Tariff & Customs Regulations Specialists

April Newsletter | Court Orders Refunds. Importers Must File Claims.

Tue, 07 Apr 2026 16:07:09 GMT

TOP NEWS:
IEEPA Tariff Refund Update: What Importers Need to Know Now

The U.S. Court of International Trade (CIT) ordered refunds of IEEPA tariffs (including reciprocal tariffs) following the Supreme Court ruling that those tariffs were unlawful. The court has paused immediate refunds when CBP demonstrated that its systems could not handle the volume—over $165 billion across ~53 million entries.

Currently, CBP is developing a new automated refund system called CAPE (Consolidated Administration and Processing of Entries) within ACE. The system includes four components: a claim portal, mass processing engine, review/liquidation module, and refund module. As of late March 2026, development progress ranged roughly from 45% to 80%, with the refund function about 60–63% complete and undergoing testing.

Recent court updates have expanded the scope of eligible entries—including some previously finalized entries—but refunds remain suspended until CAPE is operational. Importers will need to submit claims (not automatic refunds), and payment will be issued electronically after validation, liquidation/reliquidation, and interest calculation. Timing remains uncertain and dependent on system readiness, with further CBP updates required by the court.

MORE TARIFF NEWS:

Steel, Chips, Solar, and Autos: America's Next Trade Fight Is Here

In 2026, the United States launches a new Section 301 investigation, sounding the alarm over a growing global imbalance: too much production, too much subsidy, and too little fair competition. Policymakers argue that some countries are fueling excess manufacturing—propping up industries, distorting supply and demand, and generating large trade surpluses that squeeze U.S. producers out of key markets.

The investigation spans 16 economies across Asia, Europe, and beyond, reflecting how widespread the issue has become. At the center are critical industries that shape the future of the global economy—steel and aluminum, automobiles, semiconductors, batteries, solar modules, and advanced machinery like robotics and shipbuilding.

As the process unfolds, public hearings begin in May 2026, opening the door to potential actions. Negotiations may ease tensions—or escalate them. Trade remedies and new tariffs loom as real possibilities.

What’s at stake is bigger than a single dispute. The outcome could reshape global supply chains, raise tariffs, spark trade conflicts, and intensify pressure on U.S. manufacturing. In short, this investigation isn’t just about trade policy—it’s about who leads in the industries of tomorrow.

Your Tech Platform Can't Do This. Only a Licensed Broker Can.

CBP recently issued a ruling as to whether a foreign, unlicensed company operating an online platform for importers was impermissibly conducting “customs business” under 19 U.S.C. § 1641 and Part 111 CBP Regulations. Specifically, CBP evaluated four services:

connecting importers with licensed brokers,
using OCR tools to extract entry data from documents,
providing AI-generated HTSUS classification suggestions, and
submitting CBP Form 5106 on behalf of importers.

CBP held that not all platform activities constitute customs business, but several do. Merely connecting importers with brokers and transmitting data is permissible if the company does not participate in decision-making. However, CBP determined that the company impermissibly conducted customs business when it:

Used OCR tools to identify and prepare entry data,
Provided HTSUS classifications beyond the six-digit level tied to actual imports, and
Completed and submitted CBP Form 5106 for importers.

This ruling draws a clear boundary: technology platforms may facilitate communication and data transfer, but cannot perform or influence core customs functions reserved for licensed brokers. Activities involving data determination, classification tied to entry, or preparation/submission of CBP forms require a broker’s license, regardless of automation or AI involvement. This is confirmation from CBP that it is critically important that all companies use an experienced and reputable licensed customs broker when conducting business with CBP.

ITM is paying very close attention to all of these developments and will continue to relay information as it becomes available.

GET STARTED HERE

March Newsletter | IEEPA Tariffs Ruled Illegal — What Importers Must Do Now

Tue, 03 Mar 2026 12:00:14 GMT

TOP NEWS:
Supreme Court Strikes Down IEEPA Tariffs — CBP Stops Collections

On February 20, 2026, the U.S. Supreme Court ruled that the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad reciprocal tariffs exceeded executive authority and was illegal, because IEEPA does not authorize tariffs.

While the President signaled resistance, he did sign an executive order on February 20th directing the heads of the relevant executive branch agencies to cease collection of IEEPA tariffs. As of February 24, 2026, U.S. Customs and Border Protection (CBP) has stopped collecting tariffs under the now-invalid IEEPA authority.

Important to note is that the Court’s decision has no impact on existing tariffs imposed under Section 301 of the Trade Act of 1974, or the tariffs imposed under Section 232 of the Trade Expansion Act of 1962. These include the tariffs on steel, aluminum, copper, automobiles, auto parts, lumber and timber, medium- and heavy-duty trucks, and semiconductors and remain in effect.

STILL PENDING:
CBP Owes You Money. Here's How to Be Ready.

Now that the reciprocal tariffs imposed under emergency authority have been legally struck down and collections have been halted, importers that paid the duties are now considering refund claims. The Supreme Court did not address how refunds would be issued and that decision rests with the United States Court of International Trade. Currently there is no clarity on that process or the timing.

Some believe CBP might simply reverse course and automatically return all collected duties. While that’s possible, refunds are rarely that simple. Given the complexities involved, CBP might rely on its established refund mechanisms. Fortunately, those mechanisms already exist—namely post-summary corrections and protests.

While businesses understandably want immediate refunds, no formal process has yet been announced. Filing protests on liquidated entries now may prove unnecessary, depending on the refund framework CBP ultimately adopts. Recent case law suggests that delays in establishing administrative procedures do not necessarily affect eligibility for refunds, meaning some protective protests could ultimately be unnecessary.

So what can you do while we wait for guidance from CBP?

Start by identifying all entries with a Chapter 99 classification tied to an IEEPA tariff program where duties were paid. As you review, confirm that each entry is accurate in terms of tariff classification and country of origin. Corrections in these areas could materially affect duty liability once IEEPA tariffs are lifted.

Accuracy in classification, valuation, and origin becomes especially important at this stage. After an IEEPA refund is processed, these data points will determine the duties owed under other applicable tariffs within the stacking framework.

Seeking a refund may require filing a protest and that process involves submitting the entry summary, commercial invoice, customs invoice, and bill of lading. As part of your data-gathering efforts, ensure your record-keeping systems can quickly retrieve these documents .

MORE TARIFF NEWS:

IEEPA Is Out. Section 122 Is In. Here's What Changed.

In immediate response to the Supreme Court ruling, on February 20, 2026, the President issued a proclamation to impose new 10% global tariffs under Section 122 of the Trade Act of 1974.

The Section 122 tariffs went into effect at 12:01 a.m. EST on February 24, 2026, and are limited by statute to remain in place for 150 days (through July 24, 2026), unless extended by Congress. While initially announced at 10%, reports indicated there are plans to increase the rate to 15%.

Imported goods subject to the Section 122 duties will be classified under new Harmonized Tariff Schedule of the United States (“HTSUS”) Subheading 9903.03.01. New subheadings 9903.03.02 through 9903.03.11 will be used to declare various exemptions from the tariffs.

Imports exempt from Section 122 duties include qualifying goods under the United States-Mexico-Canada Agreement (“USMCA”) as well as products detailed in the proclamation, which mirrors the exemptions that were already in effect for tariffs imposed pursuant to the IEEPA tariffs. These include but are not limited to: certain critical minerals, energy and energy products, natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States, certain agricultural products, pharmaceuticals and pharmaceutical ingredients, certain electronics, passenger vehicles and other designated vehicles and certain aerospace products.

It is important to note that drawback is available for the duties imposed pursuant to Section 122.

ITM is paying very close attention to all of these developments and will continue to relay information as it becomes available.

GET STARTED HERE

Jewelry TV Sees a 50% Reduction in Drawback Workload

Tue, 17 Feb 2026 19:18:21 GMT

This case study demonstrates how the right Drawback partner results in less work and better results.

The Challenge:

Jewelry Television, a leading retailer with a vertically integrated operation based entirely in Knoxville, TN, faced a daunting challenge: navigating the complex world of duty drawback for their international jewelry imports and exports. With over 1,000 employees and a global supply chain, JTV needed a reliable way to recover duties on returned or re-exported merchandise.

Paul Goodale, Director of Procurement, took on the task with limited knowledge of duty drawback. Despite his background in supply chain and logistics, the process proved to be more intricate than anticipated. Early partnerships with drawback providers were disappointing—one partner delivered minimal results, while another abandoned the project after a year and a half, citing the jewelry category as too tedious and labor-intensive.

The Solution:

After extensive outreach to industry contacts, Paul was repeatedly referred to International Tariff Management. JTV partnered with ITM, and the transformation began.

From the start, ITM’s hands-on approach and deep experience with Customs and Border Protection (CBP) made a significant difference. ITM helped JTV overcome previous setbacks, streamline their documentation process, and begin filing claims every two to three weeks. The partnership quickly proved to be more efficient and far less labor-intensive than previous attempts.

ITM worked closely with Paul and his team to:

Simplify the documentation process: JTV’s RTV (Return to Vendor) department provided export paperwork, which Paul matched with import documentation and sent to ITM.
Ensure compliance and accuracy: ITM’s team, especially Doug, provided quick feedback and helped resolve any discrepancies.
Catch up on backlog: JTV was able to get nearly all historical exports processed, avoiding losses due to the five-year eligibility window.
Maintain ongoing filings: With a smooth system in place, JTV now submits claims regularly and efficiently.

