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Tariffs with a Capital T: How the Trade War with China is Af…

image: Rolf H via Wikicommons

The following is a guest post from John Saginario: FPV flyer, writer and host of the Wild Flyers podcast.

As drone racing season heats up, along with the weather in most parts of the U.S., pilots nationwide are getting their quads in shape for fun and competition. Often, that means buying new parts to fix what’s frequently smashed into the ground at breakneck speeds.

What’s different now is a political climate that’s lead to big changes for drone enthusiasts. Around the online communities, a lot of pilots are discussing something most didn’t think about a year ago: tariffs.

To be clear, retailers have always had to pay some import duties on certain products, and quadcopter parts specifically have often fallen into a sort of gray area, in which both importers and exporters are not always certain how to classify these goods.

However, those fees have traditionally been baked into the pricing, and often small enough to have a limited impact on overall sales.

That all changed recently when the U.S. Government announced new tariffs on Chinese imports. Nobody knew for sure, at the time, what affect the tariffs would have on the industry.

We’re now beginning to get an idea.

Passing On The Costs

A few retailers, notably GetFPV and NewBeeDrone, have both announced they will be adding new surcharges of 2.9% to all orders, to help make up for the additional cost of doing business.

Both companies have said the tariffs have hit some popular products, like electronic speed controllers, receivers, motors and batteries, while not affecting other items. So the owners say they’ve decided to spread the burden evenly to all customers, by including an across-the-board surcharge instead of raising prices dramatically on specific products.

The reaction to this decision has been both positive and negative, with some hobbyists on social media calling the decision unfair, and saying they would no longer support retailers that charge such a surcharge.

However, others have said they believe it’s the fairest solution to the problem, and they point out all retailers are still taking a hit on profits, to cover the increased cost.

Time Will Tell

It should be said, there are many other retailers who have opted not to include a surcharge or raise prices, deciding instead to wait it out and see how it impacts their bottom line.

It’s a complex issue, especially for those without extensive knowledge of trade economics. GetFPV says it’s already been hit with tens of thousands of dollars in additional tariffs. For its part, the company has posted a pretty extensive blog detailing the various codes and tariff issues they face.

For now, it’s up to the individual retailer do determine how much of the increased costs it can shoulder, and how to avoid them. But it seems questions around the issue of tariffs are far from answered, and the long-term consequences of increased cost won’t be known for some time.

John Saginario is the host of the Wild Flyers Podcast (www.soundcloud.com/wild-flyers-podcast/) and has been flying for 2 years. He enjoys building and flying, and engaging with the hobbyist community. All opinions are his own, and not representative of his employers or its affiliates.

https://dronelife.com/2018/08/14/tariffs-with-a-capital-t-how-the-trade-war-with-china-is-affecting-the-drone-community/

DroneLife.com

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