More Tariffs: What You Can Do to Be Prepared
New waves of tariffs are rolling in, keeping everyone in this industry on their toes. Within the last few months, the Office of the United States Trade Representative announced approximately $200 billion in additional Chinese imports that are now subject to tariffs.
On Sept. 24, 2018, a 10% tariff was implemented on 5,000+ more products imported from China. (In January 2019, this will rise from 10% to 25%.) Of these products, half are considered “intermediate goods,” meaning that they’re products used to produce final goods or finished products. This category includes things like computer and machinery parts.
Upon hearing this news, China implemented some tariffs of its own, impacting $60 billion in U.S. imports. And there are talks of more changes to come.
As we mentioned in our last blog about tariffs, published in late August, these changes mean price increases for our customers. Because this newest round of tariffs effects so many different types of products, it’s fair to say that tariffs now impact nearly everyone – not just certain markets or industries.
The bad news: There’s no way around these price increases. The companies that incur these cost increases coming into the country have no choice but to share some of the financial burden with their customers in order to remain profitable.
The good news: The tariffs are impacting everyone, which means that we’re all in this together. Every company, every distributor, and every manufacturer is dealing with the same frustrations. But there are a few things you can do to be better prepared for these changes:
- Evaluate your inventory and buy what you need early (and in large quantities) to offset some of the financial impacts of purchasing items next year. This can also help protect you against additional tariffs that may come into play in 2019.
- Request early releases or hold-for-release orders to avoid losses.
- Anticipate price fluctuations and help others in your organization understand that there needs to be some flexibility when it comes to accommodating increasing costs.
- Don’t hesitate to ask questions or ask for clarification. Van Meter is happy to answer honestly, help you evaluate your inventory, and find solutions to help you deal with increasing prices.
As more tariff changes are announced in the coming months, we’ll keep you updated on how they’ll impact you – and what you can do to be prepared.
Article by Ben Edkin, Sales Support Manager, Van Meter Inc.