Wedge to start figuring for Tariffs

[musicofnote]

From Dr. Dave's Facebook page

"We have an update on the tariff situation.

Canada post has provided the following information.

Tariffs will go into effect on August 29th for "most shipments".

The Canada Post collection system should be in place by August 28th, but they do not know exactly what the system will be yet.

They have shared that they will be integrating with a 3rd party app to allow us to pay the projected 35% tariff at the time that we generate a shipping label. We will have to either increase prices for US customers by 35%, charge them the tariff at checkout, or absorb the tariff, which is impossible given that 35% is more than our profit margin on mouthpieces.

Even though our customers will have to pay the tariff we will bear the administrative costs of using the third party app, which will be 10% of the tariff amount plus a flat fee, and will cost us about $10,000 a year based on our current sales into the US.

So far there is plan in place at Canada Post for handling returns or exchanges. Specifically there is no plan in place for refunding the tariff on returned goods, and mouthpieces sent out in exchange will probably be tariffed a second time.

Canada Post does not know if our products will be spared under the USMCA agreement (although they should be spared according to the Canadian government), but Canada Post thought probably would be taxed based on the information they had.

There is no grace period or other provision for mouthpieces that have already been ordered and are in production but have not been shipped, meaning we will have to either absorb the tariff, cancel the order and issue a refund, or request a payment from customers who have already ordered and paid for their mouthpieces.

Paying the tariffs ourselves would cost about $10,000 on orders currently in production.
We were told that there might be more information about some of the unknown issues tomorrow, but it will probably be a few weeks before it is clear how the system will work.

I will keep our customers updated as more information is available. We are shipping as usual with Canada and all other countries other than the US, but will not be accepting orders or shipping to the US until furher notice.

The one viable option in might be to ship to the US by UPS, in which case you will probably be charged a 35% tariff by UPS prior to delivery.

We are sending emails to all of our US customers who have orders pending to explain the situation.
Stay tuned."

[musicofnote]

Appeared 2 hours ago on the Wedge FaceBook page:

"We have a tariff update.

What we know so far:

Zonos (the third party acting as a brokerage company to collect the tariff on behalf of the US government) has informed us that our mouthpieces will not be granted exemption under the existing USMCA trade agreement (although according to USMCA they should qualify).

The tariff and associated brokerage and fees add up to roughly 38.5% of the shipment value.

There has been no indication that there will be a way for customers to have the tariff refunded if they make a return.

There has been no indication that customers will be able to avoid a second tariff on mouthpieces going out on an exchange.

What we do not know:
We do not know for sure when the system will be active, but they think it will be ready for Friday August 29th.

We do not know if there will eventually be a way for customers to get a refund on the tariff if they make a return.

What we are doing:
We are contacting Zonos to confirm that the USMCA trade agreement is not being honoured and that the tariff and fees will be 38.5%.

We plan to resume taking orders from the US when the tariff collection system is in place and we have tested it.

Customers placing new orders and having mouthpieces shipped to the US will have a 38.5% tariff and brokerage fee added at checkout.

We will not offer returns or exchanges on new orders to customers in the US until we know that there is a way for customers have the tariff refunded.

Customers in the US who received a mouthpiece within the last 90 days before the tariff took effect will be able to make returns for a refund.

Customers who received a mouthpiece within the last 90 days will be able to make exchanges, but they will be responsible for paying the tariff on the new mouthpiece. They will have the option to get a refund instead.

We currently have about 50 orders for customers in the US in production that have not been shipped. Once these orders are ready and the tariff collection system is in place we will ship these orders to customers and pay the tariff ourselves.

Doing so will more than wipe out any profit and put us in the red for the month.

We will keep you informed as we learn more and modify these policies accordingly."

[musicofnote]

And now this...

https://www.cnet.com/tech/delivery-comp ... -affected/

In 1960, around the world, a grass roots movement started to try to economically force the Apartheid regime in South Africa to step-down. Finally they did and this boycott movement was given credit for contributing to the fall of Apartheid.

Starting in Canada, an international grass roots movement has started to not purchase any US goods. Also to move away from US "services" where possible, re-starting efforts to create the "digital Euro" so as not to be dependent upon US credit cards or payment methods, such as PayPal. The boycott of US goods and services has spread throughout the world, with articles now and again appearing from various countries, how people there are buying more locally than US products. But I don't think any of "us" figured on the "help" from this side of the trade equation. And while we know, this is only temporary, it's like a kind of warning shot across the trade bow. What happens if goods don't get delivered?

If you're in Facebook, just one of many, MANY similar groups world-wide…

Swiss Boycotting US-Products/-Companies
https://www.facebook.com/groups/653742200884686

[JTeagarden]

The problem with the US actiing unilaterally is that we are creating big incentives for other countries to create parallel instutions and processes as a way of avoiding being coerced as easily in the future, the US comprises roughly 5% of the world's population, and clearly has influence far in excess of what it has any kind of right to assert.

Don't like having to hold Dollars to transact internationally? Then maybe the Euro is stable enough to act as a substitue reserve currency...

[Conn100HGuy]

The history of the world is littered with the unintended consequences of trade wars. This will be no different. Great nations thrive on trade and understand that "trade deficits" are political cudgels. You reap what you sow.

[BGuttman]

The US courts have ruled that the tariffs are illegal -- only the US Congress can impose tariffs unless delegated to the President and the law being quoted to justify the tariffs has no mention of tariffs.

There will be a lengthy appeal process going up to the US Supreme Court which doesn't resume operation until October. If the tariff is determined to be illegal, the Gummit will be required to pay it all back. That will be an interesting result. Keep tuned.