The Impact:

50% reduction in workload for Paul compared to previous partners.
Consistent drawback filings every few weeks.
Near-complete backlog recovery, maximizing refund potential.
Improved internal processes and reduced friction with CBP.
Strong partnership with ITM, including direct access to leadership and responsive support.

The Takeaway:

ITM Handled the ‘Hard’ Categories
Previous partners walked away from jewelry.
Simplified Documentation with ITM
Rapid, Responsive Support from ITM
Direct access to ITM’s team for quick discrepancy resolution.
ITM's 40+ Years of CBP Relationships
Less friction, faster approvals, fewer headaches.
ITM Submitted the Backlog Before It Expired
Near-complete historical recovery before the 5-year window closed.

Paul's Story:

GET STARTED HERE

How PEM America Found $100K+ They Didn't Know Existed

Wed, 04 Feb 2026 14:28:30 GMT

This case study demonstrates how companies can capitalize on duty refunds for goods imported into the U.S.

The Challenge:

PEM America, a leading importer, distributor, and manufacturer of top-of-the-bed textile products such as quilts, comforters, and pillows, sells to major department stores across the U.S. Most of their products are manufactured in China and subject to significant duties. Despite exporting products, PEM America had no system in place to recover duties, leaving substantial funds unclaimed.

The Solution/Impact:

Hundreds of thousands of dollars recovered within just a few months.
Immediate improvement in cash flow and profitability.
Unlocked what Ed Greenberg calls an “overlooked cash reserve,” providing PEM America with funds that would have otherwise been lost.

The Takeaway:

Importers often pay duties without realizing they can recover significant amounts. If you’re not leveraging a duty recovery service, you may be leaving a lot of money on the table. Partnering with experts like ITM ensures compliance and maximizes financial returns.

GET STARTED HERE

Don’t Wait to Prepare: IEEPA Tariff Readiness for Importers

Tue, 27 Jan 2026 12:15:00 GMT

What Importers Should Be Doing Now

As we wait patiently for the Supreme Court to render their decision on the legality of the IEEPA tariffs, there are steps that importers should be taking now to prepare for if they are deemed illegal.

If the court upholds the lower courts’ decisions and rules that some, or all, of the IEEPA tariffs are unlawful, the United States should theoretically stop collecting these duties on future entries, but that is unknown at this time. Additionally, the court may not require U.S. Customs and Border Protection (CBP) to issue refunds to any importers other than the parties directly involved in the litigation, and CBP may not choose to refund duties to non litigants on its own. Regardless of the parameters associated with the decision, it is important that importers take the following immediate actions:

Assemble and maintain complete records for all entries subject to IEEPA tariffs

Request from your broker or create a spreadsheet including:

Entry number
Entry date
Country of origin
Tariff classification and product description
Type and amount of duties paid
Projected liquidation date

Keep hard or PDF copies of all entry documentation (CF 7501 entry summaries, commercial invoices, packing lists and bills of lading).

Protect your ability to obtain a refund

Monitor liquidation dates:

Entries generally liquidate (become final) 314 days after entry.
The earliest entries subject to IEEPA tariffs may have begun liquidating around mid December 2025.

If a liquidation date is approaching, consider requesting that CBP extend liquidation:

An extension keeps the entry open while litigation is pending.
Note: Extensions are discretionary, and CBP has historically not granted them solely due to pending litigation.

If the court does strikes down the IEEPA tariffs, refund procedures will depend on liquidation status

For unliquidated (open) entries:

Submit post summary corrections (PSCs) to remove IEEPA duties.

For liquidated (closed) entries:

File protests challenging the IEEPA duties no later than 180 days after liquidation.
If CBP denies the protest, file a summons with the US Court of International Trade within 180 days of the denial.

It is important that importers set themselves up now to react in an immediate manner should the Supreme Court determine that the IEEPA tariffs are illegal. Please reach out to ITM if we can be of any help as you protect your ability to obtain a refund!

GET STARTED HERE

$450K Breakthrough: The Power of Proper Classification Goes Straight to the Bottom Line

Mon, 19 Jan 2026 21:20:51 GMT

This case study demonstrates how proper classification can impact duties paid on electronic goods imported into the U.S.

The Challenge:

Infinite Objects, a company that creates collectible video prints, was importing hardware from China and facing steep import costs. Their products were subject to a 25% China tariff plus standard duties, resulting in an effective duty rate of 27.6% . This significant tariff burden was cutting into margins and limiting resources for growth and innovation.

The Solution:

Through a referral, Infinite Objects engaged International Tariff Management (ITM) to review their product classifications. ITM conducted a detailed analysis and confirmed that the company’s products qualified for a duty-free classification with only a 7.5% tariff rate . ITM then managed the protest process for previous entries and guided Infinite Objects in updating their classification for future imports.

The Impact:

Refunds Approved: Over $50,000 already received, with another $50,000 pending.
Future Savings: Since changing the classification, Infinite Objects has saved $350,000 in tariff costs.
Total Benefit: More than $100,000 in refunds and ongoing savings of 20% on every future import.
These savings have been transformative , allowing Infinite Objects to reinvest in expanding their artist base and creating new products.

The Takeaway:

If you’re unsure about your import classifications, you'll need expert advice. Even small errors can have massive financial implications. Start by researching rulings in the CBP database, but ultimately, consult professionals like ITM to ensure compliance and maximize savings.

GET STARTED HERE

January Newsletter | Trade Alert: OBBBA, SCOTUS, Enforcement Surge

Tue, 06 Jan 2026 17:04:23 GMT

TOP NEWS: OBBBA Legislation

The proposed One Big Beautiful Bill Act (OBBBA), which has passed the House, seeks to narrow the scope of drawback eligibility for the tobacco industry, specifically addressing the "double drawback" issue where companies allegedly receive refunds on excise taxes they never paid on exports. As of early 2026, the bill's final status in the Senate is a major point of discussion in the trade community.
[Read our analysis of the Supreme Court case →]

STILL PENDING: Supreme Court Decision

Importers are challenging the legality of the reciprocal tariffs and we are all still awaiting the determination by the Supreme Court of the United States. A decision is expected sometime in 2026, the hope is sooner rather than later.

[Track the history of reciprocal tariff challenges →]

DID YOU KNOW: Section 232 & Drawback Opportunities

The scheduled 2026 tariff increases (from 25% to 30% or 50%) on upholstered wood products, kitchen cabinets, and vanities under Section 232 were postponed until January 1, 2027, through a December 31, 2025 proclamation. The current 25% rate remains in effect for these items.

Existing reciprocal tariffs and most Section 232 duties continue to be eligible for duty drawback, offering significant opportunities for businesses to recover costs, especially in the context of high import fees.

[Start recovering your duties today →]

MORE TARIFF NEWS: 2026 Enforcement Surge

2026 is being characterized as "the year of enforcement for customs and tariff-related matters," following the U.S. Department of Justice's (DOJ) formation of a trade fraud task force and increased funding for Customs and Border Protection (CBP). Companies are advised to ensure robust, risk-based compliance programs are in place to navigate a complex international trade environment.

[How to avoid tariff evasion penalties →]

GET STARTED HERE

2025 in Review: A Year of Change and Vigilance

Tue, 09 Dec 2025 15:27:43 GMT

Reciprocal Tariffs in Flux

It has certainly been an eventful year in the tariff world. 2025 began with the promise and the introduction of sweeping, high tariffs on nearly all imports. While there was a transition to a two-tiered system including broad tariffs and country-specific rates, the mid-year brought pauses, renegotiations, and recalibrations. The fall included more strategic trade-deal frameworks and by year end we have seen major exemptions (especially food/agriculture), put in place to try and ease the impact on U.S. consumers.

Many of the new tariffs were deemed drawback-eligible but the legality of them remains under scrutiny. As we await the Supreme Court’s decision, the future of the reciprocal tariffs and their recovery through duty drawback remains uncertain. ITM continues to follow the situation and we are ready to guide all our existing and new clients as we navigate this ever-changing landscape into 2026.

CBP Audits Surge 50%

As promised, CBP has significantly increased customs audits in 2025. Early in the year, audits surged, uncovering numerous instances of improperly declared or undervalued goods. By mid-year, duties and fees identified through audits had risen sharply compared to 2024, signaling stricter enforcement and less tolerance for compliance failures.

According to sources, CBP's audits increased by more than 50% by April 2025 compared to the entire fiscal year of 2024. In August, a new Trade Fraud Task Force was established, focusing on misclassifications and compliance issues.

CBP has made it clear that enforcing new tariffs and ensuring compliance with trade regulations are top priorities. As enforcement continues to tighten, it’s critical for all importers to fully understand the requirements and ensure compliance to avoid the consequences of noncompliance. The audit process will only intensify, so it’s more important than ever to be prepared.

Our Commitment to Your Success in 2026

As we bid 2025 farewell, we at ITM would like to express our sincere thanks and appreciation to all our clients, colleagues, and friends. We wish you all a happy and healthy holiday season and look forward to continuing our relationships into the new year!

From Complexity to Clarity: Sandeep Diamond’s Duty Drawback Success Story

Fri, 14 Nov 2025 17:19:44 GMT

This case study demonstrates how companies can claim duty drawback on goods imported into the U.S.

The Challenge:

Sandeep Diamond Corporation, a leading manufacturer of high-quality bridal jewelry in India, sells to some of the finest retailers in the United States. While importing their products, the company paid significant customs duties on commodities. They discovered they were eligible for duty drawback—a refund of duties paid on imported goods—but the process was complex and involved a substantial amount of expertise. Handling this internally would have been an arduous and time-consuming task.

