More tariffs questions

[msinger]

And what that importer does with the prices is up to them if they want to eat it or pass it on to their retail sellers who also decide how much of it to eat and pass on to their customers.

Exactly.

It's not difficult to find real businesses operating in the US that confirm this is how it works. While it's possible that China or the importer may cover 100% of the tariffs in some cases, that's not always going to be the case either. It's a complex issue, and what works for one business might not work for another.

 

[Zbip57]

The seller who imports the product from China (the "importer") is responsible for paying 100% of the tariff.

Already you're mixing things up again.

The importer is buying the product from China. He's the buyer, and China is the seller. The buyer importing the product pays the tariff, not China.

If the importer then chooses to resell the product to someone else, okay, then he becomes the seller and somebody else becomes the consumer who ultimately purchases the product.

Can we at least agree on that? Or are these terms somehow used differently in the USA compared to Canada and the rest of the world?

For example, if I purchase a drone from dji.com and DJI ships it to my home from China, DJI is responsible for covering the full tariff. Whether they choose to pass any of that cost on to me by increasing the product's listed price at dji.com is entirely up to them.

Again, let's be precise here. You could be saying either of two things there.

1) Ordered straight from China to your home:
If you order a $3000 Mavic from DJI.com in China, with it shipped directly to your home, that makes DJI the Chinese exporter and it makes you the importer. You are responsible for paying the tariff. Customs will hold the package until you pay the 145% tariff. Or, if it's being delivered via FedEx/UPS/DHL, they will pay the tariff on your behalf, then hold the package until you refund them that expense plus whatever additional brokerage fee they charge for handling that process on your behalf. You end up paying the 145% ($4350) tariff fee.

2) Ordered from China, but transferred via a DJI store located in the USA:
You order a $3000 Mavic from DJI.com in China. China ships it to a DJI-America distribution centre. In that case, yes, DJI-America is responsible for paying the entire 145% ($4350) tariff fee for importing the Chinese product into the USA. DJI-America then ships the drone to your door. You already paid your $3000 online to China. How much extra do YOU think DJI-America will charge you for the delivery?

DJI-America paid a $4350 import tax. They're not going to deliver that drone to you for FREE!

Whether they choose to pass any of that cost on to me by increasing the product's listed price at dji.com is entirely up to them.

Sure. It's entirely up to them. They could choose any of several different options:

1. So it's not a shocking surprise for you later on, they could disclose right up front on their Chinese website [as Amazon proposed], that a $3000 Mavic is going to cost you an additional $4350 because of the 145% US import tariff; or
2. If it's being imported to you via a DJI-America store, they can surprise you later with an extra $4350 delivery bill before handing over the package at your door; or
3. DJI-America can simply "eat" some portion [or even ALL] of that $4350 on every Mavic delivered in the USA. It's up to them to decide how quickly they want to go bankrupt; or
4. DJI in China can choose to "eat" that $4350, paying it directly to the US gov't, so you the consumer only need pay the original $3000 with no additional import fees to burden you, because Chinese companies always do business like that out of the goodness of their heart.

If I'm missing any other uniquely American ways of doing business, please let me know.

Once again, you're showing your ignorance for how things work in the US.

You sell your [really excellent!] Flight Reader program for $79USD. Let's say Canada suddenly imposed a 145% import tariff on any American software products. That would cost me, the importer, and extra $114.55 if I wanted to buy your $79 product.

Would YOU be willing to "eat" that for me? Would you send me $114.55 every time I bought one of your $79 products? Is that really how things work in the US?

From that same video, here's a comment from someone else stating they are going to absorb 100% of the tariff cost (for other reasons):

View attachment 182245

Oh please! Where in that comment does it say he's willing to absorb the tariff cost?!?
He says, "My customer is locked into a price and I cannot change anything."
He is being forced to absorb the tariff cost, unable to pass that cost to the customer because he's locked into a contracted price.

This idea that sellers (or "importers") aren't willing to absorb any of the tariff cost is totally far-fetched.

It depends entirely on how much of a profit margin the seller is willing to accept. If he's already making a 100% profit, then absorbing a 10% tariff cost to stay in business might be tolerable.

But if his normal profit is 100%, a 145% tariff is going to kill his business unless he passes that cost on to his customers. If he passes only 45% on to his customers, and "absorbs" the remaining 100% himself, it means he makes ZERO profit and is giving his products away for free.

