I know many of you read my blog because you enjoy reading and learning about jewelry making and other crafts. But sometimes some of you find it a refuge from what's going on in the world right now. But this post is necessary as some of us are producers, or work for one, and all of us are consumers. Tariffs affect us all.

What are Tariffs ?
Tariffs are protectionist trade policies to deter people from buying imported goods. It is, in other words, an import sales tax. Any tariffs imposed by the US on other countries will be paid by US companies and consumers.
Yesterday's tariff announcement was on Canadian, Mexican and Chinese goods. Both Canada and China also announced retaliatory tariffs. President Donald Trump has indicated 25% tariffs on EU products are also on the horizon. The BRICS+ economic alliance was threatened with 100% tariffs if they choose to abandon the USD as the global reserve currency.

Are Tariffs Now in Effect?
They were announced on March 4. The regulations are still evolving and may change.

Do these tariffs affect Etsy sellers and buyers? No, at least not yet, for most. That is because the de minimis exemption for low value goods still remains for all shipments (from anywhere) going into the US. Many countries, not just the US, have a de minimis threshold because it is simply not worth the administrative burden and cost to collect taxes on such small shipments.
The US$800 de minimis means US buyers will not incur custom duties and taxes so long as the goods they import are under that amount. Most Etsy sellers market goods well under that limit.

President Donald Trump removed the de minimis exemption entirely back in early February. Utter chaos ensued because there was no system or enough customs staff in place to actually process millions of tiny orders coming in. One million packages accumulated in JFK airport alone. So the de minimis removal was swiftly paused.

There is still the intent to remove the US de minimis but that could take months and will require a lot of complex arrangements and considerable investment in staff etc in order to process and collect the extra taxes.
Do Tariffs Work?
The short answer is no. Virtually all economists say tariffs are self-defeating and detrimental to economic growth and welfare.  Businesses need stability in order to thrive and tariffs cause havoc to their purchasing, planning and attempts to keep afloat. The stock markets are now falling and inflation is rising.

After the Wall Street Crash in October of 1929, President Herbert Hoover signed and passed the protectionist Smoot-Hawley Tariff Act in June 1930. It raised US tariffs on over 20,000 imported goods. In addition, the retaliatory tariffs imposed by the US's trading partners thus greatly reduced both American exports and imports by 67%. Ordinary Americans simply could not afford to buy anything in an already difficult situation with skyrocketing unemployment. Historians point out the Smoot- Hawley Act actually worsened the Great Depression. Even more people were laid off and the gloom spread around the world for about a decade until World War II commenced.

When tariffs are applied on materials used to manufacture goods, the cost of the goods then increases which in turn reduces sales. And when companies cannot sell goods, they cut back including on staffing.  Back in 2018, President Donald Trump imposed a tariff on imported steel and aluminum from many countries. Less was imported but those metal prices rose in the US because there was not enough cheaper steel and aluminum in the country to meet industrial need. So while 1,000 jobs were gained in US steel production, an estimated 75,000 other manufacturing jobs were lost.

Global trade is very complex today. It has become transnational - a fluid and interconnected network which transcends international borders. Raw materials may be sourced from one location, sent to another for processing, and the processed materials go to yet another country for assembly, and perhaps another for final sale. This fluidity helps keep prices down. However, when tariffs are applied, the crossing and recrossing of borders will accumulate extra fees at every stage of the manufacturing process. The price of goods will dramatically rise.

Nobody wins in a trade war.

Sources are in the links above.

Before You Go:
jewelry making supplies

Disclosure 

This blog may contain affiliate links. I do receive a small fee for any products purchased through affiliate links. This goes towards the support of this blog and to provide resource information to readers. The opinions expressed are solely my own. They would be the same whether or not I receive any compensation. 
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Original Post by THE BEADING GEM