by Bart Crane
| Tuesday, September 25, 2018 |
On July 11, 2018, the office of the U.S. Trade Representative proposed a 10% tariff on $200 billion of imports into the United States. In early August 2018, the Trade Representative began evaluating a 25% proposed tariff on the same $200 billion of imports. The tariff list includes over 6000 harmonized codes, affecting most consumer goods.
The 10% Tariff went into effect Monday, September 24th. The 25% tariff is proposed to go into effect on December 31, 2018. Tariffs are paid as a tax at the time the goods enter through U.S. Customs.
How do tariffs impact the price of coin supplies?
As the tariffs hit commodities used in manufacturing in the U.S., such as plastic, steel and aluminum, the input cost for those items increased. These effects are seen in coin supplies manufactured inside the U.S. with raw material, such as timber for pulping, plastics and films for flips and pages, and steel and aluminum for display boxes. In response, many domestic manufactures with commodity product inputs have taken this opportunity to raise prices. The impact on price from these raw material inputs currently seems to hover around 5-7%, so far.
The second is a direct 10%, and later the proposed 25% increase, on many pre-packaged and consumer finished goods. For example, most coin folders, albums, maps, books, and pre-packaged retail items.
The third, and somewhat counter-intuitive result is that products manufactured outside the United States or China for import to the U.S. may see a relative reduction in cost as manufactures and retailers retool and realign their supply chains. That could take many months, and in some cases years.
What can we expect on pricing for coin supplies?
We now have tariffs in place directly or indirectly affecting roughly 60-70% of the 5200 skus currently sold by Transline. We anticipate the impact to increase dramatically if the 25% tariff is imposed. Most of these cost from direct tariffs will pass through at rates lower than 10 or 25% at the wholesale level. Additionally, we are seeing and anticipate 5-7% increases on domestically manufactured items due to higher raw material costs resulting from the August 24, 2108 tariffs on commodity materials. Around 10% of the products we sell will remain relatively unaffected by the tariffs.