E634: How Much Are China Tariffs NOW?

Confused about tariffs? You’re not alone. Here’s what the latest ruling means for your bottom line. In this episode, Dave dives into what the latest rulings are, what the real impact on your costs are, and what might be coming up in the next few months. 

Thinking about taking some risk off the table? Or are you looking at taking an extended break from e-commerce in general? Know what your e-commerce business is worth with Quiet Light Brokerage.   

E-commerce stocks jumped Friday after the Supreme Court struck down most of President Donald Trump's global tariffs, providing relief to online retailers that have been forced to raise prices and alter supply chains.

But is this truly the end of Trump's tariffs? 

In today's podcast, Dave dives into what the final tariffs are, what the tariffs may look like in the future, and what changed. 

Timestamps

• 00:00 – Introduction to Tariff Changes and Impact
• 00:29 – Overview of Recent Tariff Legal Rulings
• 00:55 – How Tariffs Affect Your Import Costs
• 01:24 – The Role of Quiet Light Brokerage in Business Stability
• 02:55 – Winners and Losers from Tariff Rulings
• 03:23 – The Fate of Section 301 Tariffs
• 04:20 – Tariffs on China and the Trade Truce
• 05:18 – Average Tariff Rates Before and After the 15% Global Tariff
• 06:16 – Duration and Future of the 15% Global Tariff
• 07:09 – US-China Trade Ceasefire and Negotiations
• 08:33 – China’s Negotiating Leverage Post-Ruling
• 09:58 – Implications for US Trade Partners: Canada and Mexico
• 10:52 – Tariff Refunds and DDP Shipments
• 13:16 – Summary and Final Thoughts on Tariff Planning

As always, if you have any questions or anything that you need help with, leave a comment down below if you're interested.

Don’t forget to leave us a review over on iTunes if you enjoy content like this. Happy selling and we’ll talk to you soon!

Full Audio Transcript

Ecomcrew (00:00.596)
What's up everyone, it's Dave here. And as you've probably heard by now, Donald Trump's tariffs were declared illegal, or at least a lot of them were declared illegal. Now there is a lot that's going on now with tariffs. So if you were confused before, you're probably way more confused now. The big question I think that everybody has is, okay, what is the impact on my bottom line? Like what am I paying in tariffs if I'm imported from a place like China? So sure.

the tariffs were declared illegal, but which tariffs were declared illegal and what's the ultimate kind of aftermath of all of the tariff fiasco has been going on. Now it was complicated of course by the fact that Donald Trump basically two minutes after the Supreme Court ruled that the tariffs were illegal, he instituted a 15 % global tariff. So it's hard to keep track of all of this tariff mess. In this episode, I'm gonna break it down to you really, really simply.

And that way you're going to know exactly what the impact to your tariff bill is going to be the next time that you import from China. Also stay tuned because I'm going to tell you why this 15 % global tariff, it basically does not matter when it comes to importing from China. And it's a surprising reason, which you might not realize. All right, on to the podcast. Welcome to the EconCrew podcast. Podcast that for nearly 10 years has been devoted to helping you to develop, launch,

sell better DTC products for Amazon and beyond.

Ecomcrew (01:31.918)
So if you're like me, last year was probably a pretty stressful year for you running an e-commerce business, not the least of which was because of tariffs and compounding things. Not too long before that we had COVID, which was some of the most stressful times ever as an e-commerce entrepreneur. Now, the only reason I was able to manage with all these stress levels is because I had sold a business through Quiet Light Brokerage a few years prior.

So we had just found out that we were having our first child and I wanted to make sure that my family had a bit of a nest egg and I didn't have to worry about whether I'd have an income the next year for my business. So I talked to the guys at Quiet Light Brokerage and asked what it would take to sell my company. They gave me a roadmap for what it would take to sell my business, helped me prepare it to get the highest valuation and the entire sales process went about as smoothly as I could imagine. So I was encouraged from Joe at Quiet Light.

on multiple occasions to walk away from a deal that I might have otherwise taken. And ultimately I got a higher valuation than I'd initially asked for. So if you're waking up in the middle of the night, frequently thinking and stressing about your business, maybe it's time to go over to Quietlight and get a free valuation. So check out quietlight.com. All right, onto the podcast. Okay, so let me just break down to you really quickly who the biggest winners were from the Supreme Court ruling that tariffs were illegal.