The Solution:

A trusted referral led Sandeep Diamond Corporation to International Tariff Management (ITM). ITM’s expert, Jay Charkow, explained the duty drawback process in detail and guided the company through every step. ITM managed the entire process—from initiation to filing the first claim—ensuring all documentation was properly prepared and submitted to U.S. Customs. Their team streamlined the workflow, making the experience seamless and efficient.

The Impact:

Within several months, Sandeep Diamond Corporation received its first refund check from U.S. Customs. The partnership with ITM not only recovered a voluminous amount of dollars but also saved the company significant time and effort. The process was smooth, transparent, and handled by professionals who were easy to work with.

The Takeaway:

For companies that manufacture products overseas and import into the United States, working with specialists like International Tariff Management can unlock substantial financial benefits. ITM’s expertise in duty drawback ensures compliance, accelerates refunds, and eliminates the complexity of navigating customs regulations.

GET STARTED HERE

SCOTUS to rule on Reciprocal Tariffs | Newsletter: November 2025

Tue, 04 Nov 2025 12:00:22 GMT

TOP NEWS

Oral arguments are scheduled to begin this week with the Supreme Court in regards to the Reciprocal Tariffs. Starting Wednesday November 5, 2025, the Court will consider issues including: separation of powers (Congress vs President in tariff setting), scope of IEEPA (what “unusual and extraordinary threat” means), and whether the major questions doctrine applies (i.e., big policy decisions by executive branch need clear congressional authorization).

If the SCOTUS rules the tariffs illegal, the tariffs would be invalidated, potentially requiring refunds for duties paid (though the extent, timing and who gets refunds remain very uncertain). If SCOTUS upholds the tariffs, it would affirm significant executive-branch authority to impose broad tariffs under IEEPA (or similar statutes) which could reshape trade policy.

The timing of the decision would ordinarily be expected by late spring or early summer 2026, but the SCOTUS has indicated that they will expedite a judgement which legal commentary would expect likely before the end of 2025.

DID YOU KNOW…

President Trump issued a proclamation imposing new Section 232 tariffs, which took effect on Nov. 1st, on imports of medium- and heavy-duty trucks, truck parts, and buses. Additionally, a 10% tariff has been imposed on imported school, transit, and motor coach buses.

A 25% tariff now applies to Class 3–8 trucks (e.g., large pickups, cargo trucks, dump trucks, tractors) and key parts such as engines, transmissions, tires, and chassis. Vehicles qualifying under the USMCA will only be taxed on non-U.S. content but noncompliance or overstated U.S. content could trigger the full 25% tariffs on all similar imports by that importer.

There is a domestic incentive for truck manufacturers assembling in the U.S. between Nov. 1, 2025 – Oct. 31, 2030. They can earn a 3.75% tariff offset, which can reduce duties on imported parts. A similar offset applies to engines and has been extended to auto manufacturers through 2030.

MORE TARIFF NEWS

A “framework” agreement was announced in late October between the U.S. and China. It is important to note that the October 25, 2025 date marks the beginning of the talks and not the final, fully signed treaty. Several sources have called the outcome a “framework” or a preliminary agreement, not a completely detailed, final deal.

Some of the major points of the potential agreements include:

U.S. will reduce or suspend certain tariffs on Chinese goods (e.g., “fentanyl-related” tariffs drop)
China will suspend new export controls on rare earths, gallium, germanium, antimony, graphite etc., at least temporarily
China will resume major purchases of U.S. agricultural products, including soybeans
China will take “significant measures” to curb shipments of fentanyl precursors to the U.S

Newsletter | October 2025 | Update: Reciprocal Tariffs

Mon, 13 Oct 2025 14:50:35 GMT

TOP NEWS

The Supreme Court, which resumed on October 6th, has agreed to hear the case in regards to the reciprocal-tariffs (IEEPA), on an expedited basis. Oral arguments have been scheduled for November 5, 2025.

The interpretation of IEEPA (how broadly “regulate importation” is construed) is central. Because the issue at hand is fundamentally constitutional and statutory (delegation of powers, separation of powers, tariff authority), the Supreme Court is a likely—but not guaranteed—venue for final resolution. Critics argue that delegating a broad power to the President to impose tariffs under IEEPA goes beyond permissible delegation. If the Supreme Court affirms that such delegations are impermissible, it could curtail future presidential tariff initiatives using emergency or executive authority.

If the tariffs are struck down, there will be significant questions about refunds: who is eligible, how to claim them, whether the government is required to refund every dollar collected. The Supreme Court’s decision will likely shape the scope of relief. For instance, Treasury Secretary Bessent has warned of $750B–$1T in potential refunds if the tariffs are invalidated.

DID YOU KNOW…

Prior to the government shutdown, President Trump signed a Proclamation imposing new tariffs on timber, furniture and cabinets. The new rates apply to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern Daylight Time, October 14, 2025.

Tariff Rates & Effective Dates

Initial Tariff Rates (from Oct 14, 2025):

Softwood timber & lumber: 10% ad valorem duty
Upholstered wooden products: 25% ad valorem duty
Kitchen cabinets, vanities, and parts: 25% ad valorem duty

January 1, 2026 Increases (unless an agreement is reached):

Upholstered wooden products: increases from 25% → 30%
Cabinets, vanities & parts: increases from 25% → 50%

Products subject to this Proclamation shall not be subject to any reciprocal tariffs or tariffs imposed to address issues with Brazil and Russia. The Proclamation further notes the hierarchy for when these timber tariffs will or will not be applied in respect of other already established tariff programs, such as the automobile tariffs.

MORE TARIFF NEWS

Starting November 1, 2025, the U.S. will impose a 25% tariff on all imported medium and heavy duty trucks. This latest move has been framed as a national security/industrial policy measure to protect U.S. domestic manufacturers of heavy trucks. As of now, it is unclear how exemptions or regional trade agreement rules, such as under USMCA, might apply. Canada, as a major supplier of trucks to the U.S., has expressed concerns, and discussions are underway.

Refunds on Reciprocal Tariffs: How An Importer of Satellites Claimed Reciprocal Duties Back Upon Launch Into Space

Mon, 15 Sep 2025 11:15:00 GMT

This case study demonstrates how companies can claim duty drawback on goods launched into space:

The Challenge:

A global company founded in Germany that provides launch services and in-space transportation solutions for small satellites was a casualty to the new reciprocal tariffs. As they specialize in enabling rideshare missions, where multiple small satellites are launched together on a single rocket, these satellites were always imported free of duty into the United States prior to their delivery to space. When the 10% blanket tariff was assigned to the imported multimillion dollar satellites, they needed to find a way to ease the extraordinary amount of duty dollars that they and their colleagues now had to pay.

The Solution:

The satellite company reached out to ITM for guidance. They were pleased to learn that under U.S. Customs regulations, they could file for duty drawback—a refund of duties paid—on goods launched into space. ITM assigned a dedicated program manager to oversee the process, which included securing the necessary Customs approvals and gathering detailed data from the importer. Within just months, ITM had successfully obtained the required authorizations and filed all claims related to the satellite launches.

The Impact:

The outcome was highly beneficial :

Over $3,000,000 in duty refunds were recovered due to ITM’s expert handling
The importer’s internal team was able to delegate the entire drawback process, allowing them to focus on their tasks at hand
The successful collaboration created a streamlined, profitable program that strengthened the company’s long-term relationships with foreign satellite manufacturers

The Takeaway:

This case underscores the broader opportunities available through duty drawback programs. By leveraging the option to claim drawback on items launched into space, the importer was able to recover substantial funds — and cover these unexpected costs which they in turn did not have to pass along to their manufacturing partners.

GET STARTED HERE

Newsletter | September 2025 | Reciprocal Tariffs

Tue, 09 Sep 2025 11:00:08 GMT

TOP NEWS

The latest on the reciprocal tariffs have them hanging in the balance. On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit, affirmed a lower court decision finding that the reciprocal tariffs exceeded presidential authority under IEEPA. The court stayed its mandate until October 14, 2025, giving the government time to seek Supreme Court review. The Trump administration has petitioned the Supreme Court for an expedited hearing, possibly in November 2025, aiming for a final ruling early next year.

If the Supreme Court ultimately rules these tariffs illegal, the government may be forced to refund a substantial portion of the tariffs already collected. Treasury Secretary Scott Bessent has warned that nearly half of tariff revenues—possibly totaling tens to hundreds of billions of dollars—might need to be returned.

DID YOU KNOW…

As of August 29, 2025, a complete suspension of the de minimis exemption for all shipments from any country, including those valued at $800 or less, took effect. These items are now subject to applicable duties and taxes.

The duties will now be applied in one of two ways. Either by ad valorem, which is a percentage of the package value based on the country’s tariff rate or by a specific flat fee. The specific flat fee will be for a temporary transition period of six months and will be as follows:

$80 per item (if tariff rate < 16%)
$160 per item (if tariff rate is 16–25%)
$200 per item (if tariff rate > 25%)

After this six-month window, all postal shipments must use the ad valorem (value-based) tariff method.

A few exceptions remain including personal imports valued under $200 and gifts values at $100 or less. These exemptions will continue under longstanding law and are not affected by the new rule.

MORE TARIFF NEWS

President Trump signed an executive order on September 5th, that modifies the scope of the reciprocal tariffs. It offers some tariff exemptions as soon as Monday September 8th, to trading partners who strike deals on industrial exports such as nickel, gold and other metals, as well as pharmaceutical compounds and chemicals.

