Discover how rising tariffs and NaNoWriMo’s closure impact authors in this Author Media update. Get insights and strategies to navigate these challenges and thrive as a writer.
Thomas: Welcome to Author Update! I’m Thomas Umstattd Jr. and today we are NOT going to talk about AI. Joining me as always is Jonathan Surger who is a Marine who helps authors find readers.
Tariffs (00:01:00)
Jonathan: On April 2nd, President Trump allowed tariffs to go into effect that are going to influence basically the entire world. The tariffs are minimum 10% and up, depending on what the government perceives as trade inequity with these other countries. The stock market has seen a precipitous decline in value. People are freaking out and screaming. Politicians are tweeting everywhere that the world is over.
Some Background on the U.S. Financial Situation
Thomas: The federal government is on the verge of collapse financially. There’s a $1.83 trillion deficit. That’s not the debt – that used to be the debt when I was a kid – but now that’s the deficit. What that means is every year we’re spending $1.83 trillion more than we’re bringing in. The debt is currently $36 trillion, with a federal income of only $5 trillion.
Let’s imagine that we balance the budget, close the $1.83 trillion deficit, and then set aside 10% of our revenue to pay off the debt. How long would it take to pay off the debt? 73 years – my entire lifetime, and that’s assuming we acquired no new debt and consistently set aside 10% of every annual budget.
This is the sort of thing that destroys empires, and it can happen very quickly. People who buy the debt, if they lose confidence in the debt or in the country, will demand a higher interest rate to compensate them for the risk. That higher interest rate makes the debt harder to pay off, creating a cycle that can completely spin out of control.
A hundred years ago, Argentina and the United States were at parity economically. We were very similar ethnically and in natural resources, but the United States stayed fiscally responsible while Argentina let their debt get out of control. They’re still trying to fix it to this day and never recovered as a country.
Governments don’t just go bankrupt – sometimes they also collapse. If the United States collapses, the whole world goes to war. So the current administration has this big mandate to fix the debt and deficit, but Trump promised not to touch Social Security, Medicare, or Medicaid, which means he’s got to find revenue somewhere else.
Corporate Taxes and Tariffs
For the last 30 years, the United States has had one of the highest corporate tax rates in the world. A company like Apple would’ve had to pay 35% tax on its operations in the United States, but zero tax from the U.S. government if it moved to China. There was this huge incentive to move operations anywhere other than here.
Our tax system was broken because it put American companies at a disadvantage. If I’m an American company trying to compete, I’m having to pay a 35% tax while the company I’m competing with doesn’t have to pay that tax or a tariff to bring their goods in, and potentially has cheaper labor and fewer regulations.
The goal with this new tariff system is to reverse that – to punish companies operating abroad and reward companies operating locally. Trump started this process in his last term when he lowered the corporate tax rate from 35% to 21%. Now he’s raising the tariff rate up to 10% (and higher for some countries) to balance that.
Once the tax rate is lower than the tariff rate, the theory is that companies will start moving operations back to the United States. We’re already seeing this – Apple has committed to spending $500 billion building factories in the United States because they don’t want to pay these tariffs.
Jonathan: What effect does the Value Added Tax (VAT) have? Doesn’t that actually behave as a tariff?
Thomas: It does, and I have personal experience with this. When I sell a course to somebody in Europe, they have to pay a VAT tax on their purchase from me, an American company. This makes them very angry because VAT taxes are normally hidden in Europe – they’re included in the price. I had to lower the price specifically for Europeans, and I ate that tax effectively.
What we saw with the first round of Trump tariffs was that for the most part, companies actually eat the tariffs. There’s the theory that they pass the tariffs along in higher prices, but that’s not what happened last time. These companies just ate the tariff and reduced their profit margins, which is why Wall Street is freaking out.
If you’re a big multinational corporation, a trade war is a very scary thing. If you’re a local, small business, it’s really good news for you.
Unintended Consequences
One of the unintended consequences of punishing American companies for operating in the United States and rewarding them for operating abroad is that those American companies care a lot about the politics of those other countries. The scariest word is “instability.”
If I have a factory in a country, the last thing I want is instability. So there’s a huge financial incentive for America to deploy blood and treasure to stabilize other places far away because our companies are operating in those places.
Jonathan: That’s why we’re always in the Middle East trying to replace dictators – oil. The whole world runs on this fuel, so we will absolutely protect this source and send people to fight for it. It all has to do with the markets.
