Tariff plunge≠price reduction of imported goods guides consumption backflow

Starting from June 1, my country will reduce the import tariff rate on some daily consumer goods such as clothing, shoes, skin care products, and diapers, with an average reduction of more than 50%. Industry insiders and experts have unanimously analyzed that tariff reductions will have little impact on terminal prices. If the 30% consumption tax can be adjusted, it will have a greater impact on commodity prices.
This time, the import tariff rates for a total of 14 categories of goods have been significantly reduced. Among them, the import tariff for suits, fur clothing, etc. will be reduced from 14% to 23% to 7% to 10%; the import tariff for short boots, sports shoes, etc. will be reduced from 22% to 24% to 12%; the import tariff for diapers will be reduced from 14% to 23% to 7% to 10%. The import tariff on skin care products has been reduced from 7.5% to 2%, and the import tariff on skin care products has been reduced from 5% to 2%. In addition to the products that have implemented low tariffs in previous years to promote consumption and improve people’s livelihood, my country has cumulatively reduced tariffs on many types of daily necessities such as clothing, shoes, skin care products, baby food and supplies, kitchen cookware, tableware, eyeglasses, etc. Import duties on consumer goods.
As soon as this news came out, there was a lot of praise on the Internet. Many people believed that the sharp reduction in tariffs would lead to an adjustment in terminal retail prices. In this regard, Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce Research Institute, said in an interview with reporters, “This tax reduction adjustment is very large, exceeding previous market expectations. For example, the tax rates on skin care products and diapers are directly reduced to 2%. However, the specific price reduction of related products depends on the response of brand owners, and is not necessarily equivalent to the reduction of tariffs, because tariffs are only the cost of importing after all.”
​Impact on terminals:
Tariffs account for a low proportion of retail price
In fact, when an overseas product travels a long distance to reach domestic consumers, its selling price also includes value-added tax, consumption tax, customs declaration fees and expensive transportation costs, among which tariffs account for a large proportion. few. Therefore, some analysts in the daily chemical industry believe that the impact of a significant reduction in tariffs on the price of imported goods is more psychological, and the actual price reduction is not necessarily very obvious.
Zhang Bihua, general manager of Guangzhou Zhongshang Daily Chemical Co., Ltd., said in an interview with this reporter that generally imported cosmetics include tariffs, 17% value-added tax, and 30% consumption tax. The consumption tax was canceled for skin care products in 2006. If a skin care product with an import price of about 50 yuan reaches consumers, it will have to pay a tariff of 2.5 yuan (calculated based on the previous 5%) and a value-added tax of 8.925 yuan (the calculation formula is 50×1.05×0.17). In this way, the tax is reduced The total tax rate is 11.425 yuan. Based on the 2% tariff rate after this reduction, these two taxes are 9.67 yuan, which is actually a decrease of about 2 yuan.
“The import price of the product and some taxes, together with customs declaration fees, warehousing and logistics fees, discounts to suppliers, entry fees to large shopping malls, and channel fees constitute the cost of the entire imported cosmetics company.” Zhang Bihua said .
Judging from the sampling data of the National Bureau of Statistics, the proportion of import tariffs in the market retail price of skin care products, clothing, shoes and other products ranges from 0.4% to 6.5%. Therefore, the impact of lowering tariffs on lowering the retail price of consumer goods may not be obvious.
In fact, compared with reducing tariffs, adjusting the 30% consumption tax will have a greater impact on the price of goods. Take cosmetics (makeup, perfume) as an example. The tariff rate is 10%, but the consumption tax rate is as high as 30%. Together with the value-added tax of 17%, this is also an upper-middle level internationally. In the United States, the same product is levied a sales tax of about 5% to 7% of the sales price. Feng Jianjun, an expert in the daily chemical industry, believes that for cosmetics and skin care products, the 30% consumption tax is the real big deal.
