Tariffs and World Coin Collecting
bosox
Posts: 1,565 ✭✭✭✭✭
As you might imagine, there is a lot of talk on the Canadian forums about tariffs and Canada/U.S. numismatic transactions. I would be surprised if the same is not true on the Mexican coin sites. I also believe the Trump administration intends to adopt similar tariffs on E. U. goods.
Obviously, it will take time for the rules to become clear and to see if this gets negotiated away quickly, or not. If tariffs last, I wonder what effect this will have on coin prices. There are significant world coin collections and probably dealer inventory already in the U.S.
Do prices on these coins rise 25%, just because they can in a free market, even though no tariffs would apply for sales between American buyers? An American buyer's only alternative would be to order from another country and pay the tariff.
If prices increase for world coins already in the U.S., does this eventually spill over into the home country markets?
Do tariffs just kill international coin transactions as demand evaporates?
I don't know the answers to these questions but find them food for thought.
http://www.victoriancent.com
Comments
For European coins, prices could come down outside the US, but most collectors are in Europe so I doubt it. US buyers tend to stick to buying from US dealers anyway, and already pay over the odds to have slabbed examples, so presumably will continue to do that.
For Mexican coins it could kill the market, as there are propotionally more collectors in the US. Like the Russian coin market outside Russia - prices are the same but there are no coins to buy.
I will continue to buy Latin American coins (I live in Canada). I like many are not happy about all this (taxing between friends) but I will continue my hobby. Will cut down on other stuff. All this will pass at some point. I will not buy over inflated coins unless I know I will not see another for years or longer.
Keep in mind most coins I buy are 50$-150$.
NFL: Buffalo Bills & Green Bay Packers
Don't want this to turn political, but our one of our economics professors (Nobel Prize Winner) Samuelson absolutely broke down the problems with tariffs and how they were inefficient trade "adjusters". And how in the World did Canada get pulled into this (don't understand Mexico either)?
Well, our precious Libertads will likely get hit now....
Well, just Love coins, period.
In no way will the prices rise on coins that are not subject to tariffs based on their physical locations. A seller would simply keep more often proceeds upon sale as buyers won’t adjust their willingness to pay up. It will simply act like the buyers premium at the auction houses.
I think the most likely outcome is that fewer coins are offered in the near term if they are subject to tariffs or the specter of tariffs. Wouldn’t want to consign a major collection with a multinational audience and wait 3-12 months until the sale. That’s a lot of duration risk in the trade war climate.
Latin American Collection
That’s not how it would work. If the market value didn’t change then sellers would be less willing to import tariffed coins because they would have to pay tariffs and wouldn’t make as much of a profit anymore (and probably none at all, or a loss). There’s no incentive to import at that point. This would cause fewer of those coins to be available in the US. Then the market value in the US would rise from scarcity - buyers would be competing for a smaller amount of available coins. This is exactly what happened in Japan a few years ago. Also, any sellers who did bother to import coins and pay tariffs would simply ask higher prices in order to make a profit, thereby forcing buyers to pay up.
I agree there is a dynamic of fewer coins for same buyers based in the US, but the entire foreign buyer base is now having to pay 25% more and must factor that in. So net, not sure you will see prices rise for US based coins.
Latin American Collection
Not sure I follow the logic of prices rising elsewhere leading to no effect here, but the foreign buyer base wouldn’t have to pay anything more. Tariffs would affect imports into the US, not coins sold in or into other countries. Prices would rise in the US, but not necessarily anywhere else.
Do we have any volunteers to call President Hoover and explain that the Smoot-Hawley Act of 1930 did not achieve the desired economic results?
Not a political statement... just added emphasis as to the value of a History Degree.
As for the coin market... there will always be a market for rarity and condition rarity at any price.
Experience the World through Numismatics...it's more than you can imagine.
I never had bought any coin from any site or place in Mexico, actually do not know of any one that sells the type of coins that I want to buy, I know of sites but do not match or have the coins that I like to buy, I buy always first from the USA, then from Europe and the UK.
I know that people that live in the border, go across and can buy coins and simply bring them back or the inverse bring their coins for sale at the coin stores.
Tariffs have been suspended to Mexico and Canada for 30 days. Trudeau will get things done in Canada as promised to Trump today. For Mexico I do not follow their politics.
Glad we can shake hands and work as friends vs the the alternative.
NFL: Buffalo Bills & Green Bay Packers
Is this for anyone that ends up buying from Mexico on a coins website (if any, how many that post here buys coins in Mexico websites?) or an auction site there? (the only one that I know is BB auctions, but I guess one of the owners is from Texas, the other owner I think is in Guadalajara) that they will increase the coin prices with the excuse of the tariffs, if it ends up happening? in March.
Doesn't sound much like working as friends.
Is this better ''friends'' under this current US administration. I get what you mean but Canada and the USA have had a good relationship for a long long time. As a Canadian this is a bump in the road but hopefully things get better versus going down hill. I hate seen people suffer (Americans or Canadians and it is always the poorer people that get hit the most) I rather see people have peace and stability.
NFL: Buffalo Bills & Green Bay Packers
Of course looking forward rather than just reacting gives one pause. All this from fentanyl crossing the border? PLEASE! Anyway, this is what we get I suppose.
Another thought on modern Libertads: what about those coins routed through other countries? Presumable they would not be affected....
Well, just Love coins, period.
If US based buyers have to pay a 25% tariff to bring coins into the US, they will buy far less overseas, and probably leave most of those purchases overseas for shipment at a later date. And that's not theoretical. That's exactly what has been going on with Chinese and Russian coins since high tariffs were introduced on those coins maybe a few years ago.
As for prices in the US, I wouldn't expect much of an effect. I think most collectors will work on the assumption that the tariffs won't last, and they won't want to pay a premium now and see it vanish when the tariffs are lifted.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I suspect that Mr. E, is correct. My only caveat, is if the tariffs were to last a long time, then I suspect it then begins to affect prices in the U.S. Thankfully, it doesn't seem if they will last a long time.
http://www.victoriancent.com
I don’t think smaller transactions will be affected by tariffs. For the coins I have bought from foreign sellers (typically a few hundred bucks at the most), the eBay seller isn’t listing the full value as they want to avoid issues at customs. Larger value packages that are insured and declared for full value would be a different matter.
These trade wars have been going on for years, just now making the news. The US and EU will typically tariff about a dozen of each other’s products at 100% over some ludicrous issue. They then negotiate it out, and tariffs are refunded with interest, at least on the US side. I’m not worrying about it.
interesting, I'm curious how it works, I assume that's a reason there's so much more SDB availability (at least small sizes) in big auction towns. but you have to open SDB accounts in person, don't you, so bidders bid in person, put their coins in a box, plan to return? will auctions hang onto coins for years? I heard it was more people walking one coin at a time back.
Many ways to skin a cat. But, for example, if I bought Chinese coins in Germany and planned to sell them at a Hong Kong auction, I'd probably have the coins shipped directly to Hong Kong. No reason to bring them back to the USA. And if I bought something for my collection anywhere in the world, I might ask the auction company to hold the coin for me until tariffs were lifted. And if I accumulated enough value sitting in a foreign land, I might get a safe deposit box there.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
thanks, you have an interesting job
Let's hope the tariffs are only a bargaining tool and not a feature. We're already paying 20-25% buyer premiums as it is.
Yes, but there are still a multitude of questionable situations.
What if you decide to send your brother in Germany your worldwide collection for whatever reason-to give to him or store with him but not to sell. A year later you decide to sell it in Germany. No tariff? Seems that there might be ways around such tariffs.