An Update on the State of the Model Train Industry

[Mayner]

3 hours ago, Warbonnet said:

Correct.

What this whole experience has taught me is just how much Americans do not understand tariffs and how they work. It's nothing to do with companies, it's basically a tax imposed by Governments.

 

Bread and Circuses basically Trump has sold the tariffs to the American people as something the Chinese exporters rather than the American consumer will pay.

It may all work out in the end with the tariffs used to fund Federal tax cuts so American will be better off in the end.

Interestingly the 30% tariff for the next 90 days anyway is not a lot higher that the 23% vat Irish purchasers pay on IRM models perhaps the Irish revenue introduce a 7% duty on toy trains to 'even things up' with our American friends. I found out to my cost about 1o years ago that New Zealand charges a 5% duty on toy trains when I imported a loco from the States.

 

[BosKonay]

There is no duty on models globally unless NZ are a bit ‘independent 

[Mayner]

45 minutes ago, BosKonay said:

There is no duty on models globally unless NZ are a bit ‘independent 

They say there is an exception to every rule, NZ very much does its own-thing.

While New Zealand a staunch supporter of Free Trade particularly unrestricted duty free access for our food and timber exports to Europe and US, NZ imposes a 5% import duty on toys including model trains not that we have an indegenous toy manufacturingindustry to protect.

Apparently customs only levy duty on imports above $1000nz in value, I got hit a number of times when I imported high value large scale locos from the States which were bascially unobtainable on the local market.

 

Edited 19 hours ago by Mayner

[Horsetan]

5 hours ago, commerlad said:

The Mango "King" hopes they don't work it out

I don't think he fully understands it either but, equally, he doesn't really care since it won't affect him personally - his finances (dubious at the best of times) are mostly insulated unlike most of his supporting clientèle.

[James Regan]

8 hours ago, Warbonnet said:

What this whole experience has taught me is just how much Americans do not understand tariffs and how they work

Of course the stupid American archetype is your go to which says more about you and the peanut gallery than anything about Americans… 

so let me spell it out for you in simple terms… Your product is now 30% more expensive to sell to the US… we Americans can do math see, so a $300 locomotive is now $390. 

If your answer to that is tough, we will continue to offer the product at that price, with no adjustment for the US market thats your prerogative. Just know that attitude may have consequences.

 

 

 

4 hours ago, Mayner said:

Bread and Circuses basically Trump has sold the tariffs to the American people as something the Chinese exporters rather than the American consumer will pay.

Actually most tariffs are imposed at the wholesale price so it wont be a 30% impact at retail. Also there will be price adjustments along the whole supply chain, so yes the Chinese exporters will pay some of it.

[James Regan]

12 hours ago, BRBlue said:

I do not think you understand how tarriffs work

Im pretty sure you don't understand how markets work. If IRM tries to sell at the same price into the US, their models are now 30% more expensive to the consumer. The consumer couldn't care less whether you call, those charges VAT or tariffs or any other tax. Oh and its Europeans who havent figured out they been robbed by massive VAT taxes for years.
 

You also clearly dont understand that the US has a deminimis exemption of $800 for shipments from most countries. My question for the IRM guys is whether they have given any thought as to whether that may be available for their products. It doesnt apply obviously to their shipment in bulk into Europe. It would apply to their shipment of individual models to the US. Its not entirely clear given the Chinese origin of the product whether the shipment from the UK would break the chain and thus the deminimis exemption would be available. 
 

[James Regan]

4 hours ago, Mayner said:

Apparently customs only levy duty on imports above $1000nz in value

In the US its over $800 in value and depends on the product category - the duty product codes are in a volume an inch thick. I think in Europe they get almost no exemption on import duties since 2022. They also get hit with the 20+% VAT on imports. Its brutal.

[commerlad]

3 hours ago, James Regan said:

Of course the stupid American archetype is your go to which says more about you and the peanut gallery than anything about Americans… 

so let me spell it out for you in simple terms… Your product is now 30% more expensive to sell to the US… we Americans can do math see, so a $300 locomotive is now $390. 

If your answer to that is tough, we will continue to offer the product at that price, with no adjustment for the US market thats your prerogative. Just know that attitude may have consequences.

 

 

 

Actually most tariffs are imposed at the wholesale price so it wont be a 30% impact at retail. Also there will be price adjustments along the whole supply chain, so yes the Chinese exporters will pay some of it.

