US To Raise De Minimis Level for Import Taxes

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3/9/2016 8:04 AM

Back in February of this year, US President Barack Obama signed a bill that aims to simplify import and export of goods to and from the US. Perhaps the most interesting issue for us in the bicycle industry is the increase in the de minimis value for shipments subjected to import taxes and duties from $200 to $800. Concretely, this means that as of tomorrow (March 10) you can now order up to $800 worth of goods (combined value) from the major overseas online retailers (Chain Reaction Cycles, for example), and not have to pay import taxes on your shipment. This should also streamline the import process which means you'll be less likely to have to wait while your parcel is stuck in customs somewhere.

US retailers will argue that this now makes it harder for them to compete, since they still have to pay US sales tax on their sales, while bike shops will no doubt be left to stare an even bigger threat to their accessories sales in the face.

What do you think? Long overdue change for the better, or something more sinister?

Source: American Shipper



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3/9/2016 8:25 AM

How can this be a good thinges for the US?

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3/9/2016 8:34 AM

Heath Sherratt wrote:

How can this be a good thinges for the US?

Because people in the US can now order up to $800 of goods from big overseas retailers and not pay import taxes when the shipment enters the US. Before, the limit was $200...

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3/9/2016 9:32 AM

Give and take in the US. A strong US dollar means we import more because our money goes further internationally. Over time, this can cost jobs or cause a shrinkage of certain industries. When the dollar goes back down, more purchases will be made domestically.

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3/9/2016 9:34 AM

In Europe, for decades we can order abroad regardless the value without import taxes.
And guess what... LBS still exist. And will exist providing that there are people that don't know/don't want to know how to bleed a brake, change a chain... even clean a bike! And these services you cannot order online!
If instead of 10 LBS, only 5 exist, well... that's life (or economy)!
Not even 5% of what I spend each year related with riding is spent in my country, and all the LBS I know still exist! I even think I see more and more opening...
Alltricks, probikeshop, bike-discount.de are only a few examples of online retailers I use.

Even my full DH bike came from Andorra for way less than chain reaction cycles was selling it (by the way, chain reaction cycles prices are nothing special).

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3/9/2016 11:16 AM

Awesome! means i can buy more things at a cheaper price to stock my bike shop than i can through my own distributors! :-| Another reason why I've downsized my shop & I'm focusing only on repair work, entry level bikes, parts & accessories... & custom orders

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Jeremiah Dylan Dean
Ryno Power www.rynopower.com

3/9/2016 12:18 PM

it means:

People who work at companies, shops, or buy from shops will decide to get different gigs because their deals aren't as good and things aren't as profitable.

People who can work on their own bikes will be stoked for cheap parts but won't have a shop down the street to buy tubes, so they're order those too and spend less time riding waiting to fix a flat.

Those people down the street who sell bikes will have fewer customers to sell to and will go out of business one by one.

Those shop employees and key ambassadors in the area won't be around as much to build and maintain trails or lead group rides.

Land access will ween away and beginners will have no one to ride with.

People continue to lose interest in cycling and we all make our passion a past time.

The parts you paid less for will be worth even less because there won't be any demand for them used, or for their new versions.

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3/9/2016 12:50 PM

I think good shops, with great service, and community involvement will do just fine.

This is not much different then the threat of bike companies selling customer direct. If the shop offers a convenience and service you can't get online, they will still have business. They however can't just rely on having accounts with suppliers anymore for guaranteed local business. The marketplace is more international everyday.

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3/9/2016 12:52 PM

Heath Sherratt wrote:

How can this be a good thinges for the US?

It has been the conclusion of every single modern economist, from Adam Smith to Paul Krugman to Milton Friedman, that free trade and the reduction of tariffs makes a country richer, and makes the individuals in that country richer. The gains from trade fall on the poorest the most; the least well off benefit the most from free trade and reducing and/or eliminating tariffs.

