Tariffs & Your Small Business

Isn’t small business ownership a roller coaster? And these last few weeks we all seem to have jumped on a tariff roller coaster. I must admit that even though I have been shipping internationally and answering customer questions about customs fees for more than a decade, it’s been a steep learning curve over the last few weeks!

I thought I would take a moment today to share with you a bit about what I have learned in the last few weeks.

What is a tariff?

A tariff is a tax paid on imports.

Why do governments implement tariffs?

Tariffs can be implemented for any reason but here are the most common:

• Protect domestic industries from the lower costs of overseas goods

• To generate revenue for the government

• As negotiation too

• For national security

  
  

How does this impact eCommerce businesses?

Unfortunately, that is a pretty difficult question to answer. It could have no impact or it could have a huge impact. Let’s look at a few scenarios:

• “I only manufacture goods in the US and I only ship to customers in the US.” -> The tariffs will have no impact on your business.

  
  

• “I manufacture goods in the US and I ship to customers in other countries including Canada.” ->  You will have no additional direct costs. However, your international customers may pay higher customs fees. Further, some citizens of other countries may boycott your product for being manufactured in the US.

  
  

• “My products are manufactured in China and imported here and I ship to customers in other countries including Canada.” ->  The customs fees you pay for importing from China are going up if the shipment is more than $800. Your international customers likely won’t see increased customs fees since the increases are on products made in the US.

  
  

• “My products are manufactured in an AGOG (African Growth and Opportunity Act) country and I ship internationally.” ->  The tariffs will have no impact on your business.

Do I need to change anything about how I fill out my customs forms?

You shouldn’t need to make any changes to your customs forms, but this is a great time to check and ensure they are being completed correctly. This includes checking that your country of origin, value, and HS code are accurate.

How are the shipping carriers responding to the tariff changes?

DHL, UPS, and FedEx have all released statements notifying their customers that increased tariffs were causing delays in customs processing and increased costs. While the USPS has not put out a statement, they did temporarily stop imports from China. While have noticed a slight increase in lost international packages over the last 4 weeks, which may be related to the tariffs or may just be a fluke.  

I hope this simple overview is helpful. Please let us know if you have more questions about how tariffs impact your business. We would be happy to help and we will continue to monitor the situation and update you as we learn more!