Tariffs!

In this article, I would like to explain to you, fellow modelers, our reaction to the introduction of American tariffs. This is a truly historic issue that has been shaking the world since April, when the first wave of various tariffs was imposed on various countries around the world. That this event is not indifferent to customers was also shown by our two posts on Facebook, in which we announced the suspension of sending shipments to the USA due to the cancellation of the duty-free regime for individual shipments (de minimis) and the cessation of accepting shipments to the USA by European postal outlets, and also explained our future course of action. The reaction to them was stormy, the discussion long and tense. Something like this rarely happens on our Facebook.

In this article, I would like to explain to you,

fellow modelers, our reaction to the introduction

of American tariffs. This is a truly historic issue

that has been shaking the world since April,

when the first wave of various tariffs was

imposed on various countries around the world.

That this event is not indifferent to customers

was also shown by our two posts on Facebook,

in which we announced the suspension of sending

shipments to the USA due to the cancellation of

the duty-free regime for individual shipments

(de minimis) and the cessation of accepting

shipments to the USA by European postal

outlets, and also explained our future course

of action. The reaction to them was stormy,

the discussion long and tense. Something like

this rarely happens on our Facebook.

So it turns out that imposing customs tariffs

on all countries in the world creates a hell of

a mess. In August, the situation around customs

escalated with the increase in the US customs

tariff on European goods, and therefore also

on our products, to 15% from the previous rate

of 10%, introduced in April shortly after Donald

Trump took office as US President. At the end of

August, the situation escalated after European

post offices stopped accepting small shipments

for individual customers in the US as a result

of the abolition of the de minimis system.

This system allowed sending small shipments

worth up to 800 USD to addressees in the US

without collecting customs duties or any other

form of tax on these shipments. Over the past

few months, roughly since June, this system has

been undergoing somewhat chaotic development,

so to tell the truth, in August it was already quite

difficult to figure out what actually applies and

what will apply as of August 28th. I won't bore

you with the story of how it all unfolded, as it’s

really easy to get lost in it all, but the bottom

line, reminiscent of the cutting of the proverbial

Gordian knot, is actually a deliverance. There

will be no exceptions, there will be a 15% duty

on everything, end of discussion!

However, European post offices responded

to this by the aforementioned suspension of

accepting shipments to individual customers,

which is still ongoing. This was a fairly logical

step for post offices and other carriers to take,

because it can be expected that customers,

typically e-shop customers, would refuse

to accept shipments for which they would

suddenly have to pay an additional 15% of the

declared value of the shipment. Post offices

were therefore obviously afraid that they

would get stuck in a stalemate when the

addressee would reject the package and send

it back. Such customer behavior would mean

significant losses for post offices, and of course

for senders as well. The whole thing would be

on the verge of a postal apocalypse and a total

collapse of services. In addition, the post offices'

statements indicated that after the restoration

of services, the sender would pay customs

duties and customs clearance costs. The post

office would then mediate the payment of duties

to US Customs and Border Protection (USCBP),

payment of fees and subsequent smooth delivery

of the shipment to the customer. At the time of

writing, it is not clear whether this procedure

is an explicit request from the American side

and part of the decree abolishing the de minimis

system, or whether it is an initiative of European

post offices and other carriers, some of which

began offering this service as a standard part

of the shipment clearance at the same time.

This means transferring the obligation of paying

customs and duties to the exporter, which is

a completely offensive matter that concerns not

only individual senders, but also e-shops like

ours. At least at first glance, because no one

has the right to pay such high fees for nothing.

Neither the exporter nor the importer. Just to be

clear, the normal procedure is that the customs

duties are paid by the importer, the person who

imports the goods into the country applying

customs duties. Of course, the importer then

reflects the customs duties paid in his prices.

It is an additional cost that must be taken

into account. The idea that anyone anywhere

would pay an additional 15% tax and it wouldn't

affect the final price in the store is completely

delusional.

When we introduced the 10% tariff in April,

we acted to keep the retail price (MSRP) in

the US at the same level if at all possible and

not increase it. So we took a significant part

of the burden on ourselves and reduced the

selling price for our distributors. At the same

time, we abandoned the American system of

determining the retail price for distributors

and introduced the European method.

So that you understand what the difference is,

in America, a discount is set for the retailer from

the manufacturer's recommended retail price

excluding tax, which is officially called MSRP

(Manufacturer's Sugested Retail Price), and

then another discount is given to the distributor

from the resulting price. Generally, in the old

days, the distributor received a 55% discount

from the MSRP and that was his purchase price.

The old days ended sometime at the beginning

of the century with the arrival of the Chinese,

who started offering bigger discounts to grab

a bigger share of the market, and since then,

distributors have wanted more. In Europe, it is

usually the other way around, the manufacturer

sets the sales price, from which distributors in

different countries create their own Retail Price

according to the conditions in their market.

Another difference is that in the USA the retail

price on store shelves or in e-shops is listed

without tax, while in Europe the sticker price

includes the tax, which in our case, is the Value

Added Tax (VAT).

After the imposition of the 10% tariff, we

switched to the European pricing model and

began invoicing our American distributors

a fixed commercial price. At the same time,

we increased their margin, which means we

gave them a discount, and thus took on some of

the burden that our American distributors carry.

We left the recommended retail price, the MSRP,

the same. This operation allowed us to keep

the price stable on the American market and

not increase the price. So we did at least partly

what Donald Trump and his supporters imagined

would happen after the tariffs were imposed.

I am not sure what would have happened if the

tariffs had remained at 10%. We might have had

to increase the price because we had to give

up part of our margin to maintain the price

level from before the tariffs. But we don't have

to speculate about that anymore, because the

American administration solved this problem

for us when it raised the tariffs to 15%. After

this step, we had no choice but to increase the

price anyway. The price increase is on average

11%, so it is still not at the level of the 15% tariff,

but unfortunately we had no other choice.

Even so, after the introduction of the 15% tariff,

one of our four American distributors stopped

doing business with us, claiming that it was not

worth it for him to buy our goods under these

conditions.

When we left the US, it seemed that we had

the basic setup of the new tariff system ready

and now we can only wait to see how we,

our distributors and our customers will be

able to function in it. We did not know what the

changes to the de minimis system would look

like, but we knew that they would come and that

we would have to deal with them within the new

setup, meaning with a higher MSRP and a fixed

commercial (export) price. The way the new

delivery system setup was announced did not

surprise us much, we still believe that we will

be able to deal with it. However, the latest news

from the US says that the federal appeals court

found most of Trump's tariffs illegal. Honestly,

I am starting to get a little skeptical. We can

deal with some things, but chaos in which no

one really knows what is valid and what is not

is the worst thing that can happen to a country

and its trade. God bless America, and if He has

any spare capacity to do so, please let Him

remember us as well. Amen!

Vladimír Šulc

Tariffs!

INFO Eduard6

September 2025