Hundreds of studies, literature reviews, and meta-studies all point to the harm that tariffs inflict on human well-being and the gains to be had from trade. If you care about the poor, if you care about the middle class, if you care about the wealth of your nation, if you care about reducing child poverty, malnutrition, and premature death; in short if you care about reducing human suffering and misery you care about free trade. Free trade, more than any other single thing in the last 200 years, has lifted more people out of poverty and death.

Saying that lifting a tariff will be bad for America is the same as walking outside, looking up at the noonday sun, shaking your fist at it and denying that its there.

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3/9/2016 1:32 PM

Just like how manufacturers exploit the global marketplace for labor, consumers exploit the global marketplace for the best price via the web. No shock at all that "business" wants to cry when they have their cake but can't eat it, too.

The only people who will always continue to lose are the third-world workers exploited by manufacturers.

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3/9/2016 1:41 PM

Heath Sherratt wrote:

How can this be a good thinges for the US?

hamncheez2003 wrote:

It has been the conclusion of every single modern economist, from Adam Smith to Paul Krugman to Milton Friedman, that free trade and the reduction of tariffs makes a country richer, and makes the individuals in that country richer. The gains from trade fall on the poorest the most; the least well off benefit the most from free trade and reducing and/or eliminating tariffs.

Hundreds of studies, literature reviews, and meta-studies all point to the harm that tariffs inflict on human well-being and the gains to be had from trade. If you care about the poor, if you care about the middle class, if you care about the wealth of your nation, if you care about reducing child poverty, malnutrition, and premature death; in short if you care about reducing human suffering and misery you care about free trade. Free trade, more than any other single thing in the last 200 years, has lifted more people out of poverty and death.

Saying that lifting a tariff will be bad for America is the same as walking outside, looking up at the noonday sun, shaking your fist at it and denying that its there.

Crazy talk. You've clearly never worked in a garment factory in Bangladesh or Cambodia, or a tech business in China. Easy to preach the "benefits" of free trade and globalization when you're born with the US-of-A silver spoon in your mouth.

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3/9/2016 5:14 PM

Heath Sherratt wrote:

How can this be a good thinges for the US?

hamncheez2003 wrote:

It has been the conclusion of every single modern economist, from Adam Smith to Paul Krugman to Milton Friedman, that free trade and the reduction of tariffs makes a country richer, and makes the individuals in that country richer. The gains from trade fall on the poorest the most; the least well off benefit the most from free trade and reducing and/or eliminating tariffs.

Hundreds of studies, literature reviews, and meta-studies all point to the harm that tariffs inflict on human well-being and the gains to be had from trade. If you care about the poor, if you care about the middle class, if you care about the wealth of your nation, if you care about reducing child poverty, malnutrition, and premature death; in short if you care about reducing human suffering and misery you care about free trade. Free trade, more than any other single thing in the last 200 years, has lifted more people out of poverty and death.

Saying that lifting a tariff will be bad for America is the same as walking outside, looking up at the noonday sun, shaking your fist at it and denying that its there.

chrisingrassia wrote:

Crazy talk. You've clearly never worked in a garment factory in Bangladesh or Cambodia, or a tech business in China. Easy to preach the "benefits" of free trade and globalization when you're born with the US-of-A silver spoon in your mouth.

Chrisingrassia I am Vietnamese, and I am very familiar with the garment industry in Southeast Asia. Do you know what the number one complaint at the Nike factory in Vietnam is? That they need to open and expand more so that workers can get jobs for their families. The facts are that sweat shops are BETTER than the alternative, which is subsistence farming. It is a huge social boon to be working at any job thats not out in the sun. There are lines and waiting lists years long to get a job at these sweatshops. As bad as these jobs are, they are better than the alternative. You cannot jump from dirt poor to as rich as the West; you have to transition there, and sweatshops, as bad as they are, are an important part of economic growth.

