Today on Civics 101, we answer listener questions about tariffs. And then, we look at how they've affected one American Industry. It's not a game, but these companies do make them, and they've been hit hard by President Trump's ever-changing tariff policies.
Transcript
Nick Capodice: Uh, what's the sort of thing we can say to, like, indicate that we're playing an 1800?
Hannah McCarthy: You always get the cheap boxes first.
Hannah McCarthy: I always forget about the cheap boxes.
Nick Capodice: It makes it so you don't have to use artisans, but you can use workers to get.
Hannah McCarthy: I know what it does.
Nick Capodice: Goods. They're just general.
Hannah McCarthy: Goods. I know this game like the back of my hand. That's the only thing I forget. Every time you need the boxes to win the game, you need the boxes for everything.
Nick Capodice: You're listening to Civics 101. I'm Nick Capodice.
Hannah McCarthy: I'm Hannah McCarthy.
Nick Capodice: And we have explained tariffs on the show recently. Please listen to our 101 on what tariffs are and how they work. If you haven't. I got a link down there in the show notes. Does anyone click on the links in the show notes.
Archive: Does anyone still wear a hat?
Archive: I'll drink to that.
Nick Capodice: We say it all the time.
Hannah McCarthy: Yeah, we say it in almost every episode.
Nick Capodice: I don't even know what the word show notes meant. Everyone. It's the little thing. It's like the information about this episode. We call that the show notes. Now you're an insider.
Hannah McCarthy: If you didn't know what it meant.
Nick Capodice: How does all our audience know? Anyways, yeah we are talking about tariffs again because they're changing all the time and we have gotten several listener questions about them since our recent tariffs episode. So first Hannah I'm going to answer some listener questions. And then we'll do a deep dive into how the recent tariffs are affecting one industry in particular, an industry we both love. Sound good.
Hannah McCarthy: Sound good. Is this going to be like a price of milk kind of episode?
Nick Capodice: Oh yeah. It's gonna be one of those.
Hannah McCarthy: Okay.
Nick Capodice: Okay. Cool. The price of milk. All right. Hannah, what do we got in the old question? Hopper? The old question. Basket.
Hannah McCarthy: Okay, first one, how much money has been raised by the tariffs since Donald Trump took office? And I think this one means, like, how much money have the tariffs provided to the United States?
Nick Capodice: Excellent. Yes, absolutely. Um, it's good to have a question that's got a nice firm pat answer from January 1st, 2025 to July 1st, 2025, and that's when we're taping this episode. The United States has collected $97 billion from tariffs. This is according to the US Treasury Department's daily Treasury statements. This money was paid to the US government by American businesses that bought things from outside the country.
Hannah McCarthy: And is that a lot? It sounds like a lot, but we have had tariffs for as long as we've been a nation. So how does that 97 billion compare to other years?
Nick Capodice: Yeah, to compare the same stretch of time last year, 2024, during the Biden administration, the US had collected $58.3 billion in tariffs.
Hannah McCarthy: Okay, so is 97 billion. Is that like breaking a record?
Nick Capodice: Yeah, not yet, but we're on track to break it. The current record is 2022 during the Joe Biden administration. We took in $102 billion over the whole year. So we're only halfway through the year, so we're probably going to break it. By the way, another thing in the show notes there is a wonderful tariff history tracker courtesy of the Federal Reserve Bank of Saint Louis.
Hannah McCarthy: That's actually fascinating.
Nick Capodice: Yeah, you can like, see what we charged every year. It goes back to 1930. That year we took about half $1 billion redos. All right, give me the next one.
Hannah McCarthy: All right, here we go. Where does the tariff money go once the government gets it? Originally in the 1700s, the money funded the government. Who decided where that money went? Is it the same now? Does it bypass Congress? Lots of good questions there.
Nick Capodice: Yeah. All in one email. Very thoughtful, very thoughtful. Uh, another pretty simple answer to this one, albeit with a nebulous caveat at the end. Hannah, the answer to where does this tariff money go is exactly the same as it's been since the 18th century. And I'm so glad our listener brought up the 1700s. And you know, why don't you, Hannah? I think I do have to be careful, Hannah. That's two carriage drops in one month. The tariff of 1789 was our very first piece of legislation as a country.
