Model Railroading > Tariffs - 104%? Actually now 145%!

I see tariffs are 104% for China at the moment, can anyone who knows how that works chime in?  Is it just 104% onto the cost of the model so essentially double?  Or is there some other math breakdown?  I heard some companies are considering pausing shipments and others could easily go under in short order with lack of cash flow if this drags on more than 2-3 months.



Edited 2 time(s). Last edit at 04/10/25 09:32 by CO1309.

I can't speak for the intentions of this escapade, but the importer pays the tariff. It's up to the importer's discretion how much of that additional cost they pass onto distributors or directly to consumers. Of course, per the economic price elasticity principle, an increased price may decrease demand or diminish it completely. Discretionary spending like hobby items are very vulnerable. It's obvious that less sales means less profit for hobby suppliers. Then there are additional costs for inventory and the costs of borrowing money if items don't sell. Not good.

Victor Baird

Posted from Android



Edited 5 time(s). Last edit at 04/08/25 12:54 by wabash2800.

Pretty sure tariffs apply to the value of an item at the time of importation, not the eventual selling price. So, I don't think the list price should double, although who knows what enterprising capitalists will try to get away with.

True, but obviously it will affect the price if the importer wants to pass along cost to the consumer--distributor.

Victor Baird

CPR_4000 Wrote:
-------------------------------------------------------
> Pretty sure tariffs apply to the value of an item
> at the time of importation, not the eventual
> selling price. So, I don't think the list price
> should double, although who knows what
> enterprising capitalists will try to get away
> with.

Trains.com did an interview with Jason Shron and after struggling through watching that because of David Popp is hardly palletable, plus reaching out to a few other people I know in the industry it appears like there are a few options likely to occur:

1. An approximatley 27-35% cost increase on models that are delivered.  Shron's example was a model costing the company 50%.  Applying that to a $300 locomotive you get the 104% tariff on $150 so that means the locomotive now is $456 which in this hypothetical case is a 35% increase.  

2. Some model train companies will hold off on deliveries, Jason already said they've done this based on timing.

3. Companies sell direct, cut their profits, expect dealers to cut their profits, etc to lower the impact.  Any more hurt on dealers than what has already occured is unacceptable in my opinion and I will boycott the purchase of anything if the dealers bear the brunt of this by either being cut out or their slim margins further reduced.

Additionally, not all companies have the same financial picture.  I believe it will be much harder on ScaleTrains than on Walthers for example.  Some companies simply cannot afford to hold off on bringing product, especially for a prolonged period of time.  So they must bring these items into their U.S. warehouses and/or send them off to dealers to sell so they can generate some income for payroll and future projects.



 



Edited 5 time(s). Last edit at 04/08/25 13:26 by CO1309.

I suspect that if the prices go up far enough, it will drive the price up on used model railroad supplies and equipment?

Poor Fast Tracks. I have made two kit orders from them recently and so far they have officially decided to hold the price. I wouldn't be surprised if most of their customers are in the U.S.. 

My understanding that there was an $800 exemption on shipments but Trump took that away?

Victor Baird



Edited 2 time(s). Last edit at 04/08/25 15:51 by wabash2800.

I may have to get a Mexican or Canadian address to deliver my models to then sneak them across the border into the US. (Like that would work)

That tarif crap will affect more than trains just watch the fall out forthcoming!

I've got 1 Rapido C36-7 coming and 3 Bowser C415s.  I'm probably going to have to cancel those orders if this situation persists.  It's not that the Tampa Northern needs the power, its just that I would have liked to have the new power.  In the end, I'll be just fine if I have to cancel the order. 

Denis Blake
https://www.facebook.com/share/g/18ubaJ3pbm/

I will definitely pay the tariffs happily, knowing that I'm helping the U.S. in the process. Tax is tax one way or the other. Pay it off of a purchase or pay it off of your income. The models coming out today are still a huge value, based on what you are getting for the money, tariffs or not. Yes, we should look to find other countries produce them long term, but for now, let's keep our favorite Scale Trains, Rapido, Athearn, Broadway Limited, Atlas, Woodland Scenics Etc. afloat.  It'll all be figured out in the long term. We should not abandon them now. They need us but we need them too...

SD40T-2 Wrote:
-------------------------------------------------------
> I will definitely pay the tariffs happily, knowing
> that I'm helping the U.S. in the process. Tax is
> tax one way or the other. Pay it off of a purchase
> or pay it off of your income. The models coming
> out today are still a huge value, based on what
> you are getting for the money, tariffs or not.
> Yes, we should look to find other countries
> produce them long term, but for now, let's keep
> our favorite Scale Trains, Rapido, Athearn,
> Broadway Limited, Atlas, Woodland Scenics Etc.
> afloat.  It'll all be figured out in the long
> term. We should not abandon them now. They need us
> but we need them too...