Influence on giants:
Taking advantage of tariff reduction to launch price reduction marketing
Although the benefits to consumers from this tariff adjustment are limited, major brands such as Estee Lauder, L’Oréal, and Shiseido have expressed support for the government’s move to reduce tariffs and will adjust the selling prices of their products in the Chinese market. However, as of this reporter’s time, At press time, none of the above three companies had announced specific plans.
In this regard, some industry experts pointed out that although the impact of the import tariff adjustment policy on retail prices is limited, under the pressure of declining performance and aging of their own brands, the tariff adjustment just gives imported cosmetics companies a reason to reduce prices.
Regarding the question of whether to reduce prices, Zhang Bihua, general manager of Guangzhou Zhongshang Daily Chemical Co., Ltd., said: “Perhaps products with a terminal price of thousands of yuan should be reduced in price. After all, tariff reductions will have a great impact on their costs.”
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Impact on overseas purchasing agents:
Nearly 50% tax rate VS 10% personal postal tax
Industry insiders analyze that although this tariff adjustment has not yet had a major impact on terminal retail, it will have a certain impact on overseas purchasing businesses such as “Express Duty Free Shops”, cross-border e-commerce and some related practitioners. Take Jumei Youpin, for example. After news of the tariff reduction broke out, Jumei Youpin’s share price fell 15% on May 27, the largest single-day drop since its listing in May last year. Some analysts believe that the tariff adjustment will have a greater impact on overseas shopping business “speed duty-free stores” such as Jumei Youpin, because their product lines are concentrated on varieties that have been subject to reduced tariffs.
At present, my country’s customs has two taxation rules for imported goods. One is that when enterprises purchase foreign goods into China and sell them in stores, the customs levies customs duties, consumption tax, and import value-added tax;The other is items brought in or mailed by individuals, which are subject to personal postal tax. Depending on the type of imported items, the customs levies personal postal tax of 10%, 20%, 30%, and 50% respectively. Currently, most consumers purchase All imported goods are in the 10% bracket.
Compared with the nearly 50% tax rate of goods tax (corporate purchases and sales), overseas purchasing agents and cross-border e-commerce are highly competitive in terms of retail prices due to lower tax rates. Although tariffs have been significantly reduced, because tariffs account for a low proportion of goods taxes, they have little impact on overseas purchasing and cross-border e-commerce.
Xiao Wang, a purchasing agent practitioner, said in an interview with this reporter that he was worried that commodity prices would drop due to tariff reductions, which would affect his income. In this regard, Ms. Li, a citizen, said: “Even if the price drops, some specific products cannot be bought in China at all, such as Chanel. Many specific models cannot be bought in China, so you have to choose to purchase them on behalf of others.”
​Official voice:
Guide consumption back
At the State Council’s regular policy briefing held on May 29, Vice Minister of Finance Shi Yaobin introduced the reasons for the tariff adjustment and said that these 14 categories of goods are goods that consumers purchase a relatively high proportion of overseas. “Clothing, shoes, skin care products, diapers, etc. are commodities that are consumed a lot overseas and consumers have strong willingness to buy. Reducing tariffs will help increase imports reasonably and promote the upgrading of domestic consumption.”
The “2015 China Consumer Market Development Report” recently released by the Research Institute of the Ministry of Commerce pointed out that the price of domestic imported high-end consumer goods is much higher than that of overseas. The transparency of consumer prices makes consumers unwilling to pay the high price difference, which greatly affects domestic consumption. desire. The primary reason for the huge price difference between domestic and overseas consumer goods is relatively high tax rates.
According to incomplete statistics from the Ministry of Commerce, China’s overseas consumption exceeded 1 trillion yuan in 2014. Some insiders believe that lowering import tariffs is expected to narrow the huge price difference between domestic and foreign goods and guide the return of overseas consumption. Wang Jian, director of the International Business Research Center of the University of International Business and Economics, pointed out that measures such as lowering tariffs will help people in need more conveniently purchase high-quality and low-price overseas consumer goods. In the future, with the expansion of imports and lower prices, the phenomenon of Chinese people going overseas to buy toilet seats and rush to buy milk powder may become a thing of the past.