Impact on the Markets
Thomas: There’s panic in the stock market right now. This needed to happen because many stocks were overvalued. There’s this concept of a PE ratio (price to earnings ratio) – the value of the company compared to how much money they’re actually making. Warren Buffett likes to invest in companies with a PE ratio of around 15 or 16, but most companies in the stock market before this crash had a PE ratio of around 27.
The top of the market was actually the day before Deep Seek was released. Deep Seek showed that there was a way of doing AI without spending crazy money on chips, which meant companies wouldn’t need to spend as much on Nvidia’s fancy chips. That was actually the top of the market, and now we have more things accelerating the decline.
Another interesting effect is what’s known as a “flight to safety.” In a rough market, investors sell stocks and buy bonds. We have trillions of dollars leaving the stock market and entering the bond market, causing bond yields to go down. This means the United States can refinance its debt at a lower rate, which is actually good for the government.
Resources:
- The Effects of Tariffs on the Printing Industry: Results of a PRINTING United Alliance Survey
- The Book Business Prepares for Tariff Turmoil
Impact on Authors (00:14:00)
American printers source 67% of their paper from Canada, which means the cost of paper is going to go up. This will hit traditionally published authors harder because they make a much greater percentage of their revenue from paper books. Indie authors aren’t going to be that affected because most make the majority of their money from audio or ebook sales, which aren’t going to be affected.
The other big impact is on book printing. If you’re traditionally published, especially if you’re a bestselling author, a big percentage of your income comes from paper books printed in China. China has the best, most sophisticated printing, and we’re looking at an increase in wholesale costs of around $1 per hardback book for books printed in China.
This is money moving from the wealthy to the poor. If you’re a beginning indie author selling mostly to Americans, this is good news. If you’re a New York Times bestselling author selling abroad with books shipped from China, this is bad news.
Long-term, this could lead to more and better US-based printing, which is really good for indie authors who lack the capital or sophistication to go to China.
The Send Your First Email Challenge Starts Monday (00:18:00)
Thomas: The send your first email challenge is a mini-course where over the course of five days, we’re going to start an email newsletter, create a landing page, get your first subscribers, write your first email newsletter, and send your first email newsletter. It’s about 30 minutes a day, and we’re all going to do it together. The first day is on Monday, and it’s completely free to sign up at firstemailchallenge.com.
Jonathan: Do I have to have a book done to participate?
Thomas: No, in fact, you want to start building your email newsletter way ahead of when your first book comes out, because you need to have a list of subscribers who are excited to buy your book so you can have a strong launch.
Jonathan: The worst thing, from experience, is releasing the book you wrote to no one. Definitely get in on the email challenge now so there’s an audience ready to receive the thing you’ve dumped your heart and soul into.
NaNoWriMo Closes Its Digital Doors (00:23:00)
Jonathan: NaNoWriMo is a nonprofit that started in 1999 (becoming a nonprofit in 2005). The idea was to help authors write 50,000 words over the month of November. This past week, the interim executive director, Kilby Blades, released a YouTube video announcing the shuttering of the nonprofit.
For four of the last six years, they’ve had six-figure debt. The only years they were in the black were 2020 and 2021 when they took SBA loans. Fundraising was cratering due to several problems. In 2021, they realized they weren’t vetting volunteers who were mentoring children on the platform. Against state regulations, these mentors didn’t have background checks. One volunteer appeared to be grooming children, and NaNoWriMo sat on this warning for months.
Then in 2023, they came out with a weird AI policy that didn’t really take a strong stance because many of their sponsors were AI companies. This killed their base.
Thomas: About 10 years ago, NaNoWriMo started going woke. They started pushing pro-abortion messaging inside the community and requiring DEI trainings. They didn’t require child safety trainings, but they did require critical race theory trainings. They started being really exclusionary, basically saying “if you don’t agree to DEI, you’re not welcome here.”
One result of that push was that conservatives, who often donate to things they support, left quietly. Donations started to go down. They also let their costs get out of control with a million-dollar budget. NaNoWriMo can happen with just a Twitter account – it’s just authors writing a novel in a month.
If you want to write a novel in November, you can still do that. There’s Author Media Social, where people post about writing during NaNoWriMo. We used to really push NaNoWriMo in the first version of Book Launch Blueprint, but because of all the political stuff they got into, we stopped emphasizing the organization and more just encouraged writing generally.
NaNoWriMo helped create the habit of writing and helped people realize how fast they could write. It was particularly challenging because November has Thanksgiving right at the “quit week” – two-thirds of the way through. If you survived and hit your 1,600 words every day throughout November, you emerged a changed person who felt capable of continuing to write.