It is not that the product is 30% more expensive. The product price is the product price.

Americans are paying 30% more because of the Tarrif imposed by Trump and this is collected by the US 

Why blame (and expect the manufacturer to suffer) for something that is done by Trump.

Edited 12 hours ago by commerlad

[commerlad]

10 hours ago, James Regan said:

Im pretty sure you don't understand how markets work. If IRM tries to sell at the same price into the US, their models are now 30% more expensive to the consumer. The consumer couldn't care less whether you call, those charges VAT or tariffs or any other tax. Oh and its Europeans who havent figured out they been robbed by massive VAT taxes for years.
 

You also clearly dont understand that the US has a deminimis exemption of $800 for shipments from most countries. My question for the IRM guys is whether they have given any thought as to whether that may be available for their products. It doesnt apply obviously to their shipment in bulk into Europe. It would apply to their shipment of individual models to the US. Its not entirely clear given the Chinese origin of the product whether the shipment from the UK would break the chain and thus the deminimis exemption would be available. 
 

We Europeans have known for years what VAT is, Yes we pay it on just about everything when we buy something. IT is the equivalent of the Sales Tax in the US  but is levied by central government not individual States, Counties, Departements or whatever else the country concerned calls its  smaller administrative sections. Oh and by the way we also have a minimum value upon which VAT is claimed on an imported package. 

Your last part does not make sense, If a bulk order goes to Europe it therefore has nothing to do with the US and no US Tarrif is therefore involved.

If it is then sent on to the US then it does come under US Tarrif rules and if there is a Diminimis then that would apply if the value of the package once it arrives in the US is under that.

Going through another Country and or being increased or decreased in size along the way is totally irrelevant as IT IS ONLY WHEN IT REACHES THE US THAT THE TARRIF APPLIES.

Edited 4 hours ago by commerlad

[commerlad]

5 hours ago, James Regan said:

In the US its over $800 in value and depends on the product category - the duty product codes are in a volume an inch thick. I think in Europe they get almost no exemption on import duties since 2022. They also get hit with the 20+% VAT on imports. Its brutal.

The only Import duty is the VAT other than for such as Tobacco and Alcohol (Hence Duty Free lounge at Airports for certain amounts eg= The Diminimis value) )and Fuels (Usually only imported by large multinationals as somehow a carry on Jerry Can is not a good idea and it is a banned substance on the postal service. ) which have extra excise duties

And yes even when buying smaller amounts from a retailer (eg Petrol at a forecourt) we have to pay Vat on the Total

(Product Cost + Excise Duty) + VAT = Total Price

 

6 hours ago, James Regan said:

Actually most tariffs are imposed at the wholesale price so it wont be a 30% impact at retail. Also there will be price adjustments along the whole supply chain, so yes the Chinese exporters will pay some of it.

There may or may not be adjustments of product price along the line but a Tariff cost is not paid by anyone until it gets to the US so the Chinese supplier may charge less but they will not at any point pay a Tariff. 

[BosKonay]

7 hours ago, James Regan said:

Im pretty sure you don't understand how markets work. If IRM tries to sell at the same price into the US, their models are now 30% more expensive to the consumer. The consumer couldn't care less whether you call, those charges VAT or tariffs or any other tax. Oh and its Europeans who havent figured out they been robbed by massive VAT taxes for years.
 

You also clearly dont understand that the US has a deminimis exemption of $800 for shipments from most countries. My question for the IRM guys is whether they have given any thought as to whether that may be available for their products. It doesnt apply obviously to their shipment in bulk into Europe. It would apply to their shipment of individual models to the US. Its not entirely clear given the Chinese origin of the product whether the shipment from the UK would break the chain and thus the deminimis exemption would be available. 
 

Actually part of the entire war is that the deminimis was removed. So tariffs and duty will be levied on the entire shipment value.

Re New Zealand models are not toys but a dedicated category of their own and should not have duty charged (this is of course separate to tariffs) Accurate labeling is key here but some  carriers at national level do ignore such things. 

