We have talked at length about the good and bad of tariffs in the past few weeks, but one of the questions we haven’t quite dived into is the one that perhaps deserves the most attention: What can actually be done to help you navigate increased costs tied to new duties and tariffs? The answer is, fortunately, quite a bit.

One of PCB’s most significant areas of growth and investment over the past few years is in our Trade Advisory Services department. For those who have not yet put those services to work, they are, essentially, the industry experts we have that set to work all the non-entry knowledge, experiences, and expertise we have earned over the past 70 years with the goal of improving your business in the international marketplace. These services are geared towards the task of making your business stronger when trading internationally. They are tried and true services that have been helping companies to thrive since their inception, but where they truly shine is at helping businesses become more efficient in the global market.

Our experts can help with a wide range of scenarios, including support with binding rulings, classification, valuation, and anything else that is not strictly related to Customs releases, but the one we would like to focus on today is Tariff Relief for importers in the US.

Tariff Relief is a blanket name for a suite of smaller services that are geared towards helping your business manage the costs of importing from another country, and depending on when exactly you are reading this, now is an opportune time to get to know these services intimately.

Relief at Last

For the purpose of illustration, let’s imagine a company, William’s Widgets. For the sake of example, let’s say they are based in the US and have been importing the materials needed to create their signature widgets from a company in the UK for 30 years, and during that time, their importing has been incredibly straightforward. However, the situation globally changes, and there are myriad reasons why this could happen; the cost of doing business with a UK company has just become significantly more expensive.

Perhaps new duties, an increase in the average tariff rate in the US, or restrictive regulations are introduced, and now the cost of doing business has gone up in a way that prohibits William’s Widgets from continuing business as usual. William’s Widgets is now looking for options and opportunities that will allow them to continue as they have in the past.

From the perspective of William’s Widgets, there are three options:

1. Find a way to make the relationship with the UK supplier work.
2. Find an international alternative supplier that can operate at a comparable cost.
3. Find a domestic company that can provide the same materials at a reasonable cost.

The last option seems attractive, but the challenge is that if this was financially viable, William’s Widgets would have been doing it already, and the cost of domestic widgets has likely only gone up since then. A popular question we get asked is ‘who benefits from a tariff,’ and the answer is, most often, the local suppliers, but unfortunately, not necessarily the business that’s been importing. This leaves us with options one and two, which, conveniently for this blog, are precisely the two scenarios Tariff Relief can help with.

Option 1 - Let’s Find a Cost Savings

If finding a whole new supplier in a different country is not a valid option, then it’s time to find alternative ways to save on costs as a means of balancing out the increased duty. To this end, our Tariff Relief services can help in a few ways, and they almost all have to do with reviewing or reexamining your current situation and making recommendations on ways to streamline those processes. Two of the key ways we can help include - 

HS Tariff Classification Review

This service is fundamental for importers of any tenure, and the odds are good that if you’re a regular importer, you’re already aware of what this entails. Still, there is a key difference between what a classification for an existing import looks like and one done with an eye toward tariff relief, and that difference comes down to changes to the character or composite of the good at the time of entry.

Typically, our classification services are used before the importation to ensure that your goods are correctly classified before arriving at Customs. The goal, in this case, is to avoid issues and challenges when crossing. Through this process, you discover what the goods are classified as and proceed with confidence from there.

With Tariff Relief, it’s slightly different. While it’s vital to understand that a good is what it is classified as, and there is no changing it at the Tariff Relief level, there are opportunities at the manufacturing level, and identifying these opportunities can be an invaluable tool. You are still getting a classification on your goods, but with an eye towards finding ways to change how your widgets are seen in the eyes of Customs. The goal is to identify things you can do to your goods, processes that can shift its classification, or ways to take advantage of preferential treatments under a free trade agreement to reduce its duty at Customs.

The goal here is cost savings, and Tariff Relief’s role in that is finding and highlighting legal and compliant tariff engineering opportunities for your business.

