Trade Wars and Tariffs
With prior trade war tariffs on Chinese imports, Ursa Minor absorbed some of these costs but eventually included them when our prices changed on May 1, 2019. While we do not import directly from China anything of significance, many of our hardware and raw material suppliers do and have passed tariffs on to us.
There is a new round of uncertainty about a proposed escalating tariff on imports from Mexico that may start in June. As a small operation, we can only roll with this change in the global trade system if it is implemented, and have no expectation of bail out or special exemptions from Washington. We hope that any planned change from the current NAFTA agreement is reviewed and implemented with consideration for all businesses impacted, since finding an alternate source is not quick or easy even if possible.
Our approach for the proposed tariff on Mexican goods will be the same as when California changes the sales tax rate. If the State changes the sales tax rate, or the county or city adds additional sales taxes, we have to charge the new rate as well, but we do not change the price of the product. Much like a sales tax, tariffs are paid directly to the US Government, and do not impact our operations by adding any value with faster or easier trade flow that might offset the cost.
If tariffs are imposed, Ursa Minor will to add a line to all invoices showing the specific tariff charge added to the order, rather than changing our prices every month. The range for this tariff for our products is estimated to be between $70 and $100 based on feedback from our customs broker, but could increase by fall.