The Confusion about Tariffs
People who have never imported goods themselves for either personal use or for retail sale may be confused as to who pays tariffs but it is my experience that it is the recipient of an imported good that eventually pays freight, duties, tariffs and taxes.
I have personally imported books, compact discs, DVDs and blu-rays from abroad and none of the businesses have paid tariffs on my behalf unless that had done so previously to import these goods into their country, to then sell it to someone else.
No eBay or Amazon seller that I have purchased goods from has ever paid customs brokers for products made in their own country and this is how I had managed to save money for decades, as I’ve mentioned in a March 2010 page on this blog.
Instead of placing special orders at my local CD stores, which resulted in a considerable mark-up and delay in receiving the CD, I had taken advantage of a postal importation exemption that allowed me to import shipments valued at less than CA$20, duty and tax free.
No costly customs brokerage fees. Nothing. And it was advantageous on light shipments like that of a CD single, DVD or blu-ray, whose shipping and handling costs were low because they were light. And shipments from England were relatively inexpensive and fast as well.
But I digress…
Like duties and taxes, tariffs are only calculated and billed at the border, by custom brokerages working for the courier. And in my case it was Canada Post because I avoided the major couriers because of their higher brokerage fees. And to facilitate shipments, some companies like Amazon do have their own customs brokers, calculating and including an estimate on shipments to Canada.
Amazon Canada also provides estimates on goods that might be imported, so it is always the customer that ends up with the final bill, not the manufacturer of the product ordered.
After all, they’re the people buying the product and they’re willing to pay to import it mainly because it isn’t made or still available in their country.
Tariffs are based on demand and the British, French, Scandinavian and Australian compact discs, compact disc singles, DVDs and blu-rays that I purchased were not manufactured and distributed in Canada so I paid to import them. And had I purchased them via a retailer, they would have paid a distributor a markup to cover their payment of these fees, which would have been recouped from me by the retailer when I purchased the product there.
The same scheme applies to most products, including American dairy imports. But the Canadian dairy companies importing it to make products have yet to reach the threshold that would result in tariffs, the “tariff rate quota”, so they haven’t paid any tariffs on American dairy for decades, nor have their Canadian consumers until the retaliatory tariffs kicked in April 2025.
This 25% tariff has not been added to books, musical instruments, compact discs, DVDs or blu-rays made in the United States and hopefully that wont happen in the future. But I’ll keep an eye on the situation and update this blog accordingly if something happens.
I hope this helps people that were confused about the situation. And remember, shop around!
- What is a tariff? An Economist Explains
- How Tariffs Work – Export Development Canada
- The Smoot-Hawley Tarriff – United States Senate
Pain In The Tariff!
So, I was eying “Dexter’s Laboratory – The Complete Collection” at several retailers and had never considered that the tariffs would have a secondary effect on goods that are not tariffed so I didn’t expect sticker shock a few days back – The price of this DVD collection just skyrocketed, by $30 at some of these retailers.
Like CDs and vinyl, DVDs and Blu-rays are not currently included in the list of goods that are being subjected to tariffs. But I suspect their prices will go up in the states, well above the $20 postal importation exemption, which is rather annoying. And I presume any shipment from the states would be delayed going through customs because they’ll have more forms to fill out, unless Canadians just stop importing from the states via mail.
I did just order the collection from a Canadian seller on eBay for the amount I had encountered before the hike, preferring to avoid the American and Chinese sellers. And if need be I could always try the U.k and Europe for other releases as well.
I personally like Amazon u.k, Amazon France and FNAC for CDs and Region Free DVDs from Europe, and I do have a region free DVD player for some French films that never made their way to DVD in North America. But sometimes deals can be had for under $20 Canadian, not including shipping, and sometimes the shipping rates are acceptable.
I have emailed my local MP and several electoral candidates suggesting a $60 exemption for postal importations from Europe, the U.k and several more of our stable trade partners so I’m hoping we’ll be able to order more from those countries after the election is done.
If you want to support a $60 exemption for postal imports, which is long overdue, you can contact your local Member of Parliament via this form, after the election of course.
Hopefully we’ll be done with this tariff nonsense soon…
British Pound More Affordable
You may want to consider ordering goods from Great Britain as soon as possible because the British Pound is near parity with the American Dollar and consequently more affordable to Canadians, as you can see from the current exchange rate shown in this graphic:
Alibris U.K, Amazon.co.uk, HMV.com and Musicroom.com are the U.K companies I import from the most and I tend to order CDs, sheet music and film on DVD/Blu-ray from them, the latter being playable only on multi region players, which can be purchased from Amazon Canada and Amazon America.