His latest order grants reciprocal tariff waivers to 45 categories. Those include critical minerals and metals (including gold, nickel, graphite, neodymium magnet and LED’s), pharmaceutical components (such as generic drug components), and other non-patented pharmaceutical articles. It also applies to certain agricultural products, aircraft and parts and non-patented articles used in pharmaceuticals.

The order also eliminates previous exemptions for items like certain plastics and polysilicon used in solar panels and revokes tariff exemptions for some plastics and polysilicon, meaning these items will now be subject to reciprocal tariffs.

What is Tariff Evasion and How to Avoid Implication

Fri, 15 Aug 2025 20:01:42 GMT

tariff evasion is an enforcement priority

The Department of Justice (DOJ) has officially elevated trade and customs fraud—including tariff evasion —to its #2 enforcement priority. This shift is part of a broader strategy under the Trump administration to enforce high tariffs and ensure accurate revenue collection.

The commencement of The Enforce and Protect Act (EAPA) enhances the U.S. government's ability to investigate and combat antidumping and countervailing duty evasion, providing new tools for enforcement and transparency in trade practices.

The DOJ is targeting misclassification, undervaluation, and false country-of-origin claims. They have mentioned aggressive prosecution, which includes criminal charges and whistleblower incentives. This isn’t a surprise given the spike in rapidly growing tariffs. Even unintentional errors in classification or valuation can trigger heavy penalties. Companies must reassess product classifications, especially with shifting supply chains (e.g., Mexico replacing China).

On Friday August 15th , CBP announced two major trade enforcement wins under EAPA. These wins delivered a decisive blow to bad actors using unfair trade practices to undercut American workers and industries.

CBP uncovered more than $400 million in unpaid trade duties through EAPA investigations that occurred from January 20th to August 8th. During that period, CBP identified 89 cases with sufficient suspicion of duty evasion. Some companies will try and circumnavigate duties by using illegal transshipment, moving goods through third countries to disguise origin and avoid duties.

CBP’s enforcement teams will continue to carry out port inspections which will include on-the-ground verifications in Indonesia and Taiwan. Every importer investigated that is found in violation will be subject to penalties. Some of the lesser penalties include up to 2x the underpaid duties, plus the original amount. Criminal prosecution is possible for importers who have committed intentional fraud or concealment.

What should you do as an importer?

Conduct a customs risk audit by reviewing your Harmonized Tariff Schedule (HTS) classifications .
Be sure to be accurate when reporting of the origin and value of an imported product.
If you have found discrepancies or anomalies, consider filing a voluntary prior disclosures to avoid punitive fines.
Don’t rely solely on your import broker, remember that importers are ultimately liable.

Newsletter | August 2025 | EU–US Trade Deal

Mon, 04 Aug 2025 11:30:00 GMT

TOP NEWS

On July 27th, the Trump Administration announced a deal with the EU imposing tariffs of 15% on most goods entering the US from Europe. As of August 1st, the 15% blanket tariff will cover most US imports. The US will have a 0% tariff for some items including equipment for US manufacturing and generic medicines. The US will keep in place a 50% tariff on steel and aluminum, with future plans for a quota system.

While the recent EU–US trade deal includes sweeping tariff changes, duty drawback remains a key tool for businesses navigating the new landscape.

DID YOU KNOW…

Starting August 1st, the U.S. is imposing a 50% tariff on imports of semi-finished copper products like pipes, wires, rods, sheets, and tubes, as well as copper-intensive derivative goods such as fittings, cables, and electrical components. The 50% tariff shall not apply to products subject to the autos/parts Section 232 tariffs or raw copper materials and copper scrap. Further, this new 50% tariff is not eligible for duty drawback.

MORE TARIFF NEWS

As of August 29th, the U.S. will suspend the de minimis exemption that allowed duty-free entry for goods valued under $800. This means no more duty-free treatment for low-value imports from any country. This will apply to commercial shipments, especially those outside the international postal system. Over 1.36 billion de minimis shipments enter the U.S. each year. Importers can expect a six-month phase-in that will apply simplified duties ($80–$200 per item), then shift to ad valorem tariffs based on country of origin.

Newsletter | July 2025 | Preliminary trade agreement with Vietnam

Tue, 08 Jul 2025 11:30:06 GMT

TOP NEWS

Last week, it was announced that the U.S. had reached a preliminary trade agreement with Vietnam. The agreement involves a 20% tariff on Vietnamese goods exported to the US and a 40% tariff on goods transshipped through Vietnam. The higher tariff on transshipments aims to address concerns about goods originating in China being routed through Vietnam to circumvention of U.S. tariffs on Chinese goods. It also includes Vietnam granting the U.S. “total access” to its market, meaning US products will face zero tariffs in Vietnam. This is a developing situation and we will do our best to keep the information coming.

DID YOU KNOW…

U.S. Customs and Border Protection (CBP) is intensifying its enforcement efforts to ensure importers are complying with customs classification and valuation laws. This crackdown reflects a broader push to uphold trade compliance and safeguard revenue collection. Specifically, importers are seeing increased audit activity, scrutiny of low-value shipments and crackdowns on fraudulent schemes.

The Impact on Importers

Higher Costs: Non-compliance may result in penalties, shipment delays, and retroactive duty payments.
Operational Adjustments: Businesses must refine internal processes to ensure accurate classification and compliance.
Increased Scrutiny: Greater likelihood of inspections, detentions, and post-entry reviews or audits.

Best Practices to Mitigate Risk

Accurate HTS Classification: Classify all products correctly using the Harmonized Tariff Schedule of the U.S. (HTSUS), ideally at the 10-digit level.
Maintain Robust Documentation: Retain records justifying classifications, country-of-origin determinations, and declared values.
Stay Informed: Monitor changes in CBP regulations, rulings, and classification requirements.
Seek Expert Advice: Work with customs brokers or trade compliance consultants, especially for complex or high-risk products.
Conduct Internal Audits: Regularly review past entries to identify and correct errors before CBP finds them.

EVOLVING SITUATION

The Canadian government officially rescinded the planned implementation of its Digital Services Tax (DST) in an effort to keep trade negotiations with the U.S. on track. Their decision came just two days after President Trump announced that trade talks with Canada had been terminated due to the DST and warned of possible tariffs against Canada within a week. Canadian Prime Minister Mark Carney has emphasized that the Canadian government remains committed to agreements that benefit Canadian workers and businesses. He noted that with the rescinding of the DST, both sides have agreed to resume trade negotiations with the goal of reaching a deal by July 21, 2025.

How an Importer of Yogurt Recouped Almost One Million Dollars

Wed, 18 Jun 2025 11:15:00 GMT

This case study demonstrates companies can claim duty drawback on a product upon it’s destruction with the appropriate supporting documentation:

The Challenge:

An American company partnered with a German-based yogurt manufacturer to test the product’s potential in the U.S. market before investing in a domestic production facility. To do this, the U.S. company imported millions of dollars’ worth of yogurt, incurring a 17.5% import duty on the shipments. While much of the product was distributed and sold, a significant amount expired in their temporary storage facility before it could reach consumers.

The Solution:

The American company reached out to ITM for guidance. They were pleased to learn that under U.S. Customs regulations, they could file for duty drawback—a refund of duties paid—on expired and destroyed goods. ITM assigned a dedicated program manager to oversee the process, which included securing the necessary Customs approvals and gathering detailed data from the importer. Within just four months, ITM had successfully obtained the required authorizations and filed all claims related to the product destructions.

The Impact:

The outcome was highly beneficial :

Over $850,000 in duty refunds were recovered due to ITM’s expert handling
The importer’s internal team was able to delegate the entire drawback process, allowing them to focus on launching
their new U.S. production facility
The successful collaboration created a streamlined, profitable program that strengthened the company’s long-term U.S. market strategy

The Takeaway:

This case underscores the broader opportunities available through duty drawback programs. By leveraging the option to claim drawbacks on expired and ultimately destroyed inventory, the importer was able to recover substantial funds—capital that could be reinvested directly into expanding their U.S. operations.

GET STARTED HERE

Newsletter | June 2025 | Update: Tariffs on imported goods

Mon, 02 Jun 2025 18:25:33 GMT

TOP NEWS

On May 28, 2025 a U.S. trade court ruled that President Donald Trump over stepped his authority in imposing the reciprocal tariffs. At that time, the court ordered an immediate block on said tariffs. As of May 29, 2025 a federal appeals court temporarily reinstated the most sweeping of Trump's tariffs. Pausing the lower court’s ruling, The United States Court of Appeals for the Federal Circuit in Washington is going to consider the government's appeal, and has ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9. This is a developing situation and we will do our best to keep the information coming.

MORE NEWS

As of late April 2025, heading 2517 of the Harmonized Tariff Schedule (HTS), has undergone significant updates. These revisions primarily address the implementation of Section 232 tariffs on automobiles and certain auto parts, as well as updates to Partner Government Agency (PGA) requirements.

Key Updates Under HTS Heading 2517:

Section 232 Tariffs on Automobiles and Auto Parts – includes the 25% ad valorem tariff on imports of automobiles and certain auto parts under Section 232 of the Trade Expansion Act of 1962.
Harmonized Tariff Schedule Modifications – the 2025 HTSUS has been revised to reflect the new tariffs.
Partner Government Agency (PGA) Updates - the updates to Heading 2517 also incorporate changes that importers must now comply with including additional documentation and certification requirements to ensure compliance.