Right, the seller (or "importer") is always the one who pays 100% of the tariff.
I'm not sure why you feel the need to keep repeating that point. As far as I can tell, no one in this thread is disputing it. Because, well, it's a fact.

Your entire argument centres on what portion of the tariff the American importer is willing to "absorb", versus how much gets passed on to the American consumer. My argument is, in either case it's Americans who are being forced to pay that 145% tariff fee to your gov't, not China.

Yet you, and your White House, think that's propaganda?

Now, considering that sellers don't always pass on 100% of the tariff costs, you can probably see why the idea of Amazon or other US retailers listing tariff costs separately is even less straightforward. Unlike sales tax, it's not a simple calculation that can just be plugged into their systems and automatically shown alongside prices.

I'd think retailers could even use that as an advertising incentive! We sometimes see retailers advertising a price-reduced "no tax" day. The consumer benefits from lower costs on that day, but the seller still has to pay the sales tax to the gov't. The are effectively "eating" the cost of the tax themselves to attract more sales.

Amazon makes money by selling large quantities at low profit margins. Small retailers can't compete with that. But because Amazon lives on small margins, there's a finite limit on how much they can afford to "eat". Not even a company as large as Amazon is willing to "absorb" the cost of a 145% tariff.

Amazon just wants to make it perfectly clear that they are not responsible for the sudden price-gouge. If you notice a sudden [up to] 145% price increase on items imported from China, that's money going straight to your gov't, it's not going to Amazon.

 

[MS Coast]

Also, it's a bit surprising how many non-US citizens believe that the American consumers are the ones fully bearing the burden of these tariffs. That's simply not true and comes across more like propaganda than fact.

It seems that we're all confused about the details, including the man in the White House who created the tariffs. I've not yet seen any factual information about how the 145% tariffs on imports from China will affect the final cost to a consumer in the US. The only information I have found is on the Internet, which is just as accessible from Canada as it is from here in the US.

Regarding drones, and specifically DJI drones, I'd suspect that most US citizens believe that consumers will bear all or most of the tariff fees on items imported from China. Speaking for myself, I don't believe DJI will absorb a tariff fee greater than the end cost of the products they ship to the US, leaving we consumers to pay all or most of it. I don't think that sounds like propaganda.

So, sticking to fact, does anyone have any factual information on the final cost of DJI drones purchased by consumers in the US with the new tariffs in force?

 

[AMann]

.So, sticking to fact, does anyone have any factual information on the final cost of DJI drones purchased by consumers in the US with the new tariffs in force?

Like what both bzip and msinger are pointing out, It depends if you buy it direct from DJI.com in China, or buy it from a store like B&H. Those differences make you either the legal importer or a US store customer.

 

[MS Coast]

Like what both bzip and msinger are pointing out, It depends if you buy it direct from DJI.com in China, or buy it from a store like B&H. Those differences make you either the legal importer or a US store customer.

Yes, of course.

But does anyone have any factual information about the final cost of DJI drones to consumers in the US? Either directly from DJI or from a US retailer?

 

[Zbip57]

But does anyone have any factual information about the final cost of DJI drones to consumers in the US? Either directly from DJI or from a US retailer?

If I go to DJI.com, it knows I'm connecting from Canada and shows me the regular price for a Mavic 3.

If I use a VPN to make it look like I'm connecting from New York, DJI.com still shows me the same corresponding price in US$ for a Mavic 3.

Either way, DJI still sells at the same price they always have.

If you go to Amazon, or any other retailer, they're still selling existing stock at the same prices as before.

Since I'm Canadian and live in Canada and thus am apparently unable to know anything about how things work in the USA, I'd suggest one of you Americans should send a query to your local Customs department and ask what happens if you order a $3000 Mavic online from DJI.com. Will they, or won't they, hold the shipment and demand a 145% tariff from you?

 

[Zbip57]

Here, I even looked it up for y'all.

U.S. Customs and Border Protection can be consulted for procedural
matters or other questions at [email protected].
[...]
Additional information may be obtained from USTR at (202) 395‐5725, the section 301 hotline. U.S.
Customs and Border Protection can be consulted for procedural matters or other questions at
[email protected]. You may also wish to seek an electronic ruling on classification or country of
origin from Customs at erulings.cbp.gov. Customs determines all matters relating to tariff treatment of
importer goods and their country of origin.

 

[MS Coast]

Here, I even looked it up for y'all.

