Direct-to-consumer overseas companies (Temu/Shein style) yes this is a big change.
EU has shown that no De Minimis on VAT is not big problem. Chinese ecommerce can pay those costs just fine if the systems are in place. And price is still competitive for customer.
Considering retail margins, even 100% tariff still probably means at least 30% cheaper product.
EU: Only packages under €150 ($160) are duty-free, and they're planning to scrap even that. Since 2021, they collect VAT on everything, no matter how small.
Japan: Has a ¥10,000 ($70) threshold now, but already announced they're killing it by late 2026.
China: Basically no threshold at all. You only avoid duty if the calculated tax is under $7. Even their special e-commerce imports pay 70% of normal VAT.
Yes, totally normal and not radical at all.
I really don't get why HN posters feel the need to polish a turd.
The problem for low-value items is not the import duty. It's the delay of processing.
I am running an electronics development company in the EU. To us it's mission critical to be able to get devkits, samples, prototypes, spare parts etc within 5 days from China.
I would not mind having to pay $1 of duty on a $10 part. I would be in huge trouble having to wait for that part 30 days.
Also: As always, Trump gave nobody any time whatsoever to prepare. The US now suddenly will have to hire thousands of customs employees. New machinery to transport all of this. New warehouses for storing stuff that sits for customs processing.
You could not be more off here. This will turn out to be a gigantic disadvantages for huge bunch of the innovative parts of the US economy. In our industry, nothing matters more than time to get parts.
As you have noticed: All other countries have LOWERED de minimis, and they did this with 12-18 months of advance notice.
Thailand last year tried to get rid of de minimis. They reverted the decision after ONE WEEK.
You are completely underestimating the amount of the US shooting into their own feet AGAIN here. In these days of global shipping volume you MUST have de minimis a country, or else you will be de-coupled from global R&D markets.
I would be delighted if de minimis rules applied to imports. But everyone I know who has tried to import trivial items - books, small presents, and such - has been slapped with wildly unpredictable and excessive costs, and long delays while the paperwork clears.
As for the US - yes, clearly the goal is the destruction of government, health, education, research, and the economy in general. Whatever the people nominally in charge think they're doing, the people who are advising them and setting policy are either cranks or traitors.
Given their links to other countries, it's hard not to suspect the latter.
Interesting... Which people are you talking about and which countries?
This will shift important inventory to local distributors in the US. This makes local supply chains more resilient, not more vulnerable.
No, you will neither get an Intel N100 devkit in the US, nor any Realtek devkits.
No, your supply chains will not get "more resilient". The industry simply is no longer taking your country as a trustworthy an serious trading partner.
If you want to do R&D in electronics, you need quick imports from China.
Yes, the US is totally prepared now for a future of coal powered steam trains, true. Have fun with that :)
Realtek devkits are made in Taiwan.
China is clearly important. Nothing here changes that. Orders will just shift to bulk and get sourced from local distributors.
As you know, in practical terms china/taiwan/hongkong don't make a difference anymore when it comes to customs and shipping times.
But I understand and value that you understand the business, and we are looking at it from a different angle and potentially from inside/outside a bubble.
I understand your point that markets will adapt looking at it on a large scale. But the question is HOW the market is adapting. In the US far too many people are assuming that the world will bend for Trumpamerica.
In reality the world is at least in my industry is doing free-trade agreements in record time now. And the people in China I work with are not even thinking about the US market anymore at all. The future markets are elsewhere on this planet. What they care about is that the EU won't buck to Trump and also implement any kind of trade barriers against China just to please Trump.
And again: You are talking about bulk distribution. I am talking about small businesses, R&D, rapid prototyping, time to market. Days count. Every day I wait for a prototype I have developers sitting here doing nothing. You can not "shift" that problem. There is only one region where you are able to get not just SOME of the electronic parts you need, but ALL of them.