2 hours ago, commerlad said:

The only Import duty is the VAT other than for such as Tobacco and Alcohol (Hence Duty Free lounge at Airports for certain amounts eg= The Diminimis value) )and Fuels (Usually only imported by large multinationals as somehow a carry on Jerry Can is not a good idea and it is a banned substance on the postal service. ) which have extra excise duties

And yes even when buying smaller amounts from a retailer (eg Petrol at a forecourt) we have to pay Vat on the Total

(Product Cost + Excise Duty) + VAT = Total Price

 

There may or may not be adjustments of product price along the line but a Tariff cost is not paid by anyone until it gets to the US so the Chinese supplier may charge less but they will not at any point pay a Tariff. 

The important point here is that no one in China cares and no one outside the Us cares as it doesn’t effect them in any way at all. 

Unless your business is entirely based on exporting to the USA (or importing from China to the USA) (like all the US outline manufacturers for example) then tariffs don’t change anything. 

[DJ Dangerous]

Easy there, @James Regan, nobody is attacking you personally, and there's no need to start insulting people who think differently to you.

The new tariffs, to simplify things for the sake of discussion, are an import tax, collected by the American authorities at point of import.

Manufacturers and exporters have no part to play.

Importers (ie online buyers such as yourself) and American retailers are the ones who pay the tax to the American government.

American retailers then have to choose, do they themselves absorb the increased costs, do they pass the increased costs on to their American consumer, do they try to negotiate a better sale price with the exporter that they are buting from, or some combination thereof.

American-based individuals importing / buying online also face choices, do they buy less, do they pay more, do they ship to an EU address instead, then collect their purchases in a suitcase, that kind of thing.

There MAY be some limited cases where hsome HUGE Chinese companies decide to take a small hit, and reduce their export price slightly.

This would mean that the new taxes charged by the American government have slightly less impact on the American voter.

But, this would be a small number of cases, in companies big enough to absorb the costs themselves, by restructruring workforces or supply chains involving thousands of employees, and would not entirely mitigate the new taxes charged by the American authorities.

That scenario is the opposite end of the scale to A/S / IRM, with ten employees or whatever it is, all UK and Irish based.

A/S / IRM would be better off doing nothing than selling at a loss to a handful of customers.

It's not about a bad attitude, it's about their being no sense in bowing to the whims of an unreliable government, where the rules and taxes are likely to bounce up and down, and their American market is very small.

Nothing to do with Republican or Democrat, nothing like that, just common sense.

Hope this helps you understand a bit better.

[BosKonay]

12 hours ago, Mayner said:

They say there is an exception to every rule, NZ very much does its own-thing.

While New Zealand a staunch supporter of Free Trade particularly unrestricted duty free access for our food and timber exports to Europe and US, NZ imposes a 5% import duty on toys including model trains not that we have an indegenous toy manufacturingindustry to protect.

Apparently customs only levy duty on imports above $1000nz in value, I got hit a number of times when I imported high value large scale locos from the States which were bascially unobtainable on the local market.

 

Here is the EU entry for the category

Commodity information for 9503003000

This tariff is for 2 March 2019  Change date 

Check the chapter notes to make sure this code is suitable for your product.

Get guidance on this product area: Electric lamps,  Toys, games and sports equipment

Discuss this chapter in the forums

All sections

• Section XX: Miscellaneous manufactured articles
  • 95
    
    Toys, games and sports requisites; parts and accessories thereof
    • 03
      
      Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size ('scale') models and similar recreational models, working or not; puzzles of all kinds
      •  
      • Electric trains, including tracks, signals and other accessories therefor; reduced-size (scale) model assembly kits
    • https://www.trade-tariff.service.gov.uk/trade-tariff/commodities/9503003000?currency=EUR&day=2&month=3&year=2019

[Warbonnet]

9 hours ago, James Regan said:

Of course the stupid American archetype is your go to which says more about you and the peanut gallery than anything about Americans… 

so let me spell it out for you in simple terms… Your product is now 30% more expensive to sell to the US… we Americans can do math see, so a $300 locomotive is now $390. 

If your answer to that is tough, we will continue to offer the product at that price, with no adjustment for the US market thats your prerogative. Just know that attitude may have consequences.

 

 

 

Actually most tariffs are imposed at the wholesale price so it wont be a 30% impact at retail. Also there will be price adjustments along the whole supply chain, so yes the Chinese exporters will pay some of it.

