Tariffs - What's The Deal With 25% Tariffs

UPDATE Feb. 12, 2025
Small update for you. While Canada and Mexico successfully delayed tariff implementation for one month, China was not successful. 10-25% tariffs are currently in place for products originating in China or Hong Kong. Several of the brands we carry are manufactured in China so this tariff applies. HOWEVER, the De Minimis rule means that orders with up to an $800 value can still cross duty free. So for our USA customers you're still good as long as you keep your orders under $800 each.

Note: The border situation is changing daily and is currently quite fluid. While this is how things currently stand, we don't know how long it will be this way. So, get your orders in while it's still favorable to do so, keep an eye on the news and signup for our newsletter for updates.

- Stephanie
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Ok everyone, deep breath, let's discuss the 25% tariffs that may come into place in the next few weeks.

First things first, the Trump administration ordered tariffs to begin Feb. 4, 2025. However, after talks with Mexico and Canada, the tariff start date has been delayed by 30 days. So currently we have some breathing room to discuss what tariffs are and how they might affect our customers.

What is a tariff?
A tariff is a tax that a buyer pays when they import a good from another country. Tariffs are used by a government to generate revenue and to protect/stimulate domestic industry.

Now let's talk specifically about cloth diapers...

Currently, AMERICANS have free trade with Canada which means a 0% tariff on cloth diapers. Since the signing of the Canada-US Free Trade Agreement in 1988, Americans have been able to purchase Canadian goods with no tariffs (and a better exchange rate on the dollar). So right now, for example, when our USA customers purchase from our website, there are no additional taxes/tariffs to pay when the order ships across the border to the USA.

Currently, CANADIANS must pay an 18% tariff on cloth diapers. This tariff is levied by the Canadian government. When a Canadian person or company (like Cloth Diaper Kids) orders cloth diapers from the USA or any other country, that Canadian person or company pays an additional 18% tax at the border that goes to the Canadian government. This Canadian tariff has nothing to do with the 25% proposed Trump tariffs. This 18% tariff has been in place for many years and is not affected by these new proposed changes. The cost of the duty is factored into the selling price of the diapers which is why imported brands are more expensive in Canada. Canadians will see no changes when ordering on our website.

So what might change?

IF the 25% Trump administration tariffs do in fact become a reality, that would mean that Americans would begin to pay a 25% tax to the American government when they purchase and import cloth diapers from Canada or Mexico (10% importing from China). Americans would see this reflected as a 25% tax collected during checkout. So the 25% American tariff (if imposed) would be paid by the American customer and that tax gets remitted to the American government.

*NOTE: If the Canadian government puts in retaliatory tariffs, cloth diapers are not included in that retaliation, the current 18% tariff is not currently set to change and there will be no difference for Canadian purchases of cloth diapers at Cloth Diaper Kids.

To sum up.
In the event of new American tariffs:
CANADIANS will see no changes when ordering at Cloth Diaper Kids.
AMERICANS will see a 25% tariff tax when ordering at Cloth Diaper Kids.

Hopefully that makes sense for everyone. If you have any questions, please let me know and I will do my best to answer them.

And if you haven't already, you are welcome to join my newsletter for the most up to date information on changes affecting the cloth diapering industry as they happen.

- Stephanie