The Canadian Association of Numismatic Dealers is warning its members that new U.S. tariffs taking effect Aug. 19 could have a significant impact on certain Canadian coins and other numismatic material shipped to customers south of the border.
The United States is imposing an additional 50 per cent tariff on a broad range of specified Canadian-origin goods. A review by CAND of the affected U.S. tariff classifications found that some categories covering numismatic and collectors’ material are included.
“CAND is alerting members to new U.S. tariffs scheduled to take effect Aug. 19 that could affect certain Canadian numismatic material being shipped to customers in the United States,” the association stated in an advisory to its dealer members.
The tariff measures are scheduled to apply to affected goods entered for consumption, or withdrawn from warehouse for consumption, beginning at 12:01 a.m. ET on Aug. 19. The White House proclamation establishes an additional 50 per cent ad valorem duty on specified products of Canada, on top of other applicable duties, taxes and charges.
Of particular concern to Canadian coin dealers is Harmonized Tariff Schedule of the United States (HTSUS) classification 9705.39.00. That classification can cover certain collections and collectors’ pieces of numismatic interest that are 100 years old or less and appears on the list of products subject to the additional tariff.
HTSUS classification 7118.10.00, which covers certain coins other than gold coins that are not legal tender, also appears on the tariff list. Both classifications are specifically included in the annex outlining affected Canadian goods.
CAND cautioned, however, that the inclusion of numismatic-related classifications does not mean every Canadian coin shipped to the United States will automatically be hit with an additional 50 per cent duty.
“Importantly, this does not mean that every coin or numismatic item shipped from Canada to the United States will automatically face a 50 per cent tariff,” CAND stated. “The applicable treatment depends on factors including the type of material, its tariff classification and its country of origin.”
CANADIAN MATERIAL AT ISSUE
CAND’s preliminary assessment suggests Canadian collectors’ pieces 100 years old or less could be of greatest concern because of their potential classification under 9705.39.00.
Collectors’ pieces more than 100 years old, meanwhile, may be classified under 9705.31.00, which CAND said does not appear on this particular tariff list.
The association also believes legal-tender Canadian collector coins may fall outside the affected classifications if properly classified under 7118.90. Gold and silver Maple Leaf bullion coins classified as legal-tender coins could similarly fall outside the new tariff.
The situation becomes more complicated for non-gold coins that are no longer legal tender. Depending upon the item, those pieces could potentially be classified under 7118.10.00 or one of the collectors’ categories under heading 9705.
Tokens, medals and medallions present further classification questions, CAND said, and could require individual assessment.
Country of origin is another important consideration. A U.S. or world coin being sold and shipped by a Canadian dealer is not necessarily considered a Canadian-origin product simply because it is being shipped from Canada.
CAND stressed that dealers should therefore not assume the country from which a package is mailed automatically determines the origin of the numismatic material inside it.
COST COULD BE SUBSTANTIAL
For material that does fall under one of the affected classifications, the potential cost to collectors and dealers is substantial.
CAND provided the example of a Canadian numismatic item carrying a customs value of $2,000 US. If properly classified in a category subject to the additional 50 per cent tariff, the additional duty could potentially amount to $1,000 US.
The association has also received reports suggesting the impact is already beginning to appear within the broader Canadian collectibles industry.
“A Canadian stamp dealer has advised that UPS is already applying the 50 per cent tariff to impacted stamp shipments and that Canada Post’s Zonos system is also calculating the 50 per cent tariff,” CAND reported.
While that experience involves philatelic rather than numismatic material, the association said it believes coin dealers should be aware of the development as they prepare shipments destined for U.S. customers.
DEALERS URGED TO VERIFY
CAND is recommending dealers take a cautious approach until the implementation and interpretation of the new tariff measures become clearer.
“For the time being, CAND recommends that members shipping numismatic material to the United States confirm the appropriate tariff classification and country of origin with their customs broker, carrier or shipping provider before shipping,” the association stated.
It is equally important, CAND warned, that dealers not simply change the tariff classification of an item in an attempt to avoid the additional duty.
“Members should not assume that all numismatic material is affected, nor should tariff classifications be changed simply to avoid the additional duty,” the association advised.
Dealers may also want to alert American customers to the possibility of additional import charges before completing a transaction or sending a shipment. Unexpected duties on arrival could otherwise result in disputes between buyers and sellers.
The association stressed that its assessment is preliminary and individual dealers remain responsible for determining the proper customs treatment of their shipments.
TARIFF TAKES EFFECT AUG. 19
The new measures stem from U.S. presidential action under Section 338 of the Tariff Act of 1930. The July 20 proclamation directs that specified Canadian products be subject to an additional 50 per cent ad valorem duty beginning Aug. 19.
The White House said the measure is intended to respond to what the U.S. administration describes as Canadian discrimination against or unequal treatment of American commerce. The proclamation also gives U.S. Customs and Border Protection authority to issue guidance and make determinations necessary to administer the additional duties.
For Canadian numismatic businesses, however, attention is now turning to how U.S. customs authorities, brokers and carriers will classify individual coins and collectors’ items once the measures take effect.
CAND said it remains hopeful ongoing discussions between the Canadian and U.S. governments will produce changes to the measures. Until there is official confirmation, however, the association is advising dealers to prepare for their implementation.
“CAND will keep members updated as additional information and clarification become available,” the association stated.
The organization is also asking dealers who receive information from customs brokers, carriers or other reliable sources – or who have direct experience shipping numismatic material under the new tariff system – to share those details with CAND so the association can review the information and provide further updates to its membership.
CAND emphasized its advisory is intended as general information rather than individual customs advice. Dealers should confirm the treatment of specific shipments with their customs broker, carrier or U.S. Customs and Border Protection.