I know that there is compulsory work(slavery) at many sweatshops in Asia. I realize that this is bad, but thats not free trade; thats Tyranny. However, a group of Economists followed what happened in Bangladesh when a Rebook factory was shut down. Western protesters pressured Rebook to stop buying from a sweatshop that used child slave labor. When the sweatshop shut down, one third of the children died from disease, malnutrition, or starvation. Most of the rest ended up as child prostitutes, working in sewage pipes where their small size was an advantage, etc. Not one of them enrolled in school.

There are no good answers sometimes, but rather the lesser of two evils. Globalization and free trade will help 3rd world countries become rich faster. This is not just my opinion, it is the conclusion of 99% of all economic research ever done on the subject. I very, very munch know what I am talking about, but you very clearly don't.

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3/9/2016 8:19 PM

hamncheez2003 wrote:

It has been the conclusion of every single modern economist, from Adam Smith to Paul Krugman to Milton Friedman, that free trade and the reduction of tariffs makes a country richer, and makes the individuals in that country richer. The gains from trade fall on the poorest the most; the least well off benefit the most from free trade and reducing and/or eliminating tariffs.

Hundreds of studies, literature reviews, and meta-studies all point to the harm that tariffs inflict on human well-being and the gains to be had from trade. If you care about the poor, if you care about the middle class, if you care about the wealth of your nation, if you care about reducing child poverty, malnutrition, and premature death; in short if you care about reducing human suffering and misery you care about free trade. Free trade, more than any other single thing in the last 200 years, has lifted more people out of poverty and death.

Saying that lifting a tariff will be bad for America is the same as walking outside, looking up at the noonday sun, shaking your fist at it and denying that its there.

chrisingrassia wrote:

Crazy talk. You've clearly never worked in a garment factory in Bangladesh or Cambodia, or a tech business in China. Easy to preach the "benefits" of free trade and globalization when you're born with the US-of-A silver spoon in your mouth.

hamncheez2003 wrote:

Chrisingrassia I am Vietnamese, and I am very familiar with the garment industry in Southeast Asia. Do you know what the number one complaint at the Nike factory in Vietnam is? That they need to open and expand more so that workers can get jobs for their families. The facts are that sweat shops are BETTER than the alternative, which is subsistence farming. It is a huge social boon to be working at any job thats not out in the sun. There are lines and waiting lists years long to get a job at these sweatshops. As bad as these jobs are, they are better than the alternative. You cannot jump from dirt poor to as rich as the West; you have to transition there, and sweatshops, as bad as they are, are an important part of economic growth.

I know that there is compulsory work(slavery) at many sweatshops in Asia. I realize that this is bad, but thats not free trade; thats Tyranny. However, a group of Economists followed what happened in Bangladesh when a Rebook factory was shut down. Western protesters pressured Rebook to stop buying from a sweatshop that used child slave labor. When the sweatshop shut down, one third of the children died from disease, malnutrition, or starvation. Most of the rest ended up as child prostitutes, working in sewage pipes where their small size was an advantage, etc. Not one of them enrolled in school.

There are no good answers sometimes, but rather the lesser of two evils. Globalization and free trade will help 3rd world countries become rich faster. This is not just my opinion, it is the conclusion of 99% of all economic research ever done on the subject. I very, very munch know what I am talking about, but you very clearly don't.

Bravo. Seriously, that's PhD level discussion right there. I could not add anything further to this discussion that would compare to your comments.

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3/9/2016 10:53 PM

hamncheez2003 wrote:

Chrisingrassia I am Vietnamese, and I am very familiar with the garment industry in Southeast Asia. Do you know what the number one complaint at the Nike factory in Vietnam is? That they need to open and expand more so that workers can get jobs for their families. The facts are that sweat shops are BETTER than the alternative, which is subsistence farming. It is a huge social boon to be working at any job thats not out in the sun. There are lines and waiting lists years long to get a job at these sweatshops. As bad as these jobs are, they are better than the alternative. You cannot jump from dirt poor to as rich as the West; you have to transition there, and sweatshops, as bad as they are, are an important part of economic growth.

