There has been a boatload of analysis, commentary, criticism, and speculation about the effects the new tariffs may or may not be having on the U.S. economy. I thought I'd throw some actual data into the mix.
One of my retirement activities has been orchestrating the disposal of all the "stuff" I've accumulated during the past 7 decades. This is what might reasonably be termed a "first world problem."
Books went years ago; Agatha Christie and John Dickson Carr collections to eBay, various fiction, history, and science books to the library. Clothes to Goodwill. Rocks, minerals, crystals etc to neighborhood children. High school and collegiate memorabilia to classmates. Now I'm working on collectibles - stamps, comic books, baseball cards etc. For these latter items, eBay is an excellent venue.
This summer I noticed a significant change in how the eBay sales were processing, and I began to track numbers. For the first 125 lots I sold this year, these were the shipping destinations:
United States 72United Kingdom 26Australia/NZ 10Canada 8Others 9 (Estonia, Czech Repub, Sweden, Norway, Sri Lanka, Singapore)
The next 125 exhibited a markedly different pattern:
United States 114United Kingdom 5Canada 2Others 4
At the end of July, sales to foreign buyers evaporated. Instead of 40% going abroad, quite suddenly it was fewer than 10%. The reason became apparent when I looked at the invoices eBay was sending to the foreign buyers (example embedded at top). On a $35 purchase, but winning bidder was asked for $27 in shipping, tariffs, and taxes. The VAT had always been there [this lot going to the UK], but in previous years and at the start of this year I was able to ship small lots of stamps in regular mailing envelopes for USD $1.75 and my sales (typically less than $40) were not subject to tariffs. It was on July 30 of this year that the Trump-imposed tariffs were applied to "de minimus" items of modest monetary value. And I presume what the buyers of my items are seeing are reciprocal tariffs imposed by their home countries?
I have corresponded with some of my (former) buyers in Scotland and elsewhere. They are still interested in my material, but when they have to factor in the new "shipping" costs, my lots become unattractive.
I'm not suffering financially because for me this is discretionary hobby activity and basically a housecleaning operation, not a business. But I will bet you there are lots of small businesses (especially home businesses and side hustles) in the U.S. who are seeing a similar phenomenon be more impactful on their bottom line. I totally dismiss the claims of politicians that the U.S. economy is strong. The stock market does continue to approach new all-time highs, but that's because of an irrational enthusiasm regarding the "magnificent severn" stocks (AAPL, GOOGL, TSLA, NVDA, META, MSFT, AMZN). I will bet you a dollar to a dime that the weakness will show up not in the Dow or NASDAQ, but in the broad-based Russel 2000 index.
And this recent quote I find particularly baffling:
"The Federal Reserve is facing a difficult situation as the US economy shows strong growth and high productivity, yet hiring has significantly slowed... This divergence complicates decisions on whether to cool or boost the economy [via interest rates], with concerns about a potential jobless expansion despite investments in AI..."
Rising unemployment DESPITE AI? Correct me if I'm wrong (please. I'm no expert on such matters), but my understanding was that one of the major powers of AI was to improve efficiency by having the bots do the work formerly done by humans. I would think decreased unemployment would be expected, not a surprise.
Those who understand these sorts of things, please chime in with comments.
Related: A recent Bloomberg article is entitled Boomers Are Passing Down Fortunes — And Way, Way Too Much Stuff. "As the $90 trillion Great Wealth Transfer begins, millennials and Gen X aren’t just inheriting money. They’re being buried under an avalanche of baseball cards, fine china and collections of all sorts..." True that.
I commend your housecleaning. As a gen xer with very aging parents, and a son in law whose FIL is a hoarder, I'm dreading the cleaning that's coming.
ReplyDeleteI also harbor some deep resentments against my parents generation for giving me a hard time for the struggles that come from this economy. "I have all the things, you should be able to as well".