Hannah McCarthy: Oh, don't I know it. Nick. And with good reason. We had just won a war. We were pretty much broke, and we owed money all over town. And by town, I mean the world.
Nick Capodice: France was basically chasing the US like Sallie Mae. Chase me for my student loans. Live at the Comedy Cellar. Did I ever tell you the bit that my best friend and I used to fantasize about, like, a revolution era stand up comedy routine? I'd wear, like, a tricorn hat. Where are you from, sir? Oh, Fredericton. I hear there's a lot of taxation down in Fredericton, but not a lot of representation. Am I right, folks? Anyways, what's the deal with the food served on carriages these days?
Hannah McCarthy: Where's Fredericton?
Nick Capodice: I don't know, it's one of the ten oldest towns in America. But seriously, folks. The tariff of 1789 was a sweeping $0.50 per ton of goods that came to America on foreign ships, and $0.06 per ton on goods that came on American owned ships. There were a few exceptions. There's one fun, one tied to a certain trade. Good, near and dear to your neck of the woods, Hannah. Very low taxes on a certain good that you might say, flooded the Boston economy.
Hannah McCarthy: Oh, Nick. Is that a great molasses flood joke? People died!
Nick Capodice: So long ago. It was a sweet death.
Hannah McCarthy: Oh.
Hannah McCarthy: No no no, no.
Hannah McCarthy: Uh, but, yeah, we did need a lot of molasses in early America. It was not just for baked beans.
Nick Capodice: Yeah, it was for rum. And that is how the country funded itself. 80 to 90% of our federal revenue until the 1860s came from tariffs. But back to our listener question. Where does that money go? It goes to the US Treasury's general fund. It is the same place our federal income taxes go. And once it's there, it can be spent as Congress decides.
Hannah McCarthy: Just to clarify, Congress spends the money from that fund.
Nick Capodice: They do. Article one, section eight of the Constitution. This is the taxing and spending clause.
Hannah McCarthy: And what was the caveat that you mentioned earlier?
Nick Capodice: Yeah, the caveat is, is as we're taping this, the Senate is debating and voting on a massive budget bill which may have passed in the time between taping and putting this out. I think it might have passed a couple hours ago. Wow. Yeah. So I can't say where the money is going specifically until I read the bill. It's 900 some odd pages, but I got a pretty good idea. Hannah.
Hannah McCarthy: All right, one last question here. Who collects the tariffs?
Nick Capodice: I love this one, Hannah. Let me lay out how the money gets into that treasury fund. Refund. So the business or person or company in the United States that is importing that good from the other country is called the importer of record. When we buy that thing and it's put on a cargo ship in another country and it's shipped here, when it arrives at that port in America, the person can't get it until they pay the tariff to the CBP. Cbp that stands for the US Customs and Border Protection Agency.
Hannah McCarthy: Do they have like a a book that tells them how much money to charge someone before that thing goes away? I'm sure they're not keeping the numbers in their head.
Nick Capodice: Yeah, they use something called the Harmonized Tariff Schedule. The CBP says to the importer you bought hand-cut lace from China, and they look at the chart and they see what extra percentage is owed as a tariff.
Hannah McCarthy: All right. But I imagine this can get a little tricky, right? The tariff percentages on different goods from different countries have vacillated wildly in the last few months.
Nick Capodice: I think that's a bit of an understatement.
Archive: We saw a spike earlier today in markets, for example, based on a rumor and unfounded rumor, apparently, that Trump was going to potentially pause those tariffs. And then the administration said, never mind, we're not doing that. So you're seeing markets just like incredibly jumpy.
Nick Capodice: I also want to add, in April, after several changes to the tariffs, there was a glitch in the system, which meant that for a short period of time, nobody knew the correct amount of tax and no taxes were collected at all. When this glitch happened, I saw an interview on CNBC. Jared Marinelli, he's the vice president of a US sales and logistics firm. He said this, quote, social media posts are not law on the pause and increase in tariffs. With the constant changes to the regulations, all customs brokers in our industry have a difficult task ahead of them.