No human available. Just a recording suggestion you leave information regarding a "current or proposed docket" for a call back within one business day. Section 301 is the authorization to allow the president to impose tariffs. I don't think the hotline is set up to field questions from curious individuals about a potential future purchase.

 

[msinger]

You order a $3000 Mavic from DJI.com in China. China ships it to a DJI-America distribution centre. In that case, yes, DJI-America is responsible for paying the entire 145% ($4350) tariff fee for importing the Chinese product into the USA. DJI-America then ships the drone to your door. You already paid your $3000 online to China. How much extra do YOU think DJI-America will charge you for the delivery?

DJI-America paid a $4350 import tax. They're not going to deliver that drone to you for FREE!

While this might be how tariffs work in Canada, this is not true for the US.

Tariffs on physical goods are imposed on the declared value of those goods. They are not imposed on the price the end consumer pays.

He is being forced to absorb the tariff cost, unable to pass that cost to the customer because he's locked into a contracted price.

It doesn't matter whether importers are covering tariff costs willingly or unwillingly. My point was that it's inaccurate to claim that end consumers always pay 100% of those costs. While that will certainly happens in some cases, there are plenty of situations where importers choose not to pass on the full cost (willingly or unwillingly).

Your entire argument centres on what portion of the tariff the American importer is willing to "absorb", versus how much gets passed on to the American consumer. My argument is, in either case it's Americans who are being forced to pay that 145% tariff fee to your gov't, not China.

Yet you, and your White House, think that's propaganda?

Your argument is a bit flawed, as I've already pointed out above.

DJI is a Chinese company and will be responsible for paying the tariffs. Whether they choose to pass the full cost on to American consumers is unknown. And there are likely countless other Chinese companies facing the same decision.

But, sure, if the importer is an American and the consumer is also an American, then it's very likely that only Americans will be involved in paying the tariff fee.

FWIW, it's not my White House. I'm just a US citizen, and the White House, unfortunately, will never take orders from me.

It's totally propaganda if someone is reporting that either China or US consumers are going to pay 100% of the tariffs. Whoever spouts things like that either is relying on the wrong source of information or has some type of hidden agenda.

Amazon makes money by selling large quantities at low profit margins. Small retailers can't compete with that. But because Amazon lives on small margins, there's a finite limit on how much they can afford to "eat". Not even a company as large as Amazon is willing to "absorb" the cost of a 145% tariff.

I can agree with that if you're referring to Amazon the company and not Amazon the marketplace.

However, in the US, most products on Amazon are not sold by Amazon itself. And that means we have a lot of small businesses all selling the same products from China competing on price alone. So we will see the usual race to the bottom where some of those sellers are willing to eat more of their costs to have the lowest available price in the Amazon marketplace.

 

[Zbip57]

No human available...

All fired by DOGE.

 

[MS Coast]

DJI is a Chinese company and will be responsible for paying the tariffs.

But, sure, if the importer is an American and the consumer is also an American, then it's very likely that only Americans will be involved in paying the tariff fee.

Would you address the conflict between the two statements?

FWIW, it's not my White House. I'm just a US citizen, and the White House, unfortunately, will never take orders from me.

Amen.

It's totally propaganda if someone is reporting that either China or US consumers are going to pay 100% of the tariffs. Whoever spouts things like that either is relying on the wrong source of information or has some type of hidden agenda.

I might call that exaggeration. It's probably better to say that US consumers will bear most of the 145% tariff on imported Chinese drones.

I will suggest that it's totally propaganda to say that China pays all tariffs on Chinese goods imported by the US, as has been done by you-know-who for years. And I'd say that declaring attempts to itemize the cost of tariffs to consumers are a "hostile act" against the nation is a certain indication of a hidden agenda.

So we will see the usual race to the bottom where some of those sellers are willing to eat more of their costs to have the lowest available price in the Amazon marketplace.

So, there's 145% tariff on the declared value of DJI drones coming to the US. With DJI possibly absorbing some of the cost and US firms absorbing part, what's your estimate of the ultimate cost to me of the ~$4000 Mavic 4 Pro I'd planned to buy back before the president began his tariff? It's most certainly not going to be $4000.

 

[msinger]

Would you address the conflict between the two statements?

Sure thing!

DJI is not an American company. They are a Chinese company. When they import their own products into the US, they're required to pay whatever the current tariff rate is based on the declared cost of goods. If they decide not to pass 100% of that cost onto American consumers, then those consumers aren't actually paying the full cost of the tariff.

