Unpacking the trade & tariff turmoil

Ensure you fully understand the origin and classification of goods from the perspective of their destination, be it the US or other markets. Understand the tariffs that may apply to your products in each of the destination markets.

Evaluate your supply chains to identify dependencies on US imports and exports as well as possibilities to reduce any duty impact by reevaluating your current supply chains. Diversifying can help reduce vulnerability to tariff impacts.

Various customs procedures may be leveraged to minimize the impact of customs duties. Well-established procedures like bonded warehousing, inward processing, free-trade zones and duty drawbacks may help to achieve savings and minimize duty costs.

However, there are also less known opportunities that should be explored, like the First Sale for Export rule that may help reduce US duty costs by declaring to US customs the price paid in the “first or earlier” sale in the supply chain, rather than the final price paid by the importer.

Besides specific customs procedures, there are various other mitigating actions that may help to limit any customs impact, including revisiting pricing arrangements by cost unbundling or an alternative transfer pricing set-up.

Keep abreast of ongoing negotiations and potential changes in trade policies. While legislative measures may be imposed in the short term, strategic actions should have a long-term vision while remaining flexible to the rapidly changing tariff environment.