How Does This Impact Sellers?
Parcel carriers are the ones who will be charged with collecting the new duties, giving them a bunch of additional paperwork to figure out. Those extra costs will likely be passed on in the form of higher prices for deliveries, and the sheer legwork required will probably also cause shipping delays.
In other words, sellers will be faced with higher prices and slowing shipping times. They’ll need to figure out if they’re going to eat the costs themselves, pass the higher costs on to their customers, or some combination of the two responses.
The right choice depends in part on the market cost for your industry, and how your rivals are handling it. But it’ll also depend on your business fundamentals: Can you afford the changes? Many businesses won’t be able to handle the higher costs and can’t shift production to the US (or another country) quickly enough. Those businesses will have to shutter.
How High Will Costs Get?
Currently, the effective tariffs that US sellers sourcing products from China through commercial carriers will have to pay: 145% of the value of the product.
Since the US Postal Service is a government agency, it can charge slightly less: Postal Service tariffs on low-value packages will be either 120% or a flat $100 per shipment. It’ll get more pricy, though: On June 1, that flat rate will increase to $200.
A package that would have cost $12 earlier this year (assuming a 20% tariff on a $10 item) will now cost $22 from the Postal Service or $24.50 from commercial carriers like UPS or FedEx.