Aren't Trump's tariffs on goods coming INTO America? I didn't think the UK significantly changed tariffs on US goods, and haven't scrapped de minimis (yet), so not sure why there'd be a problem. Maybe it's psychological and people THINK your sales will be tariffed.
ReplyDeleteAbsolutely. I added a sentence to clarify that I think what the buyers are encountering are reciprocal tariffs in what amounts to a slowdown of the world economy.
DeleteAs a long (long) time lurker of your blog, an eBay seller, and a Canadian I'm going to put in, well, I suppose a nickel as pennies were eliminated in my Country in 2012. (Sorry, I don't necessarily understand these things but they have been on my mind a lately.)
ReplyDeleteA lot has to do with not wanting anything to do with the United States.
We're sick of you and with Trump and Hoekstra trashing us every day and we've had enough.
It's not personal. We also love you, some of you are friends or family, heck most of you are great. (You also have really great blogs.) Don't get us wrong, it's not easy because we recognize you are good people and we want to help you fight the good fight. This is very much in our nature which makes this decision the more difficult.
Politically we've had enough and are boycotting your Country in commerce, in trade, in vacations, in day trips, in products, in media, in entertainment and pretty much everywhere we see the words (or acronym) U.S.A.. (Canada is not alone in this.) Everyone checks the labels on their foods at the grocery store, if it says USA it goes back on the shelf. If the store is American we go on to the next. (Costco has largely gotten a pass in this as they sell some great Canadian products and do a good job of supporting their employees through pay, benefits and pensions - and they came out in support of their LGBTQ2S+ community in the States... so we applaud this with our patronage.) The USA Boycott is strong.
This is also partly because our own gov. is near the edge and it is showing our gov we want them to fight for our public services, public healthcare, postal system, businesses, industries, entertainment and arts. The last thing we want is further integration which, well, we need to keep our government clear on that. We love you but there is a clear border for a reason. (Don't tempt us, burning down your White House, this is very much a mood up here. We're also still here to help, despite our protestations, so if you'd like us only to burn down the ballroom...)
What is interesting is the reason your stating: increased postage/duty/tarrifs/taxes.
Canada's de minimis has been $20 for years, we're used to these things and largely can navigate where to find out what the duties will be, or not, on incoming products. As far as I'm aware there aren't many reciprocal tarrif's for most things coming in at a person-to-person basis for people selling antiques or stuff around the house.
So it is very curious about the cost going from, as you have said $1.75 to $27 because for stamps that's just not a thing with duty, taxes, or tariffs (as far as I'm aware, the Ebay Canada forums are fairly active around stamps and coins and I haven't heard this come up with buyers but I'll keep my ears open; it is definitely a thing with stamps and outbound post to the states). - Are you utilizing eBay's International Shipping program? That is the type of fee jump for postage we typically see when US sellers utilize this program.
We're seeing similar enthusiasm around AI from our government and corporations with much the same talk of GDP and economic growth, especially for extractive multi-nationals but on the ground it's a different story. Homelessness has gone up in our area by 25% in the past five years, in a town near us housing is now 97% owned by corporate REITS recently outed for utilizing AI rent price-fixing software. Something is going to give.
Sorry for the ranty long form. Also, we miss you.
Long rants are quite welcome from old-time readers. I think you know I totally support Canada and Carney in their resistance to the U.S. and Trump. I regularly listen to CBC "As It Happens" podcasts as well.
DeleteRe your question on the eBay events, the invoice you see embedded at the top was generated by eBay, not me. I tried to invoice the buyer for USD $1.75 shipping, but eBay responded with "you are no longer allowed to invoice foreign purchasers" or words to that effect. I have indeed sent things using the International Shipping program. My last two foreign buyers I don't even know what countries they are in; I send stuff to Chicago and eBay forwards it on, adding those enormous fees in the process. And a couple buyers have told me that once International Shipping gets involved, the processing time from winning the lot to receiving the item is hugely longer. I don't know who is to blame. It's frustrating as hell because I have lots of stuff still to dump on other people.