What am I missing?

So, there's 145% tariff on the declared value of DJI drones coming to the US. With DJI possibly absorbing some of the cost and US firms absorbing part, what's your estimate of the ultimate cost to me of the ~$4000 Mavic 4 Pro I'd planned to buy back before the president began his tariff? It's most certainly not going to be $4000.

I obviously don’t have any of those details, and I have no idea what the tariff will be when DJI eventually releases the Mavic 4 Pro. The only thing I can tell you is the cost won't be $4,000 times the current tariff percentage (like @Zbip57 keeps telling us).

I’m not seeing the point of this exercise. What exactly are you trying to say?

 

[Zbip57]

While this might be how tariffs work in Canada, this is not true for the US.
Tariffs on physical goods are imposed on the declared value of those goods. They are not imposed on the price the end consumer pays.

The end price paid by the consumer includes extras like sales tax etc. It's the same system here in Canada. You pay whatever extra import taxes, duties, and tariffs are required based on the actual before-tax value of the item. If a drone is advertised as costing $3000 before handling, shipping, and taxes are added, then $3000 is the declared value!

Have you yourself ever bought and imported anything into the USA? Have you ever even travelled anywhere outside of the USA??? Flown, or driven, across the border?

You fly overseas and buy a $3000 Mavic over there, or a fancy new telephoto lens for your camera, or whatever. What happens when you land back in the USA and arrive at the Customs counter? They will ask you if you have anything to declare, or they ask you to hand over the declaration form that you pre-filled during your return flight.

If you state that you have nothing to declare, but they choose to search your luggage and find a brand new drone, telephoto lens, or whatever, you will be TOTALLY screwed.

If you lie to Customs by claiming you only paid $100 [your declared value] for this obviously brand new $3000 drone, and they then find the receipt still in your wallet, you will be TOTALLY screwed.

If you properly declare that you bought a brand new $3000 drone, they will ask for the receipt as proof, and then they will make you pay the 145% tariff on that value.

I told you how I used to drive across the border to the UPS Store in Ogdensburg to save on shipping and brokerage fees, right? I once forgot to bring my own copy of the online purchase receipt, and for the first time ever there was no receipt included inside the package itself.

I went inside as usual to pay the required taxes etc based on my "declared value", but I had no receipt to prove what I'd actually paid. The Customs officer got on his computer, went to the website where I'd bought the item, and looked up the price to verify that I was telling him the truth. Phew. ALWAYS tell the truth to Customs. They're deadly serious, those guys.

DJI is a Chinese company and will be responsible for paying the tariffs. Whether they choose to pass the full cost on to American consumers is unknown.

I think we've finally hit the nub of our disagreement. DJI in China is in NO WAY responsible for paying the tariff.

DJI sells the drone for $3000. It's the same price expressed in the same US$ regardless of from where in the world you access their website. After that, it is entirely the responsibility of the importer to pay whatever tariffs apply.

If the American importer chooses to "eat" the full cost of that tariff, or whether the importer chooses to pass some or all of the cost on to the end consumer makes no difference to DJI in China. It's either, or, or both, the American importer or the American consumer who ends up paying for that extra $4350 import tariff tax.

China is only affected when Americans stop buying drones from DJI because they're no longer affordable at that inflated price.

But, sure, if the importer is an American and the consumer is also an American, then it's very likely that only Americans will be involved in paying the tariff fee.

Absolutely, yes.

It is remotely possible, but HIGHLY unlikely, that DJI in China could pay the $4350 tariff directly to your gov't, in order to be permitted to continue selling Mavics to Americans at the usual $3000 price. But paying out $4350 in order to receive $3000 back means they'd be losing $1350 on every transaction.

Nobody is that stupid.

 

[Johnmcl7]

So, sticking to fact, does anyone have any factual information on the final cost of DJI drones purchased by consumers in the US with the new tariffs in force?

Nothing factual about the US drone prices but there's been a price increase on the DJI Osmo Pocket 3 which may hint what's coming to drones:

As tariffs hit, DJI drones go out of stock and the Osmo Pocket 3 jumps in price

The DJI Osmo Pocket 3's new list price is $799, while a majority of DJI drones are out of stock at the company's US website

www.digitalcameraworld.com

The article claims that DJI may have priced the camera too low since the first price increase was before the tariffs however also notes the UK price hasn't changed since launch. Microsoft have significantly increased the Xbox prices supposedly in response to the tariffs but the European prices have had a sharp increase as well.

