Worried about Trump Tariffs? Don't know what's going to happen? If the tariffs hit, where can you print without losing your shirt?
Our Sales Director Paul Reber breaks down some of these topics and provides solutions in this Book Tariffs Frequently Asked Questions.
What book tariffs? And what do they currently cover?
On May 10th 2019 the Trump Tariffs on Chinese imports raised from 10% to 25% on stationary – including the production of journals, albums, loose book jackets, loose mailing cartons, diaries, planners, and calendars per HS Codes: 4820.10.20, 4820.10.40, 4820.90.00 4820.20.00 and 4820.50.00
This tariff remains in effect today and is unlikely to reduce or be lifted as negotiations continue to stall.
A public hearing for stage 4 of the tariff which would impose tariffs on all books manufactured in China, will be subject to a public hearing on June 17, 2019, likely going into effect by the end of the month.
The latest trade information can be viewed here: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/ustr-finalizes-tariffs-200
And which items are subject to current tax (pages 104/105 of 194): https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List-09.17.18.pdf
And which items will go into effect if stage 4 passes (see page 43 of 113): https://www.strtrade.com/assets/htmldocuments/USTR%20301%20Proposed%20List%204.pdf
As a publisher, author, artist.... does it affect me?
The short answer is yes.
If you print journals, calendars, albums, or planners, then the current tariff directly affects you. However, if you only print books, then you are exempt from the tax...for now. The tariff will still be felt by the industry as a whole.
Recently, Hachette Book Group CEO Michael Pietsch commented on the latest tariff threat by saying that "Following so soon after the major shortages last fall that resulted from domestic print-capacity reductions, these tariffs will bring further disruptions in one of the most important U.S. industries."
Few publishers who print books will be able to escape the tariff entirely. The US capacity is full, customs are clogging, and prices continue to rise as demand increases.
Therefore, this is the perfect time to prepare or find an alternative solution.
What about the proposed 301 Stage 4 Tariff?
Books have long been exempt from dutiable tax. It will be one of the largest industries affected by this new imposition. As publishers scramble to avoid additional tax, North American printing plants are swelling past capacity. With the flood of Chinese production already shifting to domestic plants, combined with an already high US print demand, plants are now booked through the month of October. Publishers late to shift production are either missing deadlines or losing 25% on importation.
Hillel Italie of Associated Press writes “One of the largest distributors, Baker & Taylor, is ending its retail business, forcing some stores to find new ways to keep books in stock. And publishers again face a potential shortage of printing capacity that resulted in two future Pulitzer Prize winners, David Blight's biography Frederick Douglass and Richard Powers' novel The Overstory being among numerous releases unavailable for extended stretches late last year.”
If the new tariff passes, you should expect to pay more for importing or wait longer for USA delivery. As a result, the industry will change overnight.
Where CAN I get my books printed? I want to avoid the tariff, but can’t rely on North American printing and scheduling…
Cue South Korea.
Already absorbing a large amount of Chinese industry due to current duties, South Korea, long rivaling China in terms of quality and pricing is ready to take on the shift of Chinese book production.
We've printed in South Korea for over a decade. Our Korean printing partners have developed efficient production at the highest quality, offering coil bound, smythe sewn, Wire-O, PUR, hard and soft cover, 4+ color and more – Digital, Web, or Sheet-fed! Production time is faster than what is offered in USA, Canada, and China. And there is zero threat of tariffs or customs delays.
We have already partnered with publishers like Fantagraphics, NoStarch Press, Texas A&M University Press, Gingko Press, and many more to shift production to Korea. They have been able to achieve the same, consistent quality at a competitive, stable price.
Read our latest take about South Korea book printing: http://fourcolour.com/print-books-in-korea/
What about reprints? Limited Editions? Materials that are unique to China?
As a custom printer, we are used to thinking outside the box. As a result, most of our jobs are tailor made to provide each customer the correct materials and service to complete the job expertly.
Korean materials are similar in a lot of ways to Chinese, but they are not the same. However, we partner with many companies like Ecological Fibers that have Asian sourcing options available in Korea. Oftentimes offering the same product as the Chinese, for the exact same price. Optionally we can import Chinese materials into Korea for a reprint or specific need. As an example, we recently imported Chinese binding cloth for a specific job directly into South Korea for production.
In other words, there are very few limitations to printing in South Korea.
Can't you find any loopholes??
Unfortunately, the Chinese tariffs are airtight. We have inquired about shifting books into Korea that are first produced in China and then shipped into a new customs port. But even in those cases the country of origin will remain China. As a result, they will be under the tariffs. Partial prints will be affected in this way as well (for instance, printing half in China/half in USA). Consequently, if any of the book prints in China, it will be subject to tax on its final print invoice.
This tariff will be a burden shared by all in the publishing and print industry.
Our advice? Try our Korean and digital print capabilities. You will be impressed by our quality and scheduling. Give us a call today: +(502) 896-9644. You’ll be glad you did.
Want a quote? Reach out to use here - http://fourcolour.com/quote/
Want a digital short run produced and delivered in under two weeks? Self-quote here - https://www.fcidigital.com/product_list.html
And what Publishers Weekly is saying: https://www.publishersweekly.com/pw/by-topic/international/international-book-news/article/80077-books-a-target-of-new-china-tariffs.html