Talk About Tariffs

Yes, there’s been a lot of talk about tariffs but the media and the message are missing something. While many Americans might already know what I’m about to say, I believe there is a large population that does not.  Maybe one of you will hear this. I’m not sure what difference that will make but I've felt the need to clarify.

NONE OF THIS IS ACCURATE.

If you're reading this, you know that I own and operate a small business that imports product from Italy (high-end sport socks / The Freshly Minted). There are thousands of other businesses like mine that import products – from clothing to shoes to olive oil to pasta to wine & spirits - from various countries around the globe.

There are also thousands of multi-sized and large businesses that import widgets, screws, nuts, bolts, packaging, materials, metals, titanium, carbon fiber, bicycles, kitchenware, appliances, sheets, towels, strollers, board games, toys (and on and on) from various countries. The approximate value of imports to the USA in May was over 3 billion dollars. My $10,000 shipment of Mint socks was part of that statistic.

No matter the size of the business, if you are importing product from another country you are and were already paying ‘customs and duties fees’ prior to any topics of tariffs coming from Washington D.C. over the last eight months in Wash. Tariffs are not new; customs and duties are tariffs.

The percentage that ones shipment is taxed depends upon the HTS (Harmonized Tariff System) code assigned to it (each and every product is assigned an HTS code.) The code and the % levied on your shipment is based on the material make-up of the product.

In my case, imported Italian socks are taxed at 11.3% (merino) or 14.6% (poly blend). There are also added brokerage fees and various administration fees that make up a ‘custom and duties’ fee. These fees have absolutely nothing to do with shipping costs. Shipping costs are separate and are based on weight of the shipment, size and number of boxes, miles traveled, and method of travel (by air or by sea).

Earlier this year, the voice of the White House decided to increase tariffs, coming up with random values for various countries and imposing deadlines on respective leaders to negotiate a better deal.  The European Union’s blanket tariff increase was 10% and the final deadline for wheeling and dealing was early August. The threat, at the time of the 10% increase on April 5th, was an increased 30% if a deal isn't made. In the end, just prior to August 01, a compromise was struck and the new tariff on products coming from the EU would be ‘only 15%’ instead of 30%.

The 15% rate, it has been said, offered a significant reduction to earlier threats. That might be so but this is still not correct nor is it reality.  All business owners, big or small, were already paying import duties (tariffs). It’s not like product was just flowing in freely. And WE, business owners – people like me, are the ones paying the taxes and taking the hit.

Italy is not being penalized with a 15% tax. Italy is NOT paying the federal government a 15% tax on my product. I am paying the 15% tax on my product in order to bring it into the USA and continue to operate my small business. It’s the American small business owner and the American consumer who are  paying the price. 

And it’s not 15%. I now pay a total of 26.3% tariff on my merino socks and 29.6% on my poly socks.

14.6% + 15% = 29.6% total tariff on polyblend socks.

11.3% + 15% = 26.3% for wool.

A friend recently said, “It’s the consumers that are paying for this, not you.”  Not true. Most businesses, big or small, will absorb at least some of the hit and operate with lower profit margins.

With respect to my business, I’m doing my best not to raise prices. Inflation skyrocketed during Covid and it never dropped. Businesses like mine were forced to raise prices. The last thing I want to do is raise prices yet again. How much more can the market bear? Consumers will be – if not already – getting hit with increases from every side. The last thing I want to do is to ask my customers to pay even more for these beautiful Italian socks.  

When I first started this business, my former business partner and I wanted people to be able to own something luxurious at an affordable price. “Everyone should be able to own something mint” we said. And seven years later I still want that.

If you see a slightly higher price on my website, it’s because I am now paying 26-29%+ on each and every pair of socks that I import from Italy.  I am not and will not raise any prices on any item that was part of my inventory prior to the new additional tariffs.

Please, if you can, support small businesses. 

And may your next ride be even better than the last. Cheers. Suzette