 

[msinger]

Nothing factual about the US drone prices but there's been a price increase on the DJI Osmo Pocket 3 which may hint what's coming to drones

Thanks for sharing!

So the price for the Osmo Pocket 3 increased from $519 to $799 (a $280 increase).

@Zbip57 that would make the new "declared value" $799, correct? And then the 145% tariff cost would be $1,158.55.

How is DJI covering the cost of that tariff if they are only charging US consumers $799? And if that $799 cost does not include the tariff cost, then why is DJI increasing the price by $280?

Let's use your Ogdensburg experience and dive into a real life example here.

 

[MS Coast]

I obviously don’t have any of those details, and I have no idea what the tariff will be when DJI eventually releases the Mavic 4 Pro. The only thing I can tell you is the cost won't be $4,000 times the current tariff percentage (like @Zbip57 keeps telling us).

I’m not seeing the point of this exercise. What exactly are you trying to say?

No, consumers will probably not pay the entire 145% tariff on a DJI drone imported to the US.

DJI will definitely not pay the entire tariff on the drone.

With an exorbitant tariff such as now in place for Chinese imports, the end cost of DJI drones to American consumers will undeniably be substantially greater than the price for the same drone purchased in Mexico, Canada, or Tahiti.

Do we all agree?

 

[MS Coast]

When they import their own products into the US, they're required to pay whatever the current tariff rate is based on the declared cost of goods. I

That raises an interesting question. Are all DJI products sold in the US imported into the US by DJI, and then sold to distributors and retailers? Or do Amazon, Best Buy, B&H, and others import the DJI products they sell into the US?

 

[msinger]

Are all DJI products sold in the US imported into the US by DJI, and then sold to distributors and retailers? Or do Amazon, Best Buy, B&H, and others import the DJI products they sell into the US?

Or it could be a mix of both.

When consumers purchase drones from dji.com, shipments sometimes come from warehouses in the US, and other times directly from DJI in China.

 

[MS Coast]

Or it could be a mix of both.

When consumers purchase drones from dji.com, shipments sometimes come from warehouses in the US, and other times directly from DJI in China.

I'm wondering who the importer is, not the final shipping point. If the consumer purchases from DJI, I'd suspect that DJI is the importer and liable for the tariffs in all cases.

I'm wondering whether the big box stores in the US import their inventory from DJI China and are liable for the tariffs or whether they buy stock imported by DJI with tariffs paid by DJI.

I just had a text exchange with a DJI sales representative who told me that DJI pays all import duties and fees, including tariffs, on drones ordered on DJI.com from the US. I'll create a new topic with the transcript. It may be a case similar to their tech support reps not really knowing what the real situation is.

 

[mavic3usa]

The truth of the matter is you're never going to know for sure. It has to be that way in order for this tactic to work. Tariffs are places on parts, finished goods, sub-assemblies, entire shipments, and/or kits in pieces and parts, it's not just on MSRP and print it out and go from there. The math is not meant to make sense to the end customers and therefore should not be made available to them unlike a sales tax.

I think everyone is getting caught up in the details like who actually writes the check or who gets the bill in the mail. The next step is to start asking around and comparing stories and the bottom line is nobody knows for sure and it only means more confusion. You know what that means? The story about tariffs wins because there's no way to prove or disprove it. Half will believe the American customer pays and half will believe China pays. The real answer is somewhere in between because of so many factors and moving parts. The government changes their mind every week, the structure reset almost daily, the timing is started and stopped randomly and the actual collection is often overlooked. This is part of the strategy to keep you from pinning it down so you cannot confront or challenge it based on the facts.....there are no facts.

Seems to me if 50,000 Mavics landed in Long Beach, whomever picks up those drones whether it's DJI China or DJI USA or DronesAmericanDistributors (on behalf of DJI), you don't get possession of the goods until you pay up. Where and how Amazon gets their drones nobody knows because they'll likely revisit the process and we don't know what Bezos said to Trump on the telephone earlier this week. What we should be focusing on instead of getting distracted is once again the government is getting unnecessarily involved in the free market (and probably illegally), they are causing uncertainty and disruption which could last indefinitely, and it's not good because the people don't have a voice at this point and so we are left fighting ourselves while the community suffers. The amount of potential flyers and investments and lost opportunities is incalculable. Every chance you get, for everything in your life, when you get the opportunity just say NO to government involvement; it never works.