I have no problem supporting the companies but the question is will everyone else?  Will they even ship their items knowing the prices have gone so high?  The nightly news last night said at the current rates it's essentially a halting of most trade.  Today China just announced its higher tariffs which may prompt the White House to hit them again at 150%, 200%, etc.  

I noticed on eBay yesterday that some Chinese searchlight signals that I use have suddenly doubled in price. That is where we are at.

I'm staying the course on my orders, Esp. the C415s may order more. I was talking to a friend about this and one
of the interesting things is Rapido. Rapido is a Canadian Company and they are opening a warehouse in Buffalo NY (can't wait for my F40PHm-2)
But, since they are in Canada, they are not subject to the Tariffs on imports to there. They can sit on items, See what happens deal with 
this in various ways. We May see Manf.importers like Athearn flee to Canada and then ship into the USA.
Of Note,  Several items I have ordered direct from small Canadian companies have ship points from within the USA. So I think they 
have figured some of this out. Good for them. 
The best outcome is for China to cry uncle in the next few days and we got some good from this.
Leave your orders in place and let it ride, Little is due right now, Lets see. The C415s for example a due in Sept/Oct. 

SALGUY Wrote:
-------------------------------------------------------
> I've got 1 Rapido C36-7 coming and 3 Bowser
> C415s.  I'm probably going to have to cancel
> those orders if this situation persists.  It's
> not that the Tampa Northern needs the power, its
> just that I would have liked to have the new
> power.  In the end, I'll be just fine if I have
> to cancel the order. 
>
> Denis Blake
> https://www.facebook.com/share/g/18ubaJ3pbm/

Items shipped from Canada into the US must pay tariffs too, though not as much as from China. Even though Rapido has opened up a warehouse in the U.S., there will still be a tariff line item on invoices, if I understand Jason correctly.

Incidentally, there was an $800 minimum value for U.S. tariffs to be charged on Chinese goods, but Trump is removing that as of May 2.

Victor Baird

inyosub Wrote:
-------------------------------------------------------
> We May see Manf.importers
> like Athearn flee to Canada and then ship into the
> USA.
 



Edited 7 time(s). Last edit at 04/09/25 10:26 by wabash2800.

I only have a couple items of interest 1) Rapido D&RGW cabooses and 2) Genesis D&RGW cabooses.  I don't think those will be ready to ship until maybe early 2026 so I'm hoping things well shake out by then.  If they don't, I'll probably reduce the the quantities to a minimum.

Cheers,
Jim

Perhaps someone on eBay will be offering deep discounts to unload, when they discover demand had gone way down...

Victor Baird

Now they're 125%, essentially an embargo.  Not many will dare send products at those prices.

One thing not mentioned very much is that all these new tariffs (new meaning the enormous number of items not previously subjected to tariffs) will require an correspondingly ENORMOUS increase in US Customs capacity to assess, process and collect these tariffs.  Since this was sprung on the world (including the US Customs service) with virtually no notice regarding the scope of products, we will soon see massive shipping bottlenecks at all ports of entry as the Customs Dept. tries to deal with all the extra work with nowhere near the staffing needed.  Add on to that the Customs software changes to adjust to the new tariff proposals.   Difficult to develop, test and deploy updates to Customs systems when the tariff rate, commodities and countries affected are changing, sometimes every few days (see China, as an example).

This is going to get worse, much worse than most can imagine.

- Norm

NCA1022 Wrote:
-------------------------------------------------------
> One thing not mentioned very much is that all
> these new tariffs (new meaning the enormous number
> of items not previously subjected to tariffs) will
> require an correspondingly ENORMOUS increase in US
> Customs capacity to assess, process and collect
> these tariffs.  Since this was sprung on the
> world (including the US Customs service) with
> virtually no notice regarding the scope of
> products, we will soon see massive shipping
> bottlenecks at all ports of entry as the Customs
> Dept. tries to deal with all the extra work with
> nowhere near the staffing needed.  Add on to that
> the Customs software changes to adjust to the new
> tariff proposals.   Difficult to develop, test
> and deploy updates to Customs systems when the
> tariff rate, commodities and countries affected
> are changing, sometimes every few days (see China,
> as an example).
>
> This is going to get worse, much worse than most
> can imagine.
>
> - Norm

I read an article that customs was notified in January of the plan and they are ready.  It was a Washington Post online article I believe.

So late breaking news, the Tariffs were delayed today except for China.  Maybe Canadian vendors can get orders and buy from them?



Edited 1 time(s). Last edit at 04/09/25 15:49 by SPDRGWfan.