Chinese Manufacturers Expose Luxury Fashion In Response To The Tarrifs

[malaise]

[MichMan]

1. Here is what I don't understand

I thought tariffs were charged on the declared value of an item, not the retail cost.

Fictitious example. If a high end designer purse, for example, costs $40 to make and sells for $800, I believe the tariff is assessed on the $40. So, let's assume that the current 145% tariff stays in effect. That means the $40 purse gets a tariff of $58 making the cost now $98. It is still being sold for $800. Of course, there are marketing and distribution costs on top of production costs, but that still means the profit margin is very high. Even if the seller wasn't willing to eat the cost, the purse would be marked up to $858, not double like some people claim. Am I wrong?

Some people will pay a lot for perceived status. Not only in clothing, but also some of these high end liquor brands.

[malaise]

2. Let the experts weigh in

This is above my patygrade.

[Scrivener7]

3. If you watch the video, you will see the comments have nothing to do with how the tariffs are levied.

Their purpose is to show that Americans are paying hundreds or thousands for things that cost cents to make.

I think it's a good thing for people who pay for status to begin to realize how they are being ripped off in their attempts to impress their very dumb neighbors.

[MichMan]

4. Hardly some new revelation.

Not just Americans either. Some people just like a little indulgence every now and then. Not for me to judge

[Scrivener7]

5. That's nice.

[newdeal2]

6. In many cases it will be on the item's value aka price tag

Imagine being US customs trying to figure out the cost of an iPhone is to Apple vs. what they sell it for. Pretty difficult and error prone. Easier just to add 10% to whatever the price is.

[MichMan]

7. Apple already has to establish a declared value to customs for any shipments entering the country

This has always been the case. I'm sure that they have a whole department that handles those forms and declarations and have an established method for determining the value at that stage. If audited, Apple would need to show how they determined that value.

Customs isn't going to need to determine how much every item sells for at retailers. Selling price includes distribution costs, marketing, and retail mark ups, none of which are applicable to the value when the product is received at US customs. Those costs are not subject to a tariff.

[newdeal2]

8. Maybe

I’m going off my own (limited) experience.

For example, I recently purchased an item from the UK. The value they listed on the customs declaration form is exactly the price they list on their website.

Apple would likely list the price they sell the iPhone for (ex. $1000) not the actual cost of production.

[MichMan]

9. You purchased it for retail price as a final customer direct from the seller

Apple is shipping products intended for their own distribution chain. Not at all the same.

[newdeal2]

10. A lot of people buy their phone directly from Apple

And I don’t see much variation in list price among the major retailers unless they are discounting.

Getting back to the original post, I would think a tariff on an imported Hermes bag is applied to the list price of $30K, not the $1K it costs them to make.

[MichMan]

12. I wasn't aware that Apple on line purchases are shipped directly from the China factory

I would have thought they came from an Apple warehouse located here in the US. I have only had Androids, so no personal experience buying from Apple. Learn something new every day.

[Wonder Why]

11. Apple China Manufacturing company "sells" it to Apple America at a lower price and Apple America

sells it to you at a higher price.