Registration and Utilization of Customs-Adjacent Support Services (ACH)

There are many programs that can help importers save money at Customs. From applying for duty drawback programs or utilizing reconciliations, there are many opportunities for importers at the Customs level that can go untapped - Tariff Relief can help you find the ones that will help reduce costs when it matters most.

By way of example, as a US company, William’s Widgets could benefit from the CBP Automated Clearinghouse (ACH). ACH is a way to control and predictably submit your payments to Customs and Border Protection (CBP) when paired with the Periodic Monthly Statement (PMS) program. While it may seem like that wouldn’t help you save money on your tariff reliefs, not only will this make your life as a US importer easier, but it also allows you to save on disbursement fees - which, in a high-duty environment, tends to rise in tandem with the increased duties.

The challenge with ACH and other programs like it is that registration can appear to be somewhat complex and time-consuming, and it can even feel like if you aren’t well-versed in what’s required, it might not be worth the time. Fortunately, the process is fairly straightforward and made doubly so with the assistance of our Tariff Relief team, who can help you quickly and effectively register in the programs that matter most to your business. We even, in most cases, offer additional assistance and reporting when it comes time to put programs like ACH to work. With these programs and our help, we can track the impact of your duties on your shipments and even help you avoid costly penalties.

Remember, William’s Widget’s doesn’t need to change its financial situation dramatically; it just needs to offset the new duties and tariffs so it can keep trading with its existing partners. Any cost savings towards this goal is going to be vital.

Option 2 - Eyes on the Horizon

If it turns out that trading with the UK is not a tenable outcome for William’s in the foreseeable future, then diversifying their supply chain while seeking out options abroad is the most effective and affordable way to keep those widgets moving. In this regard, Tariff Relief can help make a plan that makes this move more effective, even going so far as to earmark countries that could present the best rates.

Free Trade Agreement Review

Free trade agreements (FTAs) are a vital tool for importers of all shapes and sizes. There are many FTAs out there to take advantage of, and our Tariff Relief team can help indicate ones that could make sense for your business. If your goal is to find new trading partners abroad, this is a fantastic signpost for countries that are going to be a good match.

For example, our Tariff Relief team could examine William’s supply chain through the lens of viable FTA replacements and make recommendations for other countries like Japan or Australia that could be possible alternatives to the UK supplier that they have been priced out of. Even if the regulations that caused this market shift are temporary, being diverse in your supply chain is always going to be a good thing, and taking advantage of an FTA is a fantastic starting point for any business. With Tariff Relief, we can help get this process started.

Supply Chain Diversification

Building on that, one of the best value-adds Tariff Relief offers is Supply Chain Diversification. This service looks at a business’s current supply chain holistically, examining the current situation and determining areas of cost savings and inefficiencies that we can help address. Our team of freight forwarders and logistics specialists works with you to develop a supply chain strategy that keeps your costs down - particularly during moments of turbulence in the marketplace. 

For our widget maker, it could be finding new ways to transport or move the necessary goods across the country or to the new trading partners it established thanks to the FTA Review that could provide a cost savings or could provide a unique plan that, when combined with other elements of Tariff Relief, could set the company up for success in the long run. 

Tariff Troubles? Tariff Solutions.

There’s a lot more to Tariff Relief to explore, but it’s best explained by the very experts that make it work, so you’re encouraged to get in touch if you are looking for new options and opportunities. 

It is also worth mentioning that in an effort to demonstrate a point, these services within Tariff Relief have been split up, but they are all available to business entities that need them in a mixed and matched fashion. A company that is fighting a mounting list of US tariffs could seek to examine the options presented Customs adjacent services, and a business that wants to find ways to maintain the business relationship they currently have could find real value in supply chain diversification, it’s just to illustrate that no matter what your needs are - we have a service within Tariff Relief that can speak to it directly. 

In the end, our goal is always to keep your business importing as effectively and efficiently as possible, and your success is our success. For more information about what we can do for you, how to manage regulations and tariff rates in the US, or anything to help your business keep moving forward in the international marketplace, get in touch with our Trade Advisory Team today. We’re here to help find ways for your business to continue to thrive in the international marketplace.

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