping from Canadan warehouses, then TEMU /Shein would be required to collect and remit Canadian sales taxes on any sale.

And if they were shipping from China, the customer would be paying the Canadian sales taxes (on products over $20) at their doorstep.

[marnotom!]

FWIW, my spouse’s TEMU orders have all arrived without customs documentation and have had taxes paid at Checkout.

[recped]

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@reallynicestamps wrote:

If they are shipping from Canadan warehouses, then TEMU /Shein would be required to collect and remit Canadian sales taxes on any sale.

And if they were shipping from China, the customer would be paying the Canadian sales taxes (on products over $20) at their doorstep.

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That is not how it works, Temu collects GST/HST/PST on all orders sold in Canada, it doesn't matter where they are shipped from. Temu customers in Canada will NEVER "pay at the doorstep".