Tariff Relief and Trade Agreements - How To Prepare for Change
Whether in the US, Canada, or anywhere in the world, when an administration changes, change often comes with it. That change can often manifest in the form of shifted international trade relations as newly elected officials pursue different priorities and push forward new ideas on how their nation fits into the world marketplace. For this reason, new tariffs, regulations, agreements, and shifting trade negotiations can be high on the political agenda.
If you’re looking for an example, here in North America, perhaps the most prolific and relevant to our immediate future is when NAFTA was renegotiated to become CUSMA/USMCA/T-MEC in 2020. Baked into that agreement is a mandatory six-year review, which is set to take place in July of 2026. However, the renegotiation of trade agreements is not the only thing that is shifting in North America in the months and years to come.
There have been renewed talks about increased tariffs for international trading partners in the US markets, the implementation of more sophisticated regulatory detection software like the new CBSA Assessment and Revenue Management system in Canada, and even new technology to confirm countries of origin. Taken together, and with a handful of new political regimes on the horizon, North America seems poised to enter a new season of change, and as an international importer, it behooves you to prepare for that change as best you can.
Flexibility is Key
One of the best things you can do for your international trade business is commit to a smart and adaptable logistics plan. Whether it’s prohibitive tariff increases, a renegotiated free trade agreement, or increasingly violent weather due to climate change, being able to adapt your supply chain stands apart as one of the foundational keys to bending instead of breaking when the deck is shuffled.
One of the most important things you can do during a moment of transition is lean on experts, and while it is the primary takeaway of this whole post, it’s particularly important when dealing with freight management. If you aren’t already, then working with a skilled freight forwarder should be among your top priorities as an international importer, particularly during a time of significant change in the marketplace. Not only can they provide practical advice about individual logistics challenges, but they are also often connected to an international network of agencies and companies that can help keep your goods moving in a way that is flexible and resilient no matter what might come.
Tariff Relief
In the immediate future, new tariffs and renegotiations or removals of free trade agreements (FTAs) seem highly likely, but that doesn’t mean that you don’t have options, particularly now with a bit of runway ahead of you. Working with an expert trade advisor on tariff engineering options, even during quiet moments in the marketplace, can be the difference of hundreds of thousands of dollars when you reach Customs. At the end of the day, if you are looking for the best ways to save money in the unpredictable landscape of trade, seeking the advice of someone who knows them well and has the up-to-date information to accurately review your imports stands apart as one of the best ways forward.
While not necessarily on topic, it’s worth pointing out that the impact of tariff relief on imports extends beyond looking ahead and finding solutions for new tariffs as they are introduced. They also look at all your imports as they exist currently and ensure that you are not already overpaying - an often overlooked but vitally important service.
Free Trade Agreements, Rules of Origin, and Classification
As previously alluded to, CUSMA/USMCA/T-MEC is due for review in a few year's time, and there is no way to know what will happen with that agreement before it happens.
Now, heading into a period of renegotiation, there are two potential camps in which international importers who qualify for an FTA can find themselves. The first is that you don’t know if your goods qualify for an FTA, and the second is that you don’t know if your goods will still qualify for an FTA after the renegotiation. Fortunately, there is a solution to both problems, and you can probably guess what it is by this point - You need to work with a trade advisor. Once again, expertise is going to be your most stalwart ally when going through these moments of dynamism in the international marketplace, particularly if you are hoping to move through them with more money than you started with.
In the case of free trade agreements, a tariff advisor’s role is even more involved. Not only can they help you identify the tariff classification of your goods, but they can help determine which FTAs make the most sense for your imports, provide tariff optimization opportunities, and serve as one of the ‘responsible officials’ needed as a certificate of origin requirement for trade agreements. A skilled trade advisor knows how to put an FTA to work for you and your business, and, once again, there is simply no replacement for expertise in this arena.
Technology and Customs Brokerage
While, indeed, political and social change are at the fore of most people’s minds these days, it’s important to point out that political and social change are not the only thing that demands a greater attention from international businesses.
While we will certainly dive deeper into this topic in the weeks and months to come, it’s worth mentioning here that change can also come in the form of technological advancements. Declaration software at Customs is moving forward at a fevered pace, and importers and Customs brokers alike are being tasked with keeping up. From the introduction of CARM in Canada, making errors in declarations incredibly transparent, to new guidance on isotropic testing being published by the CBP in the US to support country-of-origin certifications, everything is on the move, and many of the techniques and old ways of doing things are going to be obsolete in the next few years.
The better you have aligned yourself with the experts who understand these new systems and technology, who have made it their business to see what’s coming and help businesses prepare for it, the stronger a position your business will find itself in. Be sure to talk with your trade advisor about new tariffs and FTAs, but don’t forget to also ask about what else the future may hold for importers.
In the end, the big takeaway is that in times of significant change, politically, socially, or even technologically, expertise is going to become increasingly important when it comes to international trade, and in the days and years to come, it’s going to become essential that you align yourself with a trade advisor who understands your business and the world if you want to save more the border.
If you need a place to start, PCB’s Trade Advisory Team offers a full suite of services, including:
With our help, your business can be prepared for whatever the months and years ahead have in store. Get in touch today to get started!
