Hi,
Almost 100% of my products are made in China. So this tariff turmoil is really nerve wracking. With the 125% (or maybe higher) tariff, I don’t know whether there would be any profit left. So I wonder if anyone here who order from China make any moves like canceling/postponing/modifying orders?
I normally store some of the inventory with suppliers in China to save money on Amazon storage fee. With high tariff, these Chinese suppliers are losing orders/customers fast. I’m afraid that they might go out of business (and my inventory will be lost). However moving my inventory now is not a good idea either due to the high tariff Sigh… no idea what to do. So I’m curious if anyone here doing anything or have any strategies to deal wit this great uncertainty. Thanks.
Thanks for the link. The article was really informative. Yes other Chinese suppliers told me that lots of their US clients already cancelled the orders. I wonder how those US importers know that actual increase in tariff unless they pay tariff bills by themselves. I wouldn’t know the actual dollar amount until I receive my next bill (which will come in a few weeks) because my ocean freight agents deal with the tariff due to our DDP agreement.
As I have mentioned I had a $25k order come in February that I had ordered in November I think.
I was incensed I would have to pay 10%. But in the end, I would have paid it.
But I could not afford $25k. So.
If it had not been made, I would have cancelled (and hoped things changed)
If it had been made, I would have had my guy hold it. (small penalty for him in this environment to help me)
If it was on the water, I would be faced with a $25k bill, and outrageously expensive bonded custom warehouse fee - “over a 3 day grace period to collect your merch”, so ultimately what forfeiture? I do not know.
You know in advance and this is precisely why DDP agreements aren’t the actual way to source. I think we had this discussion a while ago. In which case, you forgo the deposit and let the supplier offload goods somewhere else (not easy to do but at least they’re not out raw materials) - these all would be exigent circumstances. This will also destroy many supply chains as the increase in prices for higher ticket items is insurmountable without knowing who and how will people pay for it. Literally, any collaterized inventory has been devalued instantly which at scale is insane - think all the securities backed by such inventory
It will be higher - mine is effectively 155.9% - because its base rate + section 301 rate if that applies to your HS code which I guess it would + new increases of 145%. We’re all in the same boat except I was cursed with a business interruption since January 2024; just restarted my business with existing inventory and in the next phase of building where I ramp up sell thru and DT announced the tariffs. The only saving grace is that everyone has to raise their prices depending on what category their products are in and what their margins are.
Yes its called transshipment (think gender but with geography); it comes from China to Vietnam and get repackaged and then shipped from Vietnam - something like that. Never done it, but might be something to look at.
100% correct but it’s not the Chinese you have to worry about. CBP is smarter than you might think with a long reach to investigate. This kind of stuff was done when DT put tariffs on steel products in his first term. Send goods to Vietnam, repackage and ship to US. The problem is every time you put something on a ship, the ship has a manifest which is used for insurance on the ship and it’s cargo.
I know some folks that got caught doing it and paid the price. Not only that but every shipment they did in the future was a full inspection by CBP. That gets real expensive in the best scenario. Your container gets pulled at the port, completely unload and sits in a bonded warehouse waiting for CBP to finish their inspection. Then they reload your container, without a care about the damages to your products. All at your expense.
Thanks for breaking it down to 3 possible options. Option #2 is what I’m worried most. When you ask your supplier to hold it, are you worried that your supplier could be out of business (and your inventory would be gone with his business)? Also, does holding mean that you have to pay the balance? How could you pay balance on things that you might not receive (because tariff is too high to bring it to the US or the inventory might be gone when the supplier is out of business)? Also it will strain the relationship between us (buyers) and suppliers.
Option #3 is also problematic. Frankly I’m in both option #2 and #3 now and still not sure what to do. Things keep changing too fast.
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Yep that would be the worst case scenario. This will destroy relationship with the supplier. So I’m hoping that they would help absorb the tariff sharing the burden; maybe giving some discounts, etc. However with things moving quickly from +20% tariff to now +150% ish, we have to wait for things to settle before start negotiating with the supplier.
Very true. Another good news is that all the newbies who bought (or going to) the idea of Amazon get rich quick business will be completely gone. Less competition for sure.
That thought came to my mind. Maybe the 90 day pause for other countries is the unofficial “backdoor” for people do just that? The question is how complex would it be and who would do it? Who means the ocean forwarders or us (importers) or somebody else?
Thanks for increasing my IQ by one point today Ok it’s illegal. What’s the punishments if caught? I’m sure that businesses would weight pros and cons to consider whether to try it.
It seems like Chinese suppliers are trying to unload items abandoned by American customers to other countries. I’ve heard that many countries in Asia and Europe are worried about being dumped with even more cheap Chinese goods and further destroy their home manufacturing.
Sigh… no idea what to do. So I’m curious if anyone here doing anything or have any strategies to deal wit this great uncertainty. Thanks.
Ok it’s illegal. What’s the punishments if caught? I’m sure that businesses would weight pros and cons to consider whether to try it.