Every once in a while, the wife or I would get a small package shipped to us from China. We never intended to buy directly from China, but Amazon does a bang-up job of making it non-obvious where the seller is.
Pretty much every time I pulled a Chinese package out of the mailbox, I marveled at how they could make that work economically. A sub-$10 widget, shipped half way around the world, and they made a profit? Astonishing!
Then, somehow, I learned that the US government was subsidizing the shipping of these small packages from China. Pardon me? I'm paying money so Chinese companies can profit. Why? It seems there was an old regulation about that, and it titled China as a 3rd world growing economy. A law from the 1800's that had never been updated.
Now we are learning about a cute little thing called the 'De Minimis' rule, which stated anything under $800 in value needn't bother with that pesky tariff thing. So Chinese shippers were getting US taxpayer subsidized shipping and were excused from paying tariffs.
The shipping subsidy was revamped, but not totally lost, during the first Trump presidency. Now, under his second presidency the De Minimis rule has been set aside.
How much of a big deal is this? China had a $5,000,000,000 a year trade stream to the USA built almost entirely on these rules. Five Billion Dollars A Year.
What has been the effect of Trump leveling the playing field? Packages from overseas coming into the USA have dropped by 80%. Yes, 80% of our incoming international postal traffic was commercial shipping on the US taxpayer dime, and also paying no tariffs at all. Before anyone asks, no... no other nation reciprocated.
No comments:
Post a Comment