Hannah McCarthy: What if you buy something, it gets put on the boat and then the tariff changes while the ship is making its way here.
Nick Capodice: Yeah, that is a great question. Once the good leaves the factory or wherever it's made in the other country, the tariff rate is set right then. And this is specifically to prevent the cost going up or down while it's in transit. This is called an on the water clause.
Hannah McCarthy: One last thing. When you are at the port and paying the tariff, do you do you just write the customs person a check like, no, seriously.
Nick Capodice: Yeah, yeah, I'm good for it, I swear.
Hannah McCarthy: No, no, not an IOU.
Speaker6: I'm marker.
Nick Capodice: My marker is good in this town. Most of the time. Hannah, you get this all set before the good ships. And when the goods are at the port, people usually do a bank transfer, and they want you to do it quick. Uh, they don't want these ports clogged up with stuff like a storage unit in Weehawken. Now we've got the logistics out of the way. Time to talk about what these recent tariffs are actually doing when it comes to American businesses. One kind of business in particular. But first we got to take a quick break.
Hannah McCarthy: But before that break, if you like us, leave us a review. Uh, you can do it pretty much on whatever app you are listening to this current episode on. It is a tremendous way to let other people know that our show exists, and ideally that you like it, and it helps us out a lot. Thank you. We're back. You're listening to Civics 101 and today we are talking tariffs again.
Nick Capodice: Again.
Nick Capodice: Our last tariff episode was before they had been enacted. So this time I wanted a real nuts and bolts example of how tariffs affect an industry, one industry in particular, dollars and cents, how much money the US government is collecting and what the new tariffs are doing to American companies. So I decided to ask someone who makes just about my favorite product in the world.
Hannah McCarthy: Black licorice. You shouldn't eat too much, Nick. It's not good for you.
Nick Capodice: It's not good for the ticker.
Hannah McCarthy: This is not. This is not a sugar comment, everybody. Chris can be rough on the heart.
Nick Capodice: Uh, the good we were talking about is something near and dear to both Hannah and my hearts.
Jason Matthews: Kevin gave me a little bit of your background, so that's exciting. But, um. What what's what sort of gamer are you, actually?
Nick Capodice: This is Jason Matthews.
Jason Matthews: Hi. My name is Jason Matthews. I'm a game designer. I design Twilight Struggle. I work with Ford Circle games as well as a number of other publishers.
Hannah McCarthy: Oh, Twilight struggle.
Nick Capodice: Yeah.
Hannah McCarthy: That ranked number one on a little website called Board Game Geek for years.
Nick Capodice: Years.
Nick Capodice: And Jason also made a game called 1960 The Making of a president, where one player is Nixon and the other is JFK. Do you remember that one?
Hannah McCarthy: I remember that very well. Uh, I remember you were playing Nixon, and I, I don't I don't think I have ever gotten so anxious playing a board game.
Nick Capodice: Yeah, it's a wonderful game. It is a stressful game. So I was tired of hypothetical cost of things in our episodes. So I wanted to get a dollar by dollar breakdown. So I called Jason up because he has been speaking publicly about the recent tariffs and their effect on the board game industry.
Hannah McCarthy: And when did you talk to him?
Nick Capodice: This was May 6th, 2025.
Hannah McCarthy: Oh, okay. So this is when the tariffs specifically on anything coming from China were to my memory fairly significant.
Nick Capodice: Yeah.
Archive: Absolutely David. These numbers just keep changing as you know. And what we've just confirmed from the white House is that the new total rate against China is now 145% tariffs so far.
Hannah McCarthy: And just to make it clear, if I am buying sneakers made in China to sell in my local Boston store, and there is a 145% tariff on all goods from China as there was in May. If those sneakers cost me $5,000. Now I would have to pay $7,250 to acquire them.
