In the beginning of March Julia Horowitz (Associate Writer for CNNMoney) wrote an article about what President Trump’s steep steel and aluminum tariffs means and wondering how the rest of the world would respond?
Well? The European Union fought back on June 21st against the Trump administration’s tariffs, slapping penalties on an array of American products that target the president’s political base, like bourbon, motorcycles and orange juice. Cross border ecommerce for US companies are affected as well and the first custom checks are already taking place.
So, not just for products shipped in bulk containers via Seafreight but also cross border direct B-C ecommerce shipments containing fashion, cosmetics, skincare products and rice products like quinoa. The standard tax exemptions are not applicable anymore for these products and are taxed with an additional 25% of import duties.
What does this mean for you as a US retailer selling and shipping into Europe?
If a European customer orders something in your web shop and you don’t have an all-inclusive checkout with the right percentage absorbed for duties and taxes you will lose over 25% on your margin when you sell DDP (delivery duty paid) into Europe. If you are shipping DAP (delivery at place) you will start losing customers who will not return when they are surprised with unexpected, high and additional taxes leaving them with a very poor impression of your customer service.
The European counterattack
A $3.2 billion attack on goods as a response to the administration’s measures on steel and aluminum imports, adds another front to a trade war that has engulfed allies and adversaries around the world.
The risk of escalation is high since Mr. Trump has promised even more tariffs. Taking aim at German car manufacturers, the president has started an investigation into automobile imports to determine whether they pose a national security concern, the same justification used for his metal tariffs.
Are your cross border products already taxable from the first cent?
In our blog of February 19th I already spoke about the new and upcoming European ecommerce rules and how European customs and tax authorities demand a unique identification number for each commercial item. Do you want to know if your business is affected as of from today and are you losing European customers already? Download the latest list now and make sure you stay ahead of the curve and in business here in Europe.
If you want to know more just send an email to firstname.lastname@example.org and we are more than happy to schedule a call how we can help you solve these specific challenges in a compliant way.