Pro tip: If you want to be traditionally published, don’t pitch an agent or editor in December. The slush pile is huge from NaNoWriMo writers, and acquisition boards often don’t meet during the second half of December.
Books.by—A Scam? (00:31:00)
Jonathan: Kevin Duncan from Kindlepreneur took a deeper look at books.by to see if this is a direct sales tool authors could get value out of. His opinion? A weak maybe.
The service doesn’t do hardcovers, ebooks, or audio, which seems strange since digital products should be easy to fulfill. They only ship to the US, Canada, UK, Australia, New Zealand, or Europe. The website doesn’t have a terms page or an about page.
The founder is Ash Davies, who founded Tablo, a hybrid publisher that authors have been unhappy with. They have very high printing costs – a book that would cost $4 from Book Vault winds up costing $6 from books.by. That really hurts once you start selling more books.
Thomas: If you do the Novel Marketing method using what I recommend, you’re using Book Vault, which costs $4 rather than $6, and you’re using PayHip, which is $0 a year. PayHip only takes money when you make money – it’s not like Shopify, which is $360 a year, or books.by, which is $100 a year.
I don’t recommend books.by. What I would recommend is having your own website, using PayHip, and printing with Book Vault. I have a whole episode with the CEO of Book Vault – I really like their approach and transparent pricing.
Narnia Audio Collection Is $6 On Chirp (00:35:00)
Thomas: There are places to buy audiobooks that aren’t Audible. The number one competitor is Chirp, and right now you can get the entire collection of all seven unabridged Narnia audiobooks for $6 total. You just have to promise me that if you click on this link, you’ll read “The Lion, the Witch and the Wardrobe” first, because that is the first Narnia book. There is no other ordering of Narnia books.
Latest Hunger Games Novel a Best-seller (00:36:00)
Jonathan: Suzanne Collins’s latest Hunger Games novel, “Sunrise on the Reaping,” has sold twice the copies of her last Hunger Games title, released in 2020. It has 21,000 reviews on Amazon with a 4.8 star rating, and 198,000 on Goodreads with a 4.7 star average, which is stellar for that site. It’s number one on all of Amazon, and they’re projecting that it’s sold about 1.5 million copies so far.
This is an unqualified, massive success, which is strange considering it’s a prequel to an already finished series. It’s about Haymitch, a popular side character from the original series. In her about section, Collins says she’s continuing to explore the effects of war and violence on those who are coming of age.
Thomas: I haven’t read the book yet, but I did very much enjoy the original Hunger Games series. The first book particularly is a masterpiece – a great exploration of things that can be done by playing with point of view and tense. The original books are in first-person present tense, which allows Collins to explore the effects of PTSD. Katniss starts experiencing PTSD and becomes less and less of a reliable narrator as she experiences more trauma. This is lost if you only watch the films, which use an omniscient camera-eye view.
Amazon Sends Invites to Beta Audio Program – And So Do Scammers (00:40:00)
Jonathan: Amazon has a new AI audio program where they’ll give an AI narrator to your book if it’s in KDP Unlimited. This is a beta program they’ve been sending invites out to authors.
However, there are scam emails going out which look exactly like the KDP email, but when you click on the link, it sends you somewhere dangerous to steal your information. Thomas, how can authors protect themselves from these upgraded phishing attempts?
Thomas: One simple thing is to always check the domain. Amazon.com always uses amazon.com (or the appropriate country domain). Scammers will often have some strange website that includes those words, but it’s not the actual domain.
I have a whole episode on this called “Cybersecurity for Authors.” If you’re following my practices, specifically using a password vault like 1Password.com, you’re protected in an interesting way. One Password will not insert your password for a website on a different website. When you go to the dropdown to insert your password, if it doesn’t show you any options, that’s a big red flashing light.
The other way to protect yourself from scams is to watch your emotional state. Scammers often play on either fear or greed. What’s insidious about this particular scam is that it’s playing on impatience – “Hey, this thing you’ve been waiting for, that you’ve been feeling left out of, you now have this opportunity.”
I recommend having 1Password and using a different password for every website.
If You Have News, Send It In!
Jonathan: If you find news somewhere, let us know about it either on Author Media Social or by email. If we pick your story, we’ll credit you on the stream.
Thomas: We’ll not just shout out your name – we’ll also mention a book you’ve authored if you have one, and your website.
Closing
Thomas: Thank you for listening to the Author Update, and we will see you next week. Your weekly dose of “you’ve got this” with a side of publishing news.