Nick Capodice: Absolutely. And it's up to you, Hannah. It's up to you how you want to make up all that extra cash. Maybe you could, I don't know, raise the cost of shoes at your store.
Hannah McCarthy: All right. But the tariffs on goods from China are not 145% right now. Right? What are they?
Nick Capodice: Okay, here we go. What are. And what were the tariffs on goods? Cue that jangly piano. February 1st, President Trump signed an executive order putting 10% tariffs on all goods from China, 25% on all goods from Canada and Mexico. Two days later, he issued a 30 day pause on the Canada Mexico 1st March fourth. That pause ended. He doubled China to 20%. I'm skipping a bunch of these because there is a lot. Uh, March 24th, he announces a 25% tariff on any imports from countries that buy oil or gas from Venezuela, which we in America do, by the way. Uh, April 2nd, he announces the, quote, reciprocal tariffs. This is a 10% baseline on every country in the world. And then more depending on a formula, with the exception of 11 nations, including the aforesaid Canada and Mexico, because they have their own situation, but also Russia, North Korea, the Vatican, Cuba and others. China then raises its tariffs and then Trump raises them back. And by April 10th, the US has a 145% tariff on anything coming from China. Uh, the next day, Donald Trump announces there is an exception for electronics and electronics only. Not sneakers, not board games. I then interview Jason. Six days later, the president announces there is a 90 day pause on those tariffs. And that is maybe half of what happened. I didn't even get into automobiles or Madagascar vanilla, or European wine or American whiskey. And I'm going to take a deep breath. Here we go.
Hannah McCarthy: I thought that was pretty well done.
Nick Capodice: Thank you.
Hannah McCarthy: But you didn't say what the tariffs are right now.
Nick Capodice: I didn't.
Hannah McCarthy: Know.
Nick Capodice: Sorry. The most up to date figure that I could find today was from a website called China briefing.com. They have a quote on their website that says trade relations between the US and China are, quote, highly complex, shaped by a tangled web of tariffs that have been imposed, adjusted, revoked and reinstated going back to 2018. End quote. This website lists the current tariff on goods from China at 55%. This is from the 10% baseline tariff, and then a 20% fentanyl tariff and an additional 25% tariff on most goods made in China.
Hannah McCarthy: Can you clarify what is meant by a fentanyl tariff?
Nick Capodice: Yeah, I'm going to just quote what a white House official said. Uh, this additional 20% is because of punitive measures that President Trump has imposed on China, Mexico and Canada. Uh, associated with President Trump's accusation that those three countries facilitate the flow of fentanyl into the United States.
Hannah McCarthy: All right.
Nick Capodice: Okay.
Hannah McCarthy: And again, we're talking about a 55% tariff. But that number could change again.
Nick Capodice: It could change while we're recording these words.
Hannah McCarthy: All right. So back to board games. How are the tariffs affecting them. That industry specifically.
Nick Capodice: All right. Here is Jason again.
Jason Matthews: The way of board game publishing works is that there are basically two models. Uh one is direct sales. So if I for instance, the company I work with for circle, most of their games are direct sales. They sell through their website. People go directly to them. So there's no middleman, but the vast majority are going through the retail sales process. So that means right off the top, you can lop 40% off of whatever a board games MSRP. The the standard price is real quick.
Hannah McCarthy: What is MSRP?
Nick Capodice: That is the manufacturer's suggested retail price. Stores can charge more or less than the MSRP, but it is a very good guide to go off of.
Hannah McCarthy: Okay, so the retailer, let's say a local board game store, they take about 40% of what the person purchasing the game pays them for it, 40% of the money.
Nick Capodice: Yes.
Jason Matthews: And then inside the rest of that, the publisher has to pay an artist, a designer, possibly a developer. And absolutely the person making the game, the company that makes the game, usually a production cost is somewhere between 13 and 17% of the MSRP. So it's a significant portion of the cost of a board game, but it's nowhere close to the majority. It's not where most of the money is made, but it is. You know, it's noticeable when you've taken that 13% and doubled it, or 250% increase of that cost. Suddenly now it doesn't really make very much sense to publish a board game.
