What you should know about the tariffs

This summer the Trump administration imposed tariffs on many of the United States’ global trade partners. One of those tariffs is a 20% tax on goods imported from Vietnam, where our tents are sewn. There’s a lot of (mis)information floating around out there, so read on to learn what these taxes are and how they affect SlingFin (and you).

What is a tariff?

A tariff is a tax imposed by the US federal government on goods imported from certain countries. When the products enter US customs, the US sends the business receiving the goods a tax bill. In our case, the tax is 20% of the total cost of the goods. For example, if we pay our factory $1000 to make a tent, we have to pay the US government $200 in taxes to bring that tent into the US. That means our total cost to get the tent to our warehouse, called the "landed" cost, is now $1200. Retail prices are calculated based on the landed cost of a product.

Who pays the tariff?

Tariffs are taxes paid by American businesses, NOT the country that manufactures the goods. When we import tents from our factory in Vietnam, the US government sends SlingFin a bill based on the value of the tents we are bringing into the US, and we cut a check to Uncle Sam. Because these taxes increase the landed cost of products, businesses often have no option but to raise prices to keep the lights on. Consequently, much of the tax is ultimately paid by American consumers, albeit indirectly. If anyone tells you that foreign countries or freight companies are paying for the tariffs, they are lying to you.

How much (and when) are prices going to go up?

SlingFin is an employee-owned, direct to consumer business, which means most of our sales are directly to you. This means that although our tents cost more to make than comparable brands, we can take a smaller margin and offer higher quality tents at similar prices to companies selling through large retailers. However, this means our tents are already priced as low as we can afford while still keeping the lights on, and we have no interest in playing the “cut costs, cut corners, boost volume” game that other companies play. Wholesale-focused brands have more margin to absorb the additional tax burden because their tents are cheaper to make than ours. Basically, that leaves us with the choice of eroding our quality with cheaper fabrics and dumbed-down designs to make our tents cheaper or raising our prices. Since SlingFin is in the business of quality, not quantity, the former is not an option for us.

As we pay the tax bills on our upcoming shipments of tents, we will try to absorb as much of the tax burden as we can for as long as we can. We will hold prices steady through the end of October, but beginning November 1, we anticipate price increases of 10-15% across the board, depending on the tent model.

Can’t you just find a factory in a country without tariffs or bring production onshore?

In short, no. If we made a less technical product that was easier to manufacture, we could find someone else to make it. However, our tents are extremely intricate and labor-intensive to manufacture and our current production partner is the most skilled manufacturer we know. They specialize in high-end tents and Martin has been working with them for over three decades now. In addition to being family-owned and providing their employees fair pay and good working conditions, their craftsmanship is the best in the world. We have found no other factory that can produce tents to our quality standards. The sewing industry in the US is simply not developed enough to produce our tents here. Between the lack of skilled sewers and high labor costs, onshoring production would result in paying 2-3x as much (even when the tariffs are factored in) for a lower quality product. On top of this, there is no fabric manufacturer in the US capable of milling or coating the lightweight technical fabrics we use in our tents, so our raw materials would still be subject to tariffs even if the tents were sewn domestically.

Should I buy a tent now before the price goes up?

If you don’t need a new tent, don’t buy one. Better yet, repair your old tent. We have a video for that. But if you do need a new tent, sooner is probably better than later. As always, thanks for your support and for being a SlingFriend!