A Quick Post About Tariffs

Keep Calm and Read On.

I’m taking a rare day off, but I wanted to write a quick post about tariffs since things have escalated, especially with China. You're wrong if you think a TikTok deal is remotely close to happening. The tariffs Trump has imposed on China and China’s retaliatory tariffs mean that both countries are currently playing chicken. You don’t need an MBA to know it’s not a great scenario.

The American Booksellers Association published an overview of tariffs, which you can read here. I suggest bookmarking the page so you can refer to it whenever necessary. The gist is this: Books are exempt from tariffs. Paper, pulp, ink, fuel, shipping costs, and production costs (in China) are affected by tariffs. There was a baseline tariff on books with China, which remains.

From the American Booksellers Association:

• Paper, Pulp, and Ink: These items do not qualify for the IEEPA (International Economic Emergency Powers Act) exception. However, the tariff rate will vary depending on the country of origin. There is a 10% baseline tariff for all countries, but as noted before, there is special treatment for those items if they come from Canada and Mexico and are USMCA-compliant. Existing Section 301 tariffs from China also apply.

• Increased Shipping Costs: While experts don’t expect dramatic fuel increases, they could spike if the tariffs spark inflation or an escalation of trade wars.

• Rising Costs for Paper and Printing Materials: Paper imported from countries like China (34% tariff) and the EU (20% tariff) will increase costs.

• Increased Book Production Costs: The 34% tariff on Chinese imports could also increase book production costs. U.S. domestic printing is more expensive due to labor and facility costs.

• Impact on International Sales: U.S. publishers exporting books may face retaliatory tariffs from other countries, such as China and the EU, potentially reducing export revenue.

• Small Publishers Hit Hardest: Small publishers, reliant on imported materials or overseas printing, may struggle to absorb increased costs compared to larger publishers.

I know this doesn't sound good, but we don’t yet know what it will look like in practice within book publishing. Could book prices increase? Maybe, but as I’ve written, publishers and retailers are sensitive to what prices will cause consumers to pull away. The atmosphere we find ourselves in reminds me of the early pandemic days when we didn’t know how the industry would sustain itself. In time, we learned that since people couldn’t go out, they bought more books, watched more on streaming services, and listened to many music and podcasts. In some ways, we are looking at a similar situation with tariffs: if going out becomes cost-prohibitive, people will stay home. They’ll look for inexpensive entertainment, and books fit the bill.

Something I often think about is how much book publishing has survived. It is a business that has been around for hundreds of years, and while it has experienced ups and downs, it is still here. We may see changes in the industry over the coming months, and we may dislike them, but I don’t expect the industry to crumble any time soon—or at all.

What needs to happen is for authors to adjust expectations. Your book might not have a robust first printing, and that is okay—wouldn’t you want a printing of 2000 books to sell out rather than printing 10,000 books and only selling 1000? It might be harder for publishers to justify acquiring highly designed books. Perhaps that means waiting this out before publishing a coffee table book. If conditions are bad, you can’t force a particular kind of book into the market. Doing so sets a book up for failure, and nobody wants that. Bookstores are already selective in scheduling events, not because they are eschewing you but because their margins are razor-thin, and their events need to bring in revenue. I could go on, but I think you get the idea.

To my publishing colleagues, I say this: we have been through a lot these past few years, and the community has endured. The key word there is “community.” We need each other to get through. It can feel deflating right now, and I get it. We need to remember that we have the power to bring books to people when the world is dark and they need some light. That, above anything, is why we do what we do.

-Kathleen