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…
Still Waiting…
I had hoped for details on any change to the intellectual property provisions of NAFTA by the first of August but it appears too early, even for speculation.
A new council had been created earlier this month and there are concerns about privacy. But nothing yet as too what else the United Stated will want changed.
Unfortunately, our government has extended our copyright term from 50 to 70 years due to the Trans Pacific Partnership Agreement so now we’ve got to wait twenty more years for copyrighted works to enter the public domain, regardless of the fact that the United States has withdrawn from the agreement.
I certainly hope they will not go after our ability to make private copies of recordings for personal use or attempt to resurrect proposals to tax hard drives and flash media. But I am hoping they will negotiate higher exemptions for personal importations by mail.
As it stands most imported parcels valued under $20 are exempt from duties and taxes, as stipulated on the Canadian Border Services Agency web site. And I think this amount is way too low.
eBay had proposed a higher de minimis threshold for Canadians since July 2016 and had created an official Parlimentary petition that year and a petition for its users earlier this year.
They published a study (PDF) by the C.D Howe Institute and I’m guessing from eBay’s response to the renewed NAFTA negotiations that they will petition the government again on this issue.
According to a 2016 Nanos Research poll, 76% of Canadian respondents want a $200 exemption and over 15,000 Canadians had signed the official Parlimentary petition that year, so i’m guessing eBay will bring attention to this issue again durring the negotiations.
I will, of course, keep an eye out for new information and will update this site a.s.a.p.
Ebay Asks Canadian Users To Sign Petition
Ebay is asking Canadian users to support their petition to raise the de minimis threshold from $20 on postal importations for personal use.
Most postal shipments imported into Canada for personal use valued at less than $20 in Canadian funds are exempt from taxes and duties. And although this amount was acceptable when it was adopted in the 80’s, many nations have adopted higher de minimis thresholds since.
The current de minimis thresholds for American residents is US$800 and when European Union residents import merchandise for personal use their de minimis threshold is €150. Considerable amounts compared to the Canadian rate.
In late 2016, a petition had been submitted to the Parliament and the government responded by saying it is assessing their options :
“The Government is working to facilitate trade and streamline administrative burdens, and has undertaken concrete actions to facilitate low value shipments. In 2013, as part of the Beyond the Border Initiative, Canada and the U.S. harmonized processes to expedite the customs administration of low value shipments and waived the requirement for a certificate of origin for such shipments to benefit from preferential tariffs under the North American Free Trade Agreement. Furthermore, in 2011, three generic tariff classifications were introduced in the Customs Tariff to facilitate the processing of low value non-commercial imports arriving by post or by courier.”
Please consider signing this new petition by clicking here. Thank you.
Postal Update And More
It appears that we will be getting our mail delivered on Friday. The Canadian Union of Postal Workers has refused arbitration and Canada Post had delayed the lockout until noon, Monday the 11th of July, 2016.
The other carriers have been reporting a boom in business so it is obvious that most of the e-commerce retailers have already taken preemptive action to keep their parcel deliveries flowing. And as I’ve mentioned in previous entries, most people will likely see no significant delays in their parcel deliveries.
I will update this blog with new information if the situation changes, of course. So don’t forget to pop on by over the next few days.
By the way, a new Parliamentary petition has been created to ask the federal government to raise their de minimis threshold on postal imports from $20 to $200 (in Canadian funds).
At the moment postal shipments valued at less than $20 in Canadian funds are exempt from duties and taxes. And this petition calls for shipments to be valued at less than $200 in Canadian funds to be free of duties and taxes, in response to a study commissioned by eBay that I had mentioned in a previous post.
I have signed the petition and hope that you will sign it too before the October 14th, 2016, when the petition closes.