You should note that some DVD and blu-ray players can play Region 0 discs, some in PAL so consult your player’s manual for details.
High Currency
Now that the Canadian dollar is stronger at around 80 cents against the greenback I’d say this is the time to take advantage of sales in the states, like those at Amazon.com, American Musical Supply, Arkiv Music, Guitar Center, Music & Arts, Musician’s Friend
and Sheet Music Plus.
Please note that most shipments valued at less than CAD$20 are exempt from duties and taxes. Click here for details on this exemption.
Budget Day Goodies ?
Today is Budget Day in Ottawa. And the current government has been promising to address some issues related to the higher prices Canadians pay for certain products.
Canadians pay significantly more for certain products than the Americans and although some of the price differences can be attributed to tariffs, labour and transportation costs, much of the purchase price is pre-determined by the manufacturer.
“Country Pricing” has become the standard and unfortunately Canada’s prices have not been adjusted to match our dollar’s strength.
Some online retailers have done their best to match prices but Canadians were still forced to either import products from the states or pay higher prices at their local retailers.
I suspect that tariffs will be reduced or eliminated on certain products in this budget, perhaps on books, clothing, electronics and home appliances.
Those are the most imported products, especially on Black Friday. But I’m also hoping they will follow the recommendations in the February 2013 Senate Committee report of the US/Canada Price Gap and raise the de minimis threshold for postal shipments from $20.
When you import most products by mail you are exempt from duties, fees and taxes if the product or products shipped are valued at less than $20 Canadian.
I’ve managed to save some money using they exemption. But many countries like the United States, Japan, Hong Kong and Singapore had raised this minimum to US$100 in November 2011, enabling their citizens to avoid paying the hefty brokerage fees some couriers charge on parcels.
Brokerage fees have recently gone up in Canada so I’m hoping they will at least consider a CAN$50 threshold.
The other probabilities in the budget are reductions in credit card/banking fees, funding for an expansion of high speed internet into rural areas, and the unbundling of cable channels so I guess lots of Canadians will be watching this afternoon.
The budget broadcast will air on television and online on CPAC at 4PM Eastern. Details on the budget will also be made available on the Government’s Official Site after 4 PM Eastern.
Madness Free Black Friday
Though Black Friday is recent to Canada it has been a tradition in our media to review the many videos of the insanity happening down south.
Most Canadians usually watch these, amazed and confused as to why this madness happens, especially since the commercialization of the internet.
The last time I stood in line for hours for a sale was in the early 2000’s, on boxing day. And I eventually got what I wanted later on in the day, when the stores where less busy.
These days I usually spend my boxing days surfing for deals instead. And today I’ve found a few online at the stores I had listed in a blog entry yesterday night.
I also browsed some of the American sites, calculator at hand, to find deals there on CDs, DVDs and Blu-Rays.
The major drawback in ordering from the States is that their shipping and handling fees are high and they rarely offer free shipping to Canadians. But sometimes the reduction in price offsets the shipping and handling costs, making a purchase worthwhile.
I’ve taken advantage of deep discounts from Alibris, Amazon.com
, Barnes & Noble
, J&R Computer/Music World
and The Space Store
numerous times, generally for purchases valued at $20 to maximize the savings.
Purchases valued at under $20 are not subject to duties and taxes. And this is quite important if your purchase is being shipped to you via a courier like UPS, whose customs brokering fees can gobble up some of those savings.
If your order’s value is higher than $20 I recommend that you try to have it shipped to you by the United States Postal Service, that way the customs broker will be Canada Post. This reduces the costs considerably.
Another option would be to order from the U.K , from companies like Alibris UK, Amazon UK
You will of course note that many DVDs and blu-rays sold in the U.K are incompatible with our equipment. Region 2 DVDs and Region B Blu-Rays are not compatible whilst Region Free DVDs and Blu-Rays are. And these companies do sell the occasional Region 1 DVD and Region A Blu-ray, which are the formats that are common to North America.
BTW, our dollar is stronger than the American dollar at the moment and a pound is approximately 60 cents higher than the Canadian dollar at the moment, not including the credit card foreign currency fee.