Chinese Trade Tariff impacts on collectable supplies
We have had a lot of questions about the impact of Chinese trade tariffs on collectable supplies. The good news is that of the over 50 brands we stock; only 4 have production made in China. The rest are primarily US or European made. We have stayed in touch with these four manufacturers since early summer 2018 to understand their planned response to the tariffs. The first rounds of tariffs on washing machines, steel and aluminum and then $50 billion of assorted Chinese imports had little impact on the coin/stamp supply industry. But, the expansion last fall of the 10% tariff to an additional $200 billion of Chinese imports did include some items in our industry. These initial 10% tariffs were for the most part absorbed by the manufacturers to extent their products were impacted (and in many cases they were not). The 10% rate was scheduled to increase to 25% on January 1. This was postponed to March 1 per an agreement between Trump and Xi in late 2018. Recent news reports are somewhat positive about a trade deal between the two countries that will avoid the increase to 25% on March 1. In any event, all of the suppliers have been adamant that they would not be able to absorb 25% tariffs even temporarily. In our discussions with these suppliers, here is how they plan to handle the issue:
Whitman — Whitman plans to increase prices on their Chinese made products by about 25% no matter what happens. Per Whitman, it has been several years since they increased prices and cost pressures of many types (including the tariffs) are necessitating a price increase. Prices on their Chinese made products are set to go up and will stay at these new levels even if the trade conflict is resolved and tariffs go away. Not impacted are publishing (books), tubes, Cowens 2×2 flips, Cowens pages, clear snap lock holders and other US made products. We will adjust our MSRP on these products shortly after Whitman does and the wholesale discount will remain the same but be based on the new MSRP. See supplier update section below for more details on Whitman’s price increase.
Lighthouse — If tariffs go to 25%, Lighthouse plans to address the issue by reducing the distributor discount on impacted products. Their catalogs go to press during the summer for a November release and that is the only time they plan to adjust MSRP. So, their immediate and short term response would be to leave MSRP the same and adjust the price they charge us for the impacted products. If the dispute is resolved and the tariffs go away, they would return to the normal discount. If it appears the tariffs would remain in place long term, they would adjust MSRP at the next catalog printing and then return to the normal discount when those price levels go into effect (November). If Lighthouse reduces the discount to us, we will in turn reduce to discount to our customers. When they adjust MSRP and return to the standard discount, we will do the same.
BCW — BCW plans to increase prices on impacted products at the time of impact. They say they will endeavor to give at least 30 days notice of the price increase but reserve the option to increase prices on shorter notice if necessary. Prices would be reduced again when tariffs are reduced or go away. As BCW adjusts their MSRP up or down, we will as well but anticipate maintaining the same wholesale discount.
Transline/Guardhouse — Transline Guardhouse branded products are almost all made in China. They plan to increase prices on impacted products as the impact occurs without prior notice. Prices would be reduced again when tariffs are reduced or go away. As Guardhouse adjusts their MSRP up or down, we will as well but anticipate maintaining the same wholesale discount.
We have and will update our prices as we get in new orders and our prices are affected.
Thanks you for being loyal customers
Kevin , Michelle and Bayou Bob
