Australia Post suspends shipping to USA

[peter.coombe]

I just got an email from Australia Post announcing that they are "temporarily" suspending shipments to the USA until further notice. I suspect the "temporary" might end up being for a longish time. Once shipments resume, we will need to register with a third party provider (Zonos) and pay the USA import tariff before they will accept the parcel. This is part of dictator Trump's tariff war to make foreign countries pay. Personally, I will be charging the customer the tariff as part of the shipping cost and cursing every time I have to go through the ever-increasing amount of paperwork necessary to get instruments out of Australia. It used to be easy. I hate this and am starting to wonder if it really is worth exporting any more. Nobody pays me for the time wasted on all this BS.

[kiwigeo]

No surprises Pete......Trump doesn't care about people who actually earn their income by honest means. Maybe if you send Trump an email praising his accomplishments on the golf course he might grant you a special dispensation from tariffs.

[Richard]

Well over half my business is in the US and up until today I've shipped hundreds of guitars to the US via Auspost/USPS. Neither my business nor my customers have ever paid a cent in customs or taxes despite every shipment being declared at its full value, well above the de minimis threshold of 800USD. It's been a glaring loophole that I expected would be closed sooner or later. US companies have had to register for GST for years if they're doing more than $75k/yr in sales to Australia so although I'd prefer not to have the added costs and admin, from a pragmatic perspective it really is just levelling the playing field.

Execution leaves a lot to be desired and it's obviously chaos right now as Australia Post scramble to comply, but at least there's huge financial incentives for them to get this resolved ASAP. In the meantime there's DHL/FedEx/UPS for anything urgent.

[peter.coombe]

Well there has been an Australia/USA free trade agreement (FTA) in place for more than 20 years so there were no tariffs on anything that conformed to the rules of the FTA, so it is not surprising your customers have not had to pay anything. The FTA was working. During that time I have sent many mandolins to the USA and only once did they ask for an import tariff payment. I did a country of origin letter that basically stated that the mandolin conformed to the rules of the FTA, the customer sent that to DHL, and the customer did not have to pay the tariff. There was never a "loophole" until Trump's tariff war where he effectively has torn up the FTA, as well as every other FTA, even those he negotiated himself in his first term. Note that the GST is not a tariff. although Trump seems to think it is. The USA also has the equivalent of a GST, but I believe that is administered on a state by state basis so is different to what we have. Not sure how the couriers are handling this, they would have the same problem.

[kiwigeo]

Trump doesn't understand the difference between a sales tax and a tariff.

Pre Trumpanonics Americans buying goods from Australia didn't pay 10% GST on the items. Australians buying goods from US were usually charged 10% GST. Post Trumpanomics Americans buying goods from Australia now pay a 10% tariff. A good example of Trump shooting himself in the foot.

Trump is good at shooting himself in the foot. He's currently trying to ban postal voting.....when doing so will cost him votes. People in rural areas tend to be Trump voters....postal votes make voting much easier in rural areas.

[Richard]

There was never a "loophole" until Trump's tariff war where he effectively has torn up the FTA

The loophole was that the de minimis threshold was not enforced by USPS and as such compliance costs for shipping to the US were effectively nil unlike almost every other developed country in the world.

I'll leave the wider economic/political debate for others, but the most reductive version of the reality we're now in is that Australia requires that US companies collect a 10% GST on their behalf, and now the US is collecting a reciprocal 10% tariff from Australian companies. Different mechanisms with the same effective outcome. I'd obviously prefer both numbers to be 0, but it was always a matter of time regardless of the FTA.

[kiwigeo]

the most reductive version of the reality we're now in is that Australia requires that US companies collect a 10% GST on their behalf, and now the US is collecting a reciprocal 10% tariff from Australian companies. Different mechanisms with the same effective outcome.

Yes..but the absurd aspect is that US buyers who were previously not paying any tariff on Australian made goods are now paying 10% extra for their goods. The extra money isn't coming from foreign companies......in the end it comes out of the pockets of US citizens. This is the part that Trump doesn't understand.

[peter.coombe]

The loophole was that the de minimis threshold was not enforced by USPS and as such compliance costs for shipping to the US were effectively nil unlike almost every other developed country in the world.

Yes, but there was a loophole only after the US 10% tariff was implemented. There was no tariff under the FTA so there cannot be any loophole. The whole idea of the FTA was tariff free for all goods that satisfy the rules of the FTA and it applies in both directions. The USA does have equivalent GST, but it is administered differently from us. Does any other country require the exporter to pay the import tariff of the receiving country? Not as far as I am aware. Yes, we do require the larger US exporters to pay the GST and they charge Australian customers the GST, but the GST is not a tariff. I always thought forcing foreign exporters to pay the GST was a bad idea and now we pay the price. GST and tariffs should be the importer's responsibility to sort out. Trade is what makes countries wealthy, yet all these barriers are being erected. The world is going mad.

[kiwigeo]

..The world is going mad.

Welcome to Trumpanomics.

[peter.coombe]

Quote -

"An Executive Order by US President Donald Trump, signed on 30 July, extends a series of de minimis suspensions that Trump said were made to address “a national emergency regarding the unusual and extraordinary threat to the safety and security of Americans.”

How ridiculous is that.

[kiwigeo]

"An Executive Order by US President Donald Trump, signed on 30 July, extends a series of de minimis suspensions that Trump said were made to address “a national emergency regarding the unusual and extraordinary threat to the safety and security of Americans.”

Pete mate...your mandolins are an unusual and extra threat to the safety and security of Americans.

Maybe Trump had a bad experience with a mandolin as a child?

[peter.coombe]

Pete mate...your mandolins are an unusual and extra threat to the safety and security of Americans.

Ha ha ha ha! You made my day.