AT ITM

We are very pleased to welcome Samantha Vallee as our new Director of Sales. Samantha joined us in May 2025. She brings an extensive knowledge in duty drawback as well as a background in marketing and sales. We look forward to having Samantha as part of our team for many years to come!

Maximizing Profitability Through a Streamlined Duty Drawback Program: A Jewelry Retailer's Success Story

Fri, 09 May 2025 20:10:09 GMT

This case study demonstrates the significant impact that a well-managed duty drawback program can have on a business's profitability. Here's a breakdown of how it unfolded:

The Challenge:

In 2019, a leading jewelry retailer faced a pressing issue: their duty drawback program was falling short. Despite engaging two different providers, the retailer struggled to recover significant amounts of duties. Both companies failed to file claims effectively or fully capitalize on the potential of the drawback program. This left the retailer not only frustrated but also losing out on substantial refunds that could be reinvested into their business.

Solution:

Recognizing the need for expertise, the retailer partnered with ITM, a renowned provider in duty drawback management. ITM assigned a dedicated manager to work closely with the retailer and U.S. Customs and Border Protection (CBP) to overcome the roadblocks that had hindered their previous efforts.

With a proactive approach, ITM began filing claims every 2-3 weeks. The claims were systematically reviewed and accepted by CBP, ensuring a seamless and efficient process.

The Impact:

The results were transformative:

Over $300,000 in duty refunds were recovered through ITM’s diligent management.
The retailer’s internal team was able to fully delegate the drawback program to ITM, freeing up resources to focus on core responsibilities.
The partnership resulted in a streamlined, lucrative program that bolstered the retailer's long-term profitability.

The Takeaway:

This case underscores the power of a well-executed duty drawback program. By recovering significant funds, the jewelry retailer was able to reinvest in their business, enhance competitiveness, and strengthen their bottom line in a challenging market.

GET STARTED HERE

Newsletter | April 2025 | Update: Tariffs on imported goods

Thu, 03 Apr 2025 18:08:41 GMT

TOP NEWS

Effective at 12:01 a.m. on April 5, 2025, a 10% baseline tariff on imported goods from most countries, with a few exceptions, will be implemented. This baseline is in addition to regular duties and fees, current IEPPA duties, Section 201 duties, Section 301 duties, and any applicable AD/CVD. Further to this Executive order, effective at 12:01 a.m. on April 9, 2025, country-specific tariffs will be applied to goods imported into the U.S. In some cases, they will remain at 10% while in others they will be higher. The country-specific tariffs imposed on April 9th, 2025, will be similarly levied in addition to existing tariffs, with exception to the 10% baseline tariff implemented April 5th, 2025. Goods imported from Canada and Mexico were not subject to either the April 5, 2025 or April 9, 2025 tariffs.

MORE NEWS

As of 12:01 a.m. on April 3, 2025, the new 25% tariffs are now applied to passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks classifiable under many 8703 and 8704 tariff headings. These tariffs will be assessed in addition to any other duties, fees or exactions applicable to the entry.

Importers can ask for a segregation and have only the non-U.S. portion to be subject to the 25% tariffs by certifying their content and deducting that amount from the vehicle’s total value. While this process has not yet been determined, importers should guarantee their calculations when submitting such a claim, as CBP has been ordered to assess the 25% tariff on the vehicle’s full value if the agency identifies any overstatement of the U.S. content.

COMING DOWN THE PIPELINE

On or after 12:01 a.m. on May 3, 2025, the new 25% tariffs on automobile parts will take effect. The parts subject to the additional tariffs include engines and engine parts; transmissions and powertrain parts; electrical components; as well as other parts of passenger vehicles and light trucks.

Newsletter | March 2025

Tue, 04 Mar 2025 21:03:27 GMT

TOP NEWS

As of 12:01am, March 4, 2025, tariffs of 25% are effective on products from Canada and Mexico and energy products from Canada are subject to a 10% duty. Products that are presently excluded from these tariffs include goods that are for personal use, goods entered under Chapter 98, donations that are imported under HTSUS 9903.01.21and merely information items included under HTSUS 9903.01.22. All other imported items will carry the 25% tariff and no drawback is permitted on these duties.

MORE NEWS

The upcoming deadline for steel and aluminum tariffs on March 12, 2025, is looming. If the tariffs on these metals increase as planned, it could further strain trade relations between the U.S., Canada, and Mexico. Steel and aluminum are critical components in many industries, from construction to automotive manufacturing, so a hike in tariffs could increase production costs, disrupt supply chains, and create inflationary pressures. For Canada and Mexico, which are major exporters of these metals to the U.S., the potential tariff increase could have a significant economic impact.

COMING DOWN THE PIPELINE

The early renegotiation of the USMCA, initiated by the U.S. with the publication of the "America First" policy on January 20, signals a shift in how the U.S. plans to approach the trade agreement. The U.S. is accelerating discussions and potentially aiming to adjust key aspects of the agreement in a way that aligns more closely with its domestic priorities. This puts pressure on both Mexico and Canada to not only understand the outcomes of these consultations but also to prepare their own strategies and responses in time for the formal review process slated for June 2026.

Steel and Aluminum Tariffs: Key Changes and Upcoming Deadlines

Tue, 18 Feb 2025 19:42:14 GMT

March 12, 2025: A Crucial Date for Steel and Aluminum Tariffs

Starting on March 12, 2025, all countries will face a 25% tariff on steel and aluminum products, as well as on specified derivative products imported into the U.S. An expanded list of derivative products will also be affected by these tariffs. However, the effective date for these additional derivative products hinges on the Secretary of Commerce confirming that an adequate system is in place to process and collect the tariffs efficiently. Once the Annexes listing the expanded derivative products are available, further details will be shared.

Derivatives and Tariff Application

For steel derivative products that are not classified under Chapter 73 of the Harmonized Tariff Schedule of the U.S. (HTSUS), the additional 25% tariff will apply only to the steel content of the product. Similarly, for aluminum, any derivative product not classified under Chapter 76 of the HTSUS will incur the 25% tariff only on its aluminum content.

Special Provisions for Russian-Origin Aluminum

There is an important exception for aluminum products: if the primary aluminum used in a derivative product originates from Russia, the tariff rate will increase to 200%. Primary aluminum is defined as newly produced aluminum metal obtained through the Hall-Heroult electrolytic process from alumina (aluminum oxide).

Steel and Aluminum Made in the U.S.

An exemption exists for derivative products made from steel or aluminum that was melted and poured in the U.S. If importers can provide certification to U.S. Customs and Border Protection (CBP) confirming that the steel or aluminum meets the "melted and poured" requirement, the additional tariff will not apply, regardless of the product's country of origin.

Similarly, for aluminum products, importers will need to provide information to CBP identifying the aluminum content in the derivative articles. Further guidance on the required documentation will be issued by CBP as soon as possible.

Changes to Trade Agreements and Exclusions

Effective March 12, all previous trade agreements with countries including Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, Ukraine, the U.A.E., and the UK will be cancelled. Additionally, for steel products from Turkey, a 50% tariff will be imposed.

Exemptions: As of February 11, no new exclusions or exemptions will be granted. However, importers with existing exclusions for steel or aluminum products can still benefit from these until the exclusion expires or the volume is exhausted, whichever occurs first. The Commerce Department has announced that these exclusions will remain valid through their expiration dates.

Adding Products to the Tariff Lists

The Commerce Department has been directed to develop a process for adding additional steel and aluminum products, along with their derivatives, to the tariff lists within 90 days. Domestic producers or industry associations representing steel or aluminum producers can petition the Commerce Department to include new products in the tariff list. The Commerce Department will have 60 days to review each petition and determine whether to add the product to the Annex.

No Duty Drawback Allowed

Importers will not be able to claim a duty drawback on these tariffs, meaning they will not be able to recover the tariff if the products are exported again.

Prioritizing Misclassification Reviews

To ensure proper tariff compliance, CBP is instructed to prioritize the review of steel and aluminum products for proper classification. If products are found to be misclassified in order to avoid the additional tariffs, penalties will be imposed. Notably, CBP is empowered to issue penalties without considering mitigating factors, which could lead to legal challenges in the future.

Aluminum-Specific Provisions

The aluminum tariffs have additional provisions for classification reviews. CBP is also instructed to prioritize reviewing the classification of aluminum articles and their derivatives, with the potential for monetary penalties to be levied at the maximum legal amount if goods are misclassified to avoid paying duties.

Conclusion

These upcoming changes will significantly impact the steel and aluminum industries, with numerous provisions to ensure compliance. Importers, exporters, and manufacturers in the steel and aluminum sectors should stay informed about the latest developments and ensure their operations are aligned with these new tariff regulations.

New Executive Order Impacts Imports from China: Additional Tariffs and the End of De Minimis Exemption

Wed, 05 Feb 2025 19:23:15 GMT

On February 1, 2025, President Trump signed an Executive Order (EO) that imposes an additional 10% ad valorem tariff on most imports from China, which includes products of Hong Kong. U.S. Customs and Border Protection (CBP) quickly followed up with important guidance regarding these changes, particularly impacting the trade community's handling of de minimis shipments from China. Effective February 4, 2025, de minimis shipments from China will no longer be eligible for the administrative exemption from duty under 19 U.S.C. § 1321(a)(2)(C), and will be subject to the new 10% tariffs.

