US Import tariffs – Update

In our recently published article, you can read about the situation as it applied earlier this week. As the import duties are subject to rapid changes, it becomes clear that we deal with a dynamic trade environment that can have direct consequences for your international supply chain.

How to prevent or mitigate negative impacts on your business

Considering that the new regulations are implemented in the existing customs legal frameworks, we encourage all businesses to look closely at their customs processes and supply chains.

There might be room for topics and optimization in classification (the legal practice of tariff engineering). As an example: certain components imported separately, may fall into a different tariff provision than the finished product and may thus avoid a higher tariff.

If tariff optimization is not possible in your business, it might be possible to optimize your country of origin. This might work for products with multiple components sourced in different countries. These rules differ from product to product and need careful attention. Note, that more than 150 products originating from China remain eligible for exclusions or exemptions.

Other strategies to mitigate the impact of the announced higher tariffs are to be found in customs valuation / making use of the first-sale-rule or other possibilities to lower the customs valuation of the product upon import. This is obviously closely connected to your Transfer Pricing policies. Finally there are possibilities in duty deferral or draw back.

At Forvis Mazars, we closely monitor these volatile developments and are ready to help you manage their impact on your operations. Whether it involves strategic adjustments to your supply chain, leveraging exemptions, or anticipating future changes, we are here to support you.