Hannah McCarthy: I'm still a little shaky on the numbers here.
Nick Capodice: I was to, so I figured the best way to wrap our brains around this was to imagine that we made a game.
Hannah McCarthy: We could do it.
Nick Capodice: We could. I think we could. And just to make it simple, let's say we designed a game called Civics 101 win, win a win.
Hannah McCarthy: I don't know about winning when it comes to civics, you know, unless it's like a win win situation. Um, maybe it's a cooperative game.
Nick Capodice: Yeah, yeah, we.
Nick Capodice: All win.
Nick Capodice: Civics one.
Nick Capodice: We all win.
Hannah McCarthy: But carry on.
Nick Capodice: Okay. Okay. So, Hannah, you and I come up with the idea, but we need a for real game designer to do the rules and design the board and all that stuff. And we are going to sell it in stores.
Hannah McCarthy: How many do we make? Like, how many games?
Jason Matthews: Normally, I kind of a middling print run would be about 20,000, 20,000 copies.
Hannah McCarthy: All right.
Nick Capodice: Yeah. So first off, Hannah, nobody's going to buy this game unless it looks pretty cool. So we have to hire an artist.
Jason Matthews: So we're doing a 20,000 print run for our game, and it's going to cost us somewhere, let's say around $3,000 up front for the art. And then you might pay an upfront kind of signing bonus for the game designer to kind of help pay for the prototyping and whatnot. And that'll usually be somewhere in the neighborhood of $5,000. So upfront costs, you're somewhere in that $7,000 range.
Hannah McCarthy: As in you and I have to pay seven grand just to get started.
Nick Capodice: Just to get started. And we have a long way to go.
Jason Matthews: And then you have to contract with your printing house. This is going to run somewhere short of 20% of the MSRP. The more components, the larger the game. Obviously the more expensive that all of that gets.
Hannah McCarthy: In the printing of the game. That happens in China.
Nick Capodice: Yes. And more on that later, I promise. I do imagine some of her listeners are like, why don't people print the games in other countries of the US? I swear I'm going to get to that.
Hannah McCarthy: Can we give a hypothetical MSRP for this game so we know how much we are going to make?
Nick Capodice: Sure. I suggested 49.95. I was going to make it 50. But you know pricey game.
Speaker10: What what?
Nick Capodice: But 49.95 is what somebody pays to buy Civics 101 in a store.
Jason Matthews: So at 49.95 we can say that this is going to cost probably about $7.50 a game to make after you have made it. Then you have to ship it back to the United States, and that will be an additional cost. Uh, normally if you're in a game of this size where you've got 20,000 units, you're going to be able to get a container. These days, you can get partial containers also. So at this very second, because of the trade interruption between the United States and China, containers are a bit cheaper than they were previously. So let's say you can do that for $10,000 or thereabouts with 20,000 units. You also have to pay for storage. You're obviously not just putting these in your garage, so you have to ship to a warehouse. Costs for shipping to a warehouse or additional to the cost to get it from China to the United States.
Hannah McCarthy: All right. So you mentioned that customs doesn't want things lying around at ports waiting to be collected. This is why it's got to go from the port to a warehouse.
Nick Capodice: Exactly.
Jason Matthews: Normally you're going to try and pick a central location at the warehouse so that you're shipping to individual retailers or to individual customers is less expensive. So a lot of these are located in Tennessee and whatnot. If you go the retail and distribution route, then you'll have a bunch of copies of the game sent directly to the distributor, and he will handle your retail outlet shipping and whatnot. After all of that, if you're going through retail, you get to lop off 40% of the cost for the retail and, uh, distribution percentage. And now, finally, you try and make some profit out of whatever you've done. I'm guessing you're going to get about $15 out of that, if you're lucky.
Hannah McCarthy: $15. That's what we get for a $50 game.
Nick Capodice: Yep. And that was in the pre tariff world. When I interviewed Jason there was a trade battle going on between the US and China where a game publisher would pay twice as much to get it to the United States.