Here's everything you need to know about the changes:

Key Highlights of the Executive Order and New Tariffs

Additional Tariff:
The EO mandates a 10% ad valorem duty on a wide range of products imported from China, including those from Hong Kong, regardless of value. This tariff applies to most goods coming from China, with few exceptions (such as certain products excluded in specific HTSUS classifications).
End of De Minimis Exemption:
Prior to the EO, shipments valued under $800 from China could enter the U.S. free of duties under the de minimis exemption. However, starting February 4, 2025, these shipments will now be subject to the additional 10% tariff. As a result, CBP will reject requests for de minimis entry for these shipments, and importers must file a formal or informal entry and pay the applicable duties and fees.
Impact on Filers:
Importers and filers must pay attention to any shipments that were processed under the de minimis threshold before February 4, 2025, but were not yet arrived. Any such shipments will now be subject to the new tariff, and pre-arrival clearances for these goods will be canceled.

What This Means for the Trade Community

Changes in ACE (Automated Commercial Environment):
CBP has updated its ACE system to reflect these changes, and these updates went into effect on February 3, 2025. Filers are urged to carefully review the technical changes and test the new tariff codes to ensure compliance.
Formal and Informal Entry:
For any affected shipments, importers will now need to file the correct entry type and pay the associated duties and taxes. If an entry was previously filed under de minimis but the shipment arrives after February 4, 2025, the shipment will no longer be eligible for that exemption.
Foreign Trade Zones:
Importers using foreign trade zones should be aware that any Canadian products admitted to these zones after the new duty rates go into effect will be subject to the additional tariff once cleared for consumption.

Handling Shipments: De Minimis Exemption Gone

Since the EO has eliminated the de minimis exemption for goods from China, all affected shipments must now be cleared with the correct formal or informal entry procedures. If your shipments fall under the new rules and you're unsure how to proceed, you’ll need to work closely with your CBP representative or the ACE Help Desk to avoid costly errors.

Additionally, CBP has clarified that no drawback is available for the new duties, meaning importers cannot reclaim these tariffs after the goods are processed.

Additional Technical Guidance Coming Soon

CBP has promised additional updates through its Cargo Systems Messaging Service (CSMS) as needed. If you are affected by these changes, it’s crucial to stay in close contact with CBP and follow their guidance to ensure compliance.

What’s Next?

Monitor Shipments:
All stakeholders in the trade community must be vigilant, ensuring that all imports from China and Hong Kong are properly documented and that appropriate duties are paid.
Review Filings:
Ensure that any shipment from China that was processed as de minimis prior to February 4, 2025, is filed correctly once it arrives in the U.S. and that the additional 10% tariff is applied.

By staying informed and prepared, your business can navigate the new rules effectively and avoid costly mistakes. For more detailed guidance, keep an eye on updates from CBP and consult with your trade compliance team or CBP representative.

Stay Compliant and Prepared!

With these new tariff rates and the end of the de minimis exemption, it's crucial for all importers to review their processes and filing procedures. By staying proactive and informed, you can continue to manage your shipments efficiently and avoid any potential compliance issues.

De Minimus Update

Wed, 05 Feb 2025 18:06:21 GMT

The recent guidance from U.S. Customs and Border Protection (CBP) regarding de minimis shipments from China is a significant update. Here's a quick breakdown of the key points in the alert:

New Executive Order (EO):

The EO signed by President Trump on February 1, 2025, imposed an additional 10% tariff on U.S. imports from China. This affects the de minimis exemption for Chinese shipments, which previously allowed for low-value shipments to enter without paying duties.

Effective Date:

The guidance took effect at 12:01 a.m. ET on February 4, 2025.

Impact on De Minimis Shipments:

Most products from China (including Hong Kong) no longer qualify for the administrative exemption under 19 U.S.C. § 1321(a)(2)(C).
Shipments from China that were previously eligible for de minimis treatment will now be subject to the 10% additional ad valorem duties.
Any requests for de minimis entry and clearance for ineligible shipments will be rejected.

Actions Required by Importers:

If a shipment was already filed as a de minimis entry, but it arrives after the cutoff time, it will no longer qualify.
Filers will need to take action to clear the shipment under the new rules, including potentially paying applicable duties, taxes, and fees through a formal or informal entry.
Pre-arrival clearances for affected shipments will be canceled after the cutoff time (12:01 a.m. ET on February 4).

CBP Guidance:

The trade community is advised to closely monitor the shipments and messages from CBP.
New technical guidance will be provided via CSMS as needed.

ACE System Updates:

Changes in the Automated Commercial Environment (ACE) system are available in the Certification Environment starting at 5:30 p.m. ET on February 3, and will be accessible in the Production Environment following a maintenance outage.

Newsletter | Feb 2025

Sat, 01 Feb 2025 18:25:40 GMT

International Tariff Management's February Newsletter

TOP NEWS

On January 20, 2025, President Donald Trump was sworn in for his second term, and with that came big promises regarding trade policy. But a significant shift came just days later, on January 21, when Trump announced plans to impose 25% tariffs on Mexico and Canada—set to go into effect on February 1, 2025. This move represents a dramatic change in North American trade relations and could have wide-reaching effects on American consumers.

At a signing ceremony in the Oval Office, Trump revealed that his administration would roll out tariffs on goods from two of the U.S.'s largest trading partners, Mexico and Canada.

However, this new tariff decision doesn’t fully align with the aggressive trade strategy Trump promised during his campaign. The sweeping tariffs Trump pledged on his first day in office, including a 25% tariff on Mexico and Canada, have yet to materialize. His executive action, while still outlining a broad trade policy overhaul, serves more as a placeholder for a more extensive, long-term plan.

INSIDE ITM

The team at ITM has been working diligently with many new partners to maximize returns with the currently evolving world of tariffs. To schedule a consultative meeting please reach out to our direct line and we would love to assist you in your current trade related issues.

MORE NEWS

On December 9, 2024, the U.S. Trade Representative (USTR) confirmed that the first agreement stemming from this initiative took effect the following day. Signed in June 2023, the agreement covers key areas such as anti-corruption, customs administration and trade facilitation, and small and medium-sized enterprises. The USTR's certification to the U.S. Congress, confirming Taiwan's adherence to its obligations under the agreement, paved the way for this milestone.

The announcement was met with support from both sides. USTR Katherine Tai described the agreement as a “milestone” and a significant step in strengthening U.S.-Taiwan trade relations. Taiwan’s Office of Trade Negotiations emphasized the strategic importance of bolstering ties with key economic and trade partners, particularly given the current global instability.

Trump's 25% Tariff on Mexico and Canada, Day One Pledge Delayed

Mon, 27 Jan 2025 19:53:59 GMT

At a signing ceremony in the Oval Office, Trump revealed that his administration would roll out tariffs on goods from two of the U.S.'s largest trading partners, Mexico and Canada.

The Plan: A “Placeholder” for Bigger Moves?

The executive order signed by Trump on January 21 aims to review America’s trade policies and trade agreements, including the US-Mexico-Canada Agreement (USMCA). This deal, signed during Trump’s first term, was meant to replace NAFTA and improve trade terms for American workers. But Trump’s new review will look at whether changes to the agreement are necessary, especially when it comes to economic security, industry, and addressing issues like fentanyl and illegal immigration.

While the executive order sets up investigations into trade deficits and unfair practices, the real meat of Trump’s trade vision—his promise of universal tariffs—is still to come. His campaign ideas for massive tariffs, including up to 25% on imports from Mexico and Canada and a staggering 60% on China, haven’t been fully realized yet. Trump himself acknowledged this at the signing ceremony, saying the administration isn't "ready" to move forward with some of those measures just yet.

The Potential Economic Fallout

The proposed 25% tariffs on Mexico and Canada would have immediate effects on American imports and consumers, likely raising prices across a wide range of goods, including electrical devices, toys, sporting goods, and even food. Mexico and Canada are two of the U.S.'s top trading partners, and this decision could lead to retaliatory tariffs that hurt U.S. exports and affect domestic businesses.

Despite Trump’s claims that foreign countries, not American consumers, will bear the brunt of the tariffs, the reality is often different. A study from the Peterson Institute for International Economics suggests that the U.S. will likely end up paying more for imported goods, and domestic businesses will face higher costs on items like transportation equipment, chemicals, and electronics.

Some officials within Trump’s economic team have proposed alternatives to an all-out tariff strategy. These ideas include phased-in tariffs or temporary delays to allow for negotiation. However, more hawkish voices in the administration, like trade adviser Peter Navarro, argue for stronger, immediate action to send a clear message about protecting American interests.

The Debate Within Trump’s Economic Team

The debate within the administration mirrors the split seen during Trump’s first term. Market-minded advisers, like Treasury Secretary Scott Bessent and National Economic Council leader Kevin Hassett, have pushed for a more cautious approach, wary of escalating tensions and causing economic disruptions. On the other hand, advisers who favor more aggressive policies, like Navarro, argue for pushing forward with Trump's original vision.

The goal, Trump says, is to overhaul America’s trade system and ensure that it benefits American workers, manufacturers, and businesses. He even suggested the creation of a new government agency—called the "External Revenue Service"—to handle tariff collections, which he believes would bring significant revenue into the U.S. Treasury.

A Trade War in the Making?

With tensions already running high over trade issues, these new tariff threats could lead to a major trade war. During Trump’s first term, retaliatory tariffs on American goods—ranging from soybeans to whiskey—created significant disruption, and similar actions could be expected this time around. The tariffs could reignite inflation concerns, further spooking the stock market and leading to economic instability.

Some analysts fear that these policies could hurt American businesses and consumers more than they help. The risk is that the U.S. could find itself in a cycle of escalating tariffs, with other countries retaliating and American companies facing increased costs, which would ultimately be passed on to consumers.