The big winner was Brazil, but right after that, it was China. And this isn't really that surprising. China and Brazil have had the biggest tariffs put on them. However, a lot of the tariffs that were put on China, they're not going anywhere. So just stay with me for a second. I'm going to break that down in just a minute. OK, so the first thing that you need to know is that those Section 301 tariffs, the one that Trump instituted during his first presidency. Well, those are going nowhere.

So you've probably been paying those tariffs now for almost 10 years and those tariffs range from 7.5 % to 25%. Those have not been declared illegal at least yet. So yes, there is some potential that maybe this will also get taken up in the Supreme Court and those will be declared illegal too at some point. But right now the Supreme Court's ruling does not affect those tariffs. So basically whatever you were paying in tariffs before Donald Trump 2.0 took office,

Ecomcrew (03:52.792)
Those aren't changing. This basically targeted their Supreme Court ruling, targeted the emergency tariffs which Donald Trump put in place during his first or his second presidency, the so-called reciprocal tariffs or the so-called fentanyl tariffs. So how that impacts China, I'm not going to break down the other countries. Okay, that is a whole other ball of blocks we are not going to cover, but breaking it down for China. China had two

new tariffs put in place after Donald Trump 2.0 took office. So yes, the tariffs went up and down from like 10 % all the way up to 156%. But what they eventually settled to during the China US truce or trade truce is that China was getting 10 % so-called fentanyl tariffs and 10 % reciprocal tariffs. These are effectively gone. So that's great news. 20 % in tariffs gone.

Well, that's not quite the case because like you probably heard, Trump put in a 15 % global tariff. So basically we lost 20 % in tariffs and we gained 15 % in tariffs. So the overall effect of that is that basically your tariffs from China are going down about 5%. Now global trade alert did a really nice study of this to decide what the actual average tariff that somebody is going to pay importing from China and what it is. Now the average tariff, this

is made up of just kind of an overall blended average. So for example, Donald Trump 1.0's tariffs, they could have ranged from anywhere from 7.5 to 25 % depending on the product category. So for us, about three quarters of our products are paying 25 % in duties and about the other quarter only paying 7.5%. So looking at the blended average, Global Trade Alert says that before the 15 % global tariff that Donald Trump put in, basically China duties were going from 36.0

8 % on average to 21%. And now after the 15 % tariffs, the average is going up to about 29.7%. So yeah, it's confusing. But basically what it means is that the average tariff rate on something being imported from China has gone from 36.8 % to 29.7%. That's pretty reasonable savings is actually more than 5%. So yeah, everything else being equal, you're paying roughly 6 % less in tariffs now. Now,

Ecomcrew (06:16.814)
this 15 % global tariff, Donald Trump can only put it in place for 150 days. So in 150 days, this 15 % global tariff will go away. Now, of course, Trump is trying to figure out new ways to get his kind of tariffs put in place that go around the Supreme Court ruling. Now, whether that happens or not, it remains to be seen, but theoretically in 150 days, that 15 % global duty will be gone. you're…

duties that you're paying on goods from China will be roughly 20 % less. But this probably doesn't matter because of something massively important that is going to take place this month. So right now, China and America have a bit of a trade truce. It's a ceasefire. It's not a trade agreement. So basically both China and the US agreed to kind of have a ceasefire until November of 2026.

So at end of this year, that truce is set to expire and it's going to be all on hell again. Now, truth of it is neither China nor America wants that to happen. So they're trying to avoid this and they're trying to avoid this by one of the biggest meetings of two world leaders in a long time. So on March 31st, Trump is scheduled to fly to China and meet in Beijing with Xi Jinping.

Now they're not meeting there to exchange pandas and say, Ni Hao and hello. They're meeting there largely to work out a longer trade deal. So what people would hope is that this is going to go from some rolling one year ceasefire to a longer term trade deal, which is beneficial to both countries. Now, if you're a betting man, probably you would bet that the long-term deal is going to kind of resemble the short-term deal that they're in right now. And that would be roughly a 36%.

However, the Supreme Court ruling has given China a massive amount of negotiating leverage when it comes to this meeting with Trump. the former editor in chief Hu Xijin of the state-run Global Times said, Under the current fragile balance between China and the U.S., Trump has now lost one card after the Supreme Court ruling, while China still holds all of its cards. And that's basically a lot of the feeling in China.