I know that there is compulsory work(slavery) at many sweatshops in Asia. I realize that this is bad, but thats not free trade; thats Tyranny. However, a group of Economists followed what happened in Bangladesh when a Rebook factory was shut down. Western protesters pressured Rebook to stop buying from a sweatshop that used child slave labor. When the sweatshop shut down, one third of the children died from disease, malnutrition, or starvation. Most of the rest ended up as child prostitutes, working in sewage pipes where their small size was an advantage, etc. Not one of them enrolled in school.

There are no good answers sometimes, but rather the lesser of two evils. Globalization and free trade will help 3rd world countries become rich faster. This is not just my opinion, it is the conclusion of 99% of all economic research ever done on the subject. I very, very munch know what I am talking about, but you very clearly don't.

I'm all ears to this anecdote if you can produce any sources to support this information? I've not ever seen a single documentary, read a single article, or read not even one book that supports what you just said. Not one.


As to OP - local bike shops have a hard time staying afloat. In my own experience, I've gone to one shop down the street and every single time I went in there, the owner was a complete tool. Seriously, condescending d*uchebag when I wanted to buy a Blur LTc, a jerk when I paid him to do a wheelbuild, a jerk when I went in to buy some Stans valves. Good riddance.

I also went to a Mike's Bikes for one of their free clinics to learn bike repair while riding. The tech made me feel like a nuisance, an inconvenience. Good riddance.

I'm all for online shopping. It has always done wonders as long as you don't need anything last minute. It requires consumers to think pro-actively. I'd be curious to

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3/10/2016 4:48 AM

ozzbaldo wrote:

In Europe, for decades we can order abroad regardless the value without import taxes.
And guess what... LBS still exist. And will exist providing that there are people that don't know/don't want to know how to bleed a brake, change a chain... even clean a bike! And these services you cannot order online!
If instead of 10 LBS, only 5 exist, well... that's life (or economy)!
Not even 5% of what I spend each year related with riding is spent in my country, and all the LBS I know still exist! I even think I see more and more opening...
Alltricks, probikeshop, bike-discount.de are only a few examples of online retailers I use.

Even my full DH bike came from Andorra for way less than chain reaction cycles was selling it (by the way, chain reaction cycles prices are nothing special).

Woot, you seriously have no import taxes in Portugal? I'm from Slovenia and we have to pay VAT for importing anything above 22€ and additional import tax if the value of the goods exceeds 150€.

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3/10/2016 6:24 AM

ozzbaldo wrote:

In Europe, for decades we can order abroad regardless the value without import taxes.
And guess what... LBS still exist. And will exist providing that there are people that don't know/don't want to know how to bleed a brake, change a chain... even clean a bike! And these services you cannot order online!
If instead of 10 LBS, only 5 exist, well... that's life (or economy)!
Not even 5% of what I spend each year related with riding is spent in my country, and all the LBS I know still exist! I even think I see more and more opening...
Alltricks, probikeshop, bike-discount.de are only a few examples of online retailers I use.

Even my full DH bike came from Andorra for way less than chain reaction cycles was selling it (by the way, chain reaction cycles prices are nothing special).

Karabuka wrote:

Woot, you seriously have no import taxes in Portugal? I'm from Slovenia and we have to pay VAT for importing anything above 22€ and additional import tax if the value of the goods exceeds 150€.

We don't pay import taxes for anything bought inside the European union. And in most of cases, when we order outside EU (example USA and China) if the package is small, they let it pass without charge anything.

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3/10/2016 8:32 AM

chrisingrassia wrote:

Crazy talk. You've clearly never worked in a garment factory in Bangladesh or Cambodia, or a tech business in China. Easy to preach the "benefits" of free trade and globalization when you're born with the US-of-A silver spoon in your mouth.

hamncheez2003 wrote:

Chrisingrassia I am Vietnamese, and I am very familiar with the garment industry in Southeast Asia. Do you know what the number one complaint at the Nike factory in Vietnam is? That they need to open and expand more so that workers can get jobs for their families. The facts are that sweat shops are BETTER than the alternative, which is subsistence farming. It is a huge social boon to be working at any job thats not out in the sun. There are lines and waiting lists years long to get a job at these sweatshops. As bad as these jobs are, they are better than the alternative. You cannot jump from dirt poor to as rich as the West; you have to transition there, and sweatshops, as bad as they are, are an important part of economic growth.