What's Next?

For now, the specifics of Trump’s tariff policy remain unclear, as discussions within his administration continue. While he has committed to revamping America’s trade policy, how he will execute these changes—and whether he can navigate the political and economic challenges that come with them—remains to be seen. What is clear, however, is that Trump is determined to follow through on his campaign promises to put "America First" in the global trade arena, even if it means dramatic shifts in policy.

When it comes to protecting your pockets, things such as duty drawback programs, free trade agreements and classification reviews can alleviate some of the costly effects of these anticipated tariffs.

Stay tuned as the story develops, and brace for potential changes that could have lasting effects on the economy, international trade, and your wallet.

US Takes First Step in Trade Agreement with Taiwan

Thu, 09 Jan 2025 20:10:25 GMT

Although the United States and Taiwan (officially known as the Republic of China) do not maintain formal diplomatic relations, the two countries share strong cooperation in several areas, including trade. Trade discussions are managed through the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the U.S., under an arrangement called the U.S.-Taiwan Initiative on 21st Century Trade. This framework allows both nations to address trade and investment issues, while working toward mutual priorities over time.

The announcement also included news that negotiations for a second agreement are underway. This new agreement will address additional trade areas, including labor, environmental standards, and agriculture. The current framework under the U.S.-Taiwan Initiative on 21st Century Trade is seen as laying the foundation for a potential, more comprehensive free trade agreement, though this remains unlikely in the near future.

However, the path forward is complicated. The complex dynamics between the United States, China, and Taiwan add layers of geopolitical tension. While the U.S. officially recognizes the People's Republic of China diplomatically, it is legally bound to support Taiwan's defense capabilities and has significant interests in Taiwan’s role in global manufacturing and trade.

Taiwan plays a vital role in the U.S. economy, particularly in the semiconductor industry, where it is the world’s leading producer. These semiconductors are crucial for both commercial and military use, making Taiwan a key player in U.S. national security. However, Taiwan’s absence from the 2022 Indo-Pacific Economic Framework for Prosperity—a pact aimed at countering Chinese economic and military influence—remains a notable gap in the region’s trade strategy.

For questions about the U.S.-Taiwan Initiative on 21st Century Trade, this agreement, or any other trade-related matters, feel free to contact our team at 203-757-8777.

Understanding the Recent Section 301 Tariff Updates: Key Changes and Filing Instructions

Fri, 03 Jan 2025 14:43:16 GMT

As of January 1, 2025, new tariff rates on certain Chinese imports will go into effect, as part of the ongoing Section 301 investigation into China's trade practices, particularly regarding technology transfer, intellectual property, and innovation. The United States Trade Representative (USTR) has announced additional tariff increases under the Section 301 Four Year Review, which impacts a range of products, including certain tungsten products, solar wafers, and polysilicon. If you're involved in importing these products or handling customs filings, it’s crucial to understand the latest developments and the steps required to comply with the updated regulations.

What’s New?

On December 16, 2024, the USTR issued a Federal Register Notice (FRN 89 FR 101682) that finalized an increase in tariff rates for five subheadings of the Harmonized Tariff Schedule of the United States (HTSUS). These tariff increases target specific products imported from China, including tungsten materials and polysilicon products. Here's a breakdown of the changes:

Tungsten Products:

The tariff rate on certain tungsten products will rise to 25%. This applies to a variety of tungsten goods, including unwrought tungsten and tungsten rods/bars, as well as other tungsten articles not elsewhere specified.

Solar Wafers and Polysilicon:

The tariff rate on certain solar wafers and polysilicon products will increase to 50%. These materials are essential for solar energy technologies, and the increased tariffs will directly impact manufacturers and businesses in the renewable energy sector.

These tariff rate increases are part of a broader set of tariff actions that have been progressively implemented in response to China's policies related to intellectual property and innovation.

Effective Date and Filing Deadlines

The increased tariffs will take effect January 1, 2025 , for goods entered for consumption or withdrawn from a warehouse for consumption after 12:01 a.m. Eastern Standard Time . The U.S. Customs and Border Protection (CBP) has set up specific filing requirements for importers and customs brokers to ensure compliance.

For products affected by the new tariff increases, Automated Commercial Environment (ACE) functionality for filing entries will be available starting December 28, 2024 . This means businesses have a small window to adjust their filings before the tariffs officially kick in.

Entry Filing Instructions

Importers and customs brokers need to be aware of the precise classifications and filing requirements for products impacted by these increased tariffs. These changes will affect imports classified under the following HTSUS subheadings:

Polysilicon and Solar Wafers (50% Tariff Rate)

For Chinese polysilicon and wafer products, the additional 50% duty will apply to imports classified in these specific HTSUS subheadings:

2804.61.00 – Silicon containing by weight not less than 99.99% of silicon.
3818.00.00 – Chemical elements doped for use in electronics, including discs, wafers, etc.

These products must be reported under heading 9903.91.05 to reflect the additional 50% tariff.

Tungsten Products (25% Tariff Rate)

For Chinese tungsten products, the following subheadings are affected, and the additional 25% duty should be applied under heading 9903.91.11 :

8101.94.00 – Tungsten, unwrought (including bars and rods obtained by sintering).
8101.99.10 – Tungsten bars and rods (excluding sintered forms), profiles, plates, sheets, strips, and foil.
8101.99.80 – Tungsten, articles not elsewhere specified or included (nesoi).

Foreign Trade Zones (FTZ) Considerations

Products of China subject to the increased duties and admitted into a U.S. Foreign Trade Zone (FTZ) after 12:01 a.m. Eastern Standard Time on January 1, 2025 , will need to be admitted under “privileged foreign status.” This status is essential for compliance with the updated tariff rates, as any goods entering an FTZ will now be subject to the newly imposed additional tariffs when they are eventually moved into U.S. commerce.

It’s important to note that any product eligible for “domestic status” (as defined in 19 CFR 146.43) is exempt from this requirement.

What Should You Do Now?

For businesses involved in the importation of products covered by these updates, here’s a checklist to ensure you’re prepared:

Review your inventory : Check whether any of the products you import fall under the affected HTS subheadings.
Update filing systems : Make sure your filing system is updated to reflect the new tariff rates for January 1, 2025. Utilize the ACE system for submitting entries accurately.
Coordinate with customs brokers : Ensure your customs brokers are informed of the new tariff increases and have the correct HTSUS codes to facilitate proper filing.
Monitor any changes to foreign trade zones : If you're using FTZs, ensure that you are aware of the requirements for admitting Chinese products under the new privileged foreign status.
Stay informed about further announcements : Keep an eye on further updates from the USTR, particularly regarding the potential additional duties slated for 2026.

As the U.S. continues to adjust its trade policies with China, these increased tariff rates represent a significant shift for importers of specific goods like tungsten, polysilicon, and solar wafers. Understanding the changes and acting quickly to adjust your filing procedures is essential to remain compliant with the new regulations.

For more detailed instructions on filing entry summaries and other compliance issues, importers should refer to CSMS # 39587858 and stay updated on any future changes from the USTR or CBP.

Newsletter | Jan 2025

Wed, 01 Jan 2025 18:10:29 GMT

Our team is excited to be back for another year of maximizing refunds and providing exceptional service for our partners!

INSIDE ITM

The team at ITM wishes everyone a happy holiday season and a healthy new year! We thank our partners for their continued trust in us with their drawback and U.S. Customs related needs! We look forward to assisting you in 2025.

MORE NEWS

The possibility of increased tariffs, changes to de minimus and other CBP related regulatory changes loom with the changing of presidency. To ensure compliance while maximizing savings our team recommends working with an expert within the tariff and trade space.

Why China Welcomes Trump’s Energy Tariffs: An Analysis by Wesley Alexander Hill

Mon, 23 Dec 2024 14:49:01 GMT

In his recent article, "Why China Welcomes Trump’s Energy Tariffs", energy and geo-economics expert Wesley Alexander Hill provides an intriguing take on how U.S. tariffs, especially those targeting energy products, might inadvertently benefit China rather than harm it, as intended by former President Donald Trump.

The concept of imposing tariffs to protect domestic industries and reduce reliance on foreign imports has long been central to Trump’s economic policies. During his 2024 presidential campaign, he doubled down on his protectionist stance, promising to impose steep tariffs on foreign energy products, including those from China. The expectation, of course, was that these tariffs would strengthen American industries by making foreign goods more expensive and less competitive. However, Hill argues that China's reaction to these tariffs may not align with typical expectations of an adversary.

Instead of protesting or retaliating in a manner that could hurt its own economy, China’s response has been surprisingly positive. Chinese industry players, ranging from oil producers to manufacturers of solar panels and electric vehicles (EVs), view these tariffs as an opportunity. They argue that by isolating the U.S. from its allies and driving up production costs for American companies, these tariffs could allow China to dominate certain markets and strengthen its position in the global economy.

Hill goes on to explain that China’s economy, despite its outward liberalization, still relies heavily on state intervention, particularly in sectors like energy. This results in inefficiencies that hinder domestic consumption and create economic instability. However, with the U.S. applying tariffs to energy imports, China may be pushed to confront these inefficiencies more urgently. The tariffs could serve as a catalyst for necessary economic reforms, driving China to shift away from low-cost manufacturing and toward a more advanced, consumer-driven economy. This transition has been a central goal of Xi Jinping’s administration, which seeks to elevate China from its middle-income status and break free from over-reliance on cheap exports.