Jason Matthews: And so now your $15 profit on your $49 game is down to $7.50. Now, if you are a capitalist and you're interested in making money, is that a rate of return that you're really interested in? Can you make money a lot more money a lot easier without all of these risks and uncertainties? Absolutely. So now what are you doing? Like what? What's the point?
Nick Capodice: And look, we know a lot of board game designers. I think it's safe for me to say that nobody really gets super rich from making board games. I mean, of course, yes, there are a handful of outliers, some really successful games, but it's it's just not something people do only for the money. It is not a get rich quick scheme.
Hannah McCarthy: So what is stopping game publishers from moving production somewhere besides China?
Jason Matthews: It's a very hard business case to make for anybody, so why are they going to do it? Which is not to say no one is going to do it. I'm just saying that you're you have to have a business model that overcomes these kind of questions. And if you're already a printer and a successful printer, then maybe relocating a factory to a place with a lower tariff rate for the United States makes perfect sense. Or you can expand your existing facility in Poland or Germany or wherever you are. But the idea that you are going to plop down a new board game making facility in Wisconsin very, very unlikely.
Nick Capodice: Jason told me a story about some companies that had tried to print in the United States, and it was not profitable, and the quality was nowhere near as good. The US and China have a rich production history going back decades when it comes to board games. More years for other things. Factories do this tremendously well. According to board game publishers. It's not about paying workers less in another country, it is about maintaining a long developed production ecosystem.
Jason Matthews: I don't know if you haven't ever played a war game. Most of them come with counters with all these detailed little bits of information on them. Well, printing that precisely on a counter turns out to be a technical expertise that a lot of people don't have, including some European printers who, you know, do board games. Otherwise the Chinese have mastered it. And it's not it's not a question of the Chinese being cheaper. It's not a labor question. It's a technical expertise coupled with, of course, this kind of investment in manufacturing equipment, printing equipment that most American printers just haven't made.
Hannah McCarthy: So what is all of this actually doing to the board game industry?
Nick Capodice: Since I had this conversation with Jason. Several prominent board game publishers have folded. One of the largest online board game retailers Board land. They also closed up shop. In addition, a handful of other board game publishers have filed a lawsuit they are suing. The exact name of the case is Princess Awesome and Stoneware Games, et al. Versus customs, which has been filed in the Court of International Trade. So to answer your question, I asked Jason, what could all of this do to the industry we love so much?
Jason Matthews: The industry? Well, first of all, of course it's being damaged. Some people are in marginal positions in the first place and they simply don't have the capital to make the adjustments quickly enough to save themselves. American distribution was already in trouble. Some retail is already in trouble. There's practically a new announcement every day and has been since the tariffs have come out. And then we get back into this. Okay. I'm a capitalist. I'm trying to make money. Am I going to invest multi-millions of dollars into printing presses made in Germany for an industry with low margins in the first place? Who? I can't tell if the tariffs that are being enacted today are still going to be around three years from now, when I might be able to recover the cost of buying these machines. It just puts all of this negative pressure on doing the exact thing that the president suggests that he wants to do, which is bring back manufacturing to the United States. Uh.
Nick Capodice: Your turn.
Nick Capodice: Hannah.
Nick Capodice: Take those bicycles. Put them on that boat.
Hannah McCarthy: What am I supposed to do without the boxes?
Nick Capodice: That is, tariffs and specifically tariffs and board games. This episode is made by me. Nick Capodice with you, Hannah McCarthy. What a joy. Thank you. Uh, Kristina Phillips is our senior producer, Marina Henke, our producer, and Rebecca LaVoy, our executive producer. While we were recording this, we were playing Anno 1800, the board game designed by Martin Wallace and published by Kosmos Games, didn't pay us anything to say that. They didn't give us a free game. We just love it. And it's about making stuff and trading it on ships. So I thought it was apropos, right? Right. Music in this episode by Epidemic Sound and the artist who I hope never puts a tariff on his crunchy beats, Chris Zabriskie Civics 101 is a production of NPR, New Hampshire Public Radio.