I know that there is compulsory work(slavery) at many sweatshops in Asia. I realize that this is bad, but thats not free trade; thats Tyranny. However, a group of Economists followed what happened in Bangladesh when a Rebook factory was shut down. Western protesters pressured Rebook to stop buying from a sweatshop that used child slave labor. When the sweatshop shut down, one third of the children died from disease, malnutrition, or starvation. Most of the rest ended up as child prostitutes, working in sewage pipes where their small size was an advantage, etc. Not one of them enrolled in school.

There are no good answers sometimes, but rather the lesser of two evils. Globalization and free trade will help 3rd world countries become rich faster. This is not just my opinion, it is the conclusion of 99% of all economic research ever done on the subject. I very, very munch know what I am talking about, but you very clearly don't.

chrisingrassia wrote:

I'm all ears to this anecdote if you can produce any sources to support this information? I've not ever seen a single documentary, read a single article, or read not even one book that supports what you just said. Not one.


As to OP - local bike shops have a hard time staying afloat. In my own experience, I've gone to one shop down the street and every single time I went in there, the owner was a complete tool. Seriously, condescending d*uchebag when I wanted to buy a Blur LTc, a jerk when I paid him to do a wheelbuild, a jerk when I went in to buy some Stans valves. Good riddance.

I also went to a Mike's Bikes for one of their free clinics to learn bike repair while riding. The tech made me feel like a nuisance, an inconvenience. Good riddance.

I'm all for online shopping. It has always done wonders as long as you don't need anything last minute. It requires consumers to think pro-actively. I'd be curious to

Paul Krugman won his nobel prize for research about the benefits of free trade, especially to the third world.

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2008/krugman-facts.html

Milton Friedman, also a Nobel Prize winning economist, who is on the opposite side of the political spectrum as Krugman:

"Tariffs and other restrictions on international trade, high tax burdens and a complex and inequitable tax structure, regulatory commissions government price and wage fixing, and a host of other measures give individuals an incentive to misuse and misdirect resources, and distort the investment of new savings. What we urgently need, for both economic stability and growth, is a reduction of government intervention, not an increase"

Gregory Mankiw, Economist at Harvard, 21st Chairman of the board of economic advisers:

"Economists are famous for disagreeing with one another... But economists reach near unanimity on some topics, including international trade."

Gregory Mankiw again, joined by 13 other economists who have led the President’s Council of Economic Advisers,

"“International trade is fundamentally good for the U.S. economy, beneficial to American families over time, and consonant with our domestic priorities."

Here is an article that explains the benefits of sweatshops:

http://www.forbes.com/sites/realspin/2013/05/02/sweatshops-in-bangladesh-improve-the-lives-of-their-workers-and-boost-growth/#17dd1e0c3c34

You have to think, if sweatshops are so bad, horrible, and exploitative, why do people line up, wait fight, lie, cheat, and steal to get one of these jobs? There hasn't been a single industrialized, wealthy country, ours included, that did not have sweatshops when they were transitioning from an agrarian society into a literate, rich, wealth, industrial society. It is a crucial step that has lifted billions of God's children out of poverty, misery and death.

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3/10/2016 10:59 AM

If Forbes is your source then we will have to agree to disagree. There's a reason civilized, rational, moral nations don't allow sweatshops and/or their people to be exploited. There's a reason these countries have social safety nets, minimum wages, standard working hours, fair labor standards, child labor laws and environmental/social protections. Won't be reading that from Forbes anytime soon.

Cheers!!

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