Ecomcrew (08:33.272)
China has just a little bit more leverage now after that Supreme Court ruling. So if you're an imported from China, hopefully what that means is that there'll be a longer term deal, which reduces those tariffs from 36%. So maybe something a little bit lower. Because if China and the US work on a trade deal, well, Trump doesn't really have to worry about what the Supreme Court rules for various different tariffs, whether he can push through different tariffs through Congress.

As long as China and the US have a trade deal, they don't have to work. Trump doesn't have to worry about any of that stuff. And the truth of it is, when you look at the US's trading partners, there's only a few countries that really make up the majority of China or the US's duties. So China is a big one of those. So as long as it can work out trade deals with its biggest trading partners. Well, this whole global tariff mess. Well, who really cares what the global tariff rate on Madagascar is? Trump's going to try to figure out

trade deals with its biggest trading partners. But again, who knows what's actually going to happen during this meeting. It could turn out to be an absolute cluster, you know what? And maybe we'll be paying a ton more tariffs after this current truce expires. But hopefully it'll result in China buying a lot more stuff from the US and the US lowering tariffs. I think that's everyone's best case scenario. Speaking of trade deals, just a couple other countries which are worth mentioning.

So my home country of Canada and Mexico. So the 15 % global tariff still does not apply to Canada or Mexico. So everything is still KUSMA eligible and basically goods from Canada and Mexico are duty free. So good news if you're importing from there. The other thing I should mention too, which kind of goes back to China, a lot of these targeted tariffs on things like timber and aluminum and steel, those are still in effect. So if you're importing steel products,

You're still paying those massive duties close to 50 % or more. And then there's some other little industries as well, or we're not little, but probably fairly small for most people listening to this podcast. So things like solar panels and EVs, those are still getting massive tariffs. So those have not been declared illegal. Now regarding tariff refunds, I'm not even going to open that ball of wax because who knows what's going to happen there.

Ecomcrew (10:52.192)
It does seem like the Democrats are pushing for refunds for all those tariffs that have been paid, but that's a pretty big refund to be issuing if you're the U.S. government. And for a government that's already pretty in debt, I don't think anybody really wants to issue a ton of refunds there. So the Dems may talk a big game, but ultimately, when it comes time to write that check, probably nobody's going to want to write that. But again, who knows? No matter what happens, though, it does appear that

anything to do with tariff refunds is going to take years and years to work out. So I wouldn't be waiting on any tariff refund checks to come in the mail. I know my customs broker did send out a notice to all of its customers saying, Hey, if tariff refunds do come, just remember that the U S government now, they issue those refund checks, not via check anymore, but through automated clearinghouse. So you need to set up your ACH credentials with the U S government. If you are going to get those refunds. Now me personally, I am.

not bothered to do that because I'm not counting on this happening anytime soon, but it is probably something worth doing in case they do start issuing those refunds. think the more interesting question is, is what's going to happen if the government does make a bunch of tariff refunds? What's going to happen to all those DDP shipments? So this is one of the reasons if I'm kind of being a little bit skeptical, one of the reasons why a lot of Chinese factories have agreed to do DDP.

So if a factory does DDP, it's them that's technically eligible to get those duties back, not you. And even though you also technically paid those duties, it's gonna be the factory that gets those duties and you think they're gonna give them back to you? Probably not. So theoretically, it could be a bunch of Chinese factories who are shipping DDP that are going to get all those tariffs back. Now, who knows what's gonna happen? A lot of these factories were of course shipping under

kind of BS shell companies. So whether those companies will actually be eligible to get tariff refunds, who knows? But it is a pretty interesting question. What's going to happen if tariff refund checks do get mailed? I know not refund checks, but you get what I'm saying. ACH payments. What's going to happen to those payments if the government does start to issue refunds and what's going to happen to all these DDP shipments? Who knows? It's going to be a fun one as a bunch of importers try to get money back from their Chinese factories for all those tariffs that they paid to their supplier. All right.

Ecomcrew (13:16.748)
So hopefully that clears up a little bit of this mess regarding tariffs. Hopefully that's a little bit clearer what your actual tariff bill is going to be for the next few weeks or a few months at least. And hopefully it just helps you to make a little bit more informed decisions. I'm sure I got something wrong in this podcast. So please send your hate mail. Well, don't send your hate mail anywhere. Go on to ecomcrew.com and post your hate on the comment section there. But hopefully I got nothing wrong in this podcast.

Until the next one, happy selling.