Well that's most disrespectful. Where did I call Americans stupid? I merely pointed out that they had little understanding of tariffs, which I found surprising. That doesn't make them stupid, just that they were ill informed or perhaps misled by their leaders. Please do not make assumptions based on your own outlook. 

I have spent a lot of time in America and admire a great many of American achievements and culture. Enough of your gaslighting please. 

The Chinese exporters will pay none of it, unless it's to the same Chinese company importing it at the other end. It will then be passed onto the end consumer pays it and it goes into the exchequer. 

If I sell you a locomotive tomorrow from here and you live in the US, the 23% VAT will be removed from your purchase price (as it always has been) and the 30% of tariff imposed by your government will be added, along with whatever other charges. It's as simple as that. We have no control over it. Still, 30% is better than what it was, thanks to the climb down in recent days. 

 

[Mayner]

5 hours ago, BosKonay said:

Re New Zealand models are not toys but a dedicated category of their own and should not have duty charged (this is of course separate to tariffs. 

The EU 9503003000 TARIC & UK 9503.10.10 commodity code for "Reduced (scale)models, electric model railways" commodity codes do not appear in the New Zealand Customs schedule. effective 1st July 2024  https://www.customs.govt.nz/globalassets/documents/tariff-documents/wtd-2024/section-xx-july-2024.pdf

The NZ schedule has grouped model railways into the 9503.00.09 tariff category which includes both toys and scale models subject to a 5% tariff

23C . . . . . Electric trains, including tracks, signals and other accessories therefor

55A . . . . . . Model railways and accessories, other than those of Tariff item 9503.00.09 23C

While New Zealand has adapted the World Customs Organisation's HS Codes (6digit) different countries and trading blocks appear to have expanded beyond a 6 digit HS code to meet their own specific requirements.

As an independent country NZ has applied duty to both toys and models in a 9503.00.09 category which are generally 0 rated in other countries. Its possible that the 5% duty on toys and models in the 950300.09 category is a hangover from the days the NZ Government protected local industry with import tariffs, apparrently at one stage Tri-ang New Zealand factory which assembled toys and models for the local market, apparrently including an NZ version of the "Transcontinental' train set. 

Edited 4 hours ago by Mayner

[Broithe]

The product remains the same price, the extra payment required for the privilege of purchasing a product from outside the country is a penalty imposed on the purchaser by their own elected government.

Few suppliers are going to drop their income sufficiently to subsidise a foreign customer to shield them from their own government's tax rises.

[Horsetan]

4 hours ago, DJ Dangerous said:

Easy there, @James Regan, nobody is attacking you personally, and there's no need to start insulting people who think differently to you.....

Unfortunately antisocial media means that almost everyone does.

*shrugs*

 

[DJ Dangerous]

On the topic of the current tariff war, the tariffs were sold to the American people as retalliatory.

That was untrue.

Many countries throughout the world, including America, have mild forms of protectionism, and there's a general status quo, 5% here and 10% there etc.

The new American tariffs are a first strike against anybody who treats America on a level playing field, rather than kissing up to them.

The formula that the American governement used to derive these tariffs was not related to current tariffs, but to trade deficits and trade surpluses, goods only, excluding services, hence they ended up with the embarrassing situation of taxing islands inhabited solely by penguins.

They also chose to exclude services, and only use goods, to create this flawed formula.

If they have a trade deficit in goods and a trade surplus in services which cancels out the former, then there is a net zero surplus / deficit.

Excuse my spelling, but there's sand in my keyboard that I can't quite clear out!

[skinner75]

Trump said he was going to impose mad tariffs, and the fools still voted for him...

That being said, they were probably more focused on all the racist policies he promised

Edited 1 hour ago by skinner75

[BRBlue]

14 hours ago, James Regan said:

Of course the stupid American archetype is your go to which says more about you and the peanut gallery than anything about Americans… 

so let me spell it out for you in simple terms… Your product is now 30% more expensive to sell to the US… we Americans can do math see, so a $300 locomotive is now $390. 

If your answer to that is tough, we will continue to offer the product at that price, with no adjustment for the US market thats your prerogative. Just know that attitude may have consequences.

 

 

 

Actually most tariffs are imposed at the wholesale price so it wont be a 30% impact at retail. Also there will be price adjustments along the whole supply chain, so yes the Chinese exporters will pay some of it.

You should be a comedian

[Broithe]

The art of the deal....