And that very clearly is not the USA.
is there a way to track the progress on that btw? Like a dashboard or something to show the number of machinists being hired, average salary for a machinist, maybe a volume weighted average of percentage of small parts that can not be made in the US. metrics like that would really showif all this trade war stuff is working or not
mikewarot•6mo ago
Is he actively trying to implode the US economy, and kill the reserve currency status of the dollar? I ask because it sure seems like it to me.
I expect a wave of US business collapses in the next 18 months as a direct result of this action. I do NOT expect an instant resurgence of manufacturing in the US.
You might be tempted to look back at the semi-miraculous turnaround of manufacturing from the depths of the Great Depression, into the wartime production of the US that out-produced the rest of the world, in what appeared to be less than 3 years, and think we can just do that again.
However, appearances are deceiving, the industrial mobilization of 1941-1943 was the result of years of preparation from graduates of the Army Industrial College, who had a new plan every few years for complete mobilization of our extant manufacturing infrastructure. Given our current administrations penchant for bulldozing Chesterton's fence and putting in a concentration camp in it's place, it's likely the folks who may actually have had a plan for the present, have all been fired.
We barely have the infrastructure in the US to make the machine tools to make the production tools to ramp up industrial production. We've spent the last few decades telling all the promising youth that production and factory jobs were a dead end, thus compromising our labor force.
This is not going to end well.
Edit/Append: It occurs to me that this is Trump's way of trying to get back to "the good old days" when the Federal Government was almost entirely funded by tariffs (aka import taxes/duties).
mindslight•6mo ago
Yes. If you read the regime's crackpot "economist's" book it lays out a bizzarro upside down framework whereby having a strong currency is a liability and needing manufactured goods is a strength, with the cure being to destroy our currency such that we too can be an impoverished work camp.
In reality of course the actual problem was never a strong currency by itself, but rather that the political establishment didn't spend the gains from a strong currency on mitigating the damage to our industrial base (under the banner of fake "fiscal responsibility"), but rather just gave that wealth away as artificially low interest loans to make the all important Line go up.
casefields•6mo ago
mindslight•6mo ago
I agree that the looting of much of our industrial base was a terrible thing to let happen. That doesn't mean applying a solution that would have been appropriate decades ago will have the same effect now that the horses have long ago left the barn. It's merely setting us up for the next trend by which we will be sold off.
burnt-resistor•6mo ago
It takes several years and lots of money. And investment ain't going to happen without both stability and demand. This merely allows domestic competitors to raise prices to encourage more inflation with a profit-price spiral. Aggregate demand will soften by virtue of increasing prices. Furthermore, trade deficits are stupid metrics to fixate on when fair value (cash and goods) flows in both directions. This is what happens when a stupid, ignorant person is surrounded by even more evil, greedier, manipulative advisors, anointed unitary executive, and allowed to legislate by fiat. (Trump isn't very dangerous or concerning by himself; it's the advisors plus the power given to him to rapidly rubber stamp special interest agendas that are concerning.)
ghufran_syed•6mo ago
rcxdude•6mo ago
Moving manufacturing into the US takes a lot of up-front investment and would take a long time to pay off. It could happen if the manufacturers believe that the pricing pressure is going to remain present for the time that it takes to pay off. This is what's meant by 'business wants to see stability'. The current administration has shown the opposite of that, with a chaotic series of rules which don't appear to be well thought through, or likely to stick, so it's mostly achieving the worst of both worlds.
(A similar thing is true of defense spending: if the government is commissioning some manufacturing for which it is the only buyer, and it has demonstrated that the amount that it actually buys is liable to fluctuate wildly in the name of 'cost savings', then the price it pays per unit is going to reflect the risk that the business which is setting up that manufacturing doesn't actually sell as many as promised)
HelloNurse•6mo ago
treetalker•6mo ago
Isamu•6mo ago
That’s exactly it, he wants to eliminate income taxes. In particular his own taxes. Everyone else is along for the ride.
Because tariffs won’t be enough, he needs to cut the federal budget in ways that don’t affect him personally.