At the same time, Hill highlights that China’s export-oriented economy is at a crossroads. While tariffs might disrupt some of its existing trade relationships, they also create a unique opportunity for China to further its strategic shift towards high-tech industries, particularly in green energy. As the world’s leader in solar panel production, electric vehicles, and critical minerals used for green energy, China is well-positioned to weather the storm caused by these tariffs. In fact, the tariffs may unintentionally speed up China’s transition to a high-tech, sustainable economy.

The article also delves into the broader geopolitical implications. The tariffs could limit global capital mobility, reducing the flow of foreign investments and compelling China to rely more on domestic demand. This, in turn, could reduce China’s exposure to global market fluctuations and align with Xi Jinping’s long-term goals of boosting domestic consumption.

While Hill acknowledges that the immediate effects of these tariffs could create challenges for both the U.S. and China, particularly in terms of retaliatory measures and shifting trade patterns, he ultimately argues that the U.S. tariffs may be accelerating China’s economic evolution in ways that align with Xi’s vision.

Ultimately, Hill suggests that the U.S. may inadvertently be helping China realize its economic ambitions. Rather than punishing China’s economy, these tariffs could be nudging it towards the kind of reforms and transitions it would have pursued anyway, albeit more slowly and with greater internal resistance.

Wesley Alexander Hill’s article is a thought-provoking analysis of how global economic policies and protectionist measures can have unintended consequences. As the U.S. and China continue to navigate complex trade relations, Hill’s insights offer a deeper understanding of the intricate dynamics at play in the global energy and manufacturing sectors.

You can read the full article on Forbes here .

Dr. Naushad Forbes on Free Trade Agreements

Thu, 19 Dec 2024 19:44:48 GMT

Dr. Naushad Forbes explains the issues surrounding around the WTO and the benefits of utilizing Free Trade Agreements

Dr. Naushad Forbes is an Indian business leader, academic, and thought leader known for his significant contributions to the fields of industry, innovation, and policy. He is particularly recognized for his work in advancing India's industrial and technological sectors. Forbes is the Co-Chairman of Forbes Marshall, a leading Indian engineering company that provides energy-saving solutions and industrial automation. The company is a prominent player in the fields of industrial boilers, steam systems, and process control.

Taking Advantage of Free Trade with Eligible Countries

Tue, 17 Dec 2024 19:56:13 GMT

Free Trade Agreements (FTAs) and U.S. Economic Influence: A Snapshot of 20 Countries

Free trade agreements (FTAs) are vital tools for the United States, designed to open international markets to American businesses, enhance the competitiveness of U.S. products abroad, and give consumers access to a broader range of goods in the global marketplace. These agreements also grant the U.S. increased political influence, integrating partner countries into the American economy and making them less likely to align with rivals such as China or Russia. Republican presidents have typically championed FTAs, viewing them as beneficial to business and an essential means of exerting American influence internationally.

However, FTAs are controversial. Critics argue that they can lead to the relocation of jobs overseas, as businesses seek to produce goods where labor and materials are cheaper. There are also concerns that FTAs can erode local cultures and lead to cultural homogenization, which is often felt more acutely by smaller, less dominant cultures. These concerns have made FTAs less popular within the Democratic Party.

Key Points:

Maximize Your Business Potential: Accurate reviews and checks are key to unlocking success in the global marketplace.
The U.S. has FTAs with some of its closest allies , though generally with economies smaller than its own.
Major allies like Japan , the UK , and the European Union do not have FTAs with the U.S. due to the complexity and scale of their trade relations.

Below is a review of the U.S. Free Trade Agreements with 20 countries, some of which may surprise you in terms of who’s included—or left out.

U.S. Free Trade Agreements with 20 Countries

1. Australia

Started : January 1, 2005
U.S. President : George W. Bush
Australia is a close U.S. ally with strategic military ties, including a U.S. base in Darwin.

2. Bahrain

Started : August 1, 2006
U.S. President : George W. Bush
An oil-rich ally in the Persian Gulf, Bahrain has supported the U.S. in regional conflicts.

3. Canada

Started : July 1, 2020 (replaced NAFTA)
U.S. Presidents : Bill Clinton, Donald Trump
Canada is one of the U.S.'s top two trading partners and a NATO ally.

4. Chile

Started : January 1, 2004
U.S. President : George W. Bush
A stable and democratic ally in South America, Chile is a key source of agricultural products.

5. Colombia

Started : November 1, 2006
U.S. President : George W. Bush
Colombia is a strategic partner in the fight against drug trafficking and a counterbalance to Venezuela.

6. Costa Rica

Started : January 1, 2009
U.S. President : George W. Bush
Known as the "Switzerland of Central America," Costa Rica is a popular destination for American retirees.

7. Dominican Republic

Started : March 1, 2007
U.S. President : George W. Bush
A prosperous country in the Caribbean, the Dominican Republic shares an island with Haiti.

8. El Salvador

Started : March 1, 2006
U.S. President : George W. Bush
El Salvador has made progress in fighting crime, improving relations with the U.S.

9. Guatemala

Started : July 1, 2006
U.S. President : George W. Bush
A major source of undocumented immigrants, Guatemala benefits from trade that creates jobs and reduces migration pressures.

10. Honduras

Started : April 1, 2006
U.S. President : George W. Bush
Vital to U.S. interests in the 1980s, Honduras remains a key regional partner.

11. Israel

Started : September 1, 1985
U.S. President : Ronald Reagan
The first U.S. free trade agreement, reflecting the strong historical ties between the U.S. and Israel.

12. Jordan

Started : December 17, 2001
U.S. President : George W. Bush
A moderate Arab nation with close ties to both Israel and the U.S.

13. Mexico

Started : July 1, 2020 (replaced NAFTA)
U.S. Presidents : Bill Clinton, Donald Trump
One of the U.S.'s top trading partners, Mexico shares extensive economic and cultural ties with the U.S.

14. Morocco

Started : January 1, 2006
U.S. President : George W. Bush
The first country to recognize U.S. independence, Morocco has a historic partnership with the U.S.

15. Nicaragua

Started : April 1, 2006
U.S. President : George W. Bush
Following the end of the Sandinista government, trade relations with Nicaragua improved.

16. Oman

Started : January 1, 2009
U.S. President : George W. Bush
A key Gulf partner in the Gulf War, Oman secured an FTA as part of its support for U.S. efforts.

17. Panama

Started : July 11, 2007
U.S. President : George W. Bush
Panama is crucial for maintaining the smooth operation of the Panama Canal, a vital U.S. shipping route.

18. Peru

Started : February 1, 2009
U.S. President : George W. Bush
A vital U.S. partner on the West Coast of South America, alongside Chile and Colombia.

19. Singapore

Started : January 1, 2004
U.S. President : George W. Bush
A prosperous and strategically located city-state, Singapore plays a key role in global trade.

20. South Korea

Started : June 30, 2007
U.S. President : George W. Bush
A long-standing U.S. ally, South Korea is a key partner in the region and hosts 24,000 U.S. troops to deter North Korean threats.

The United States has established free trade agreements with 20 countries that span continents and economic sectors, reflecting its strategic and economic interests. While these agreements promote American exports, create jobs, and strengthen political ties, they also come with challenges and controversies. Some major allies, like Japan and the EU, do not have FTAs with the U.S. due to the complexity of their trade relations, which highlights the ongoing debates around global trade and the impact of these agreements.

USTR Raises Tariffs on Tungsten Products, Wafers, and Polysilicon Under Section 301, Finalizing Four-Year Statutory Review

Thu, 12 Dec 2024 19:13:00 GMT

On December 11, 2024 , the U.S. Trade Representative (USTR) announced increases in tariffs on certain tungsten products, wafers, and polysilicon, following its September 19, 2024, solicitation for comments. These tariff increases will take effect for goods entered on or after January 1, 2025 , and are part of the USTR’s final action under the statutory four-year review of existing Section 301 duties on China.

Specific Tariff Increases:

Tungsten Products (Increase to 25%)

The following subheadings for tungsten products will see a tariff increase to 25%:

8101.94.00: Tungsten, unwrought (including bars and rods obtained simply by sintering).

8101.99.10: Tungsten bars and rods (other than those obtained simply by sintering), profiles, plates, sheets, strip, and foil.

8101.99.80: Tungsten, articles not elsewhere specified or included (nesoi).

Wafers and Polysilicon (Increase to 50%)

The following subheadings for solar-related products will see a tariff increase to 50%:

2804.61.00: Silicon containing by weight not less than 99.99 percent of silicon.

3818.00.00: Chemical elements doped for use in electronics, in the form of discs, wafers, etc.; chemical compounds doped for electronic use.

Background and Purpose:

These tariff increases are part of the final action taken by the USTR pursuant to its statutory review of Section 301 duties on China’s trade practices. While China has made some changes to its trade policies, the USTR concluded that harmful practices—including forced technology transfer, cyber theft, and industrial espionage—continue to persist or have worsened.

In response, the USTR has targeted strategic sectors, such as critical materials (tungsten) and clean energy (solar wafers and polysilicon), which are vital for U.S. economic and national security. These sectors are critical for the U.S. to maintain its competitive edge in technology, renewable energy, and critical supply chains.

Effective Date:

These tariff increases will apply to goods entered on or after January 1, 2025.

Broader Context of the USTR’s Review:

This action concludes the four-year statutory review of the China 301 tariffs, which began in 2018, and targets sectors where China's practices have been most problematic. In addition to the tungsten and solar-related products, the USTR has previously increased tariffs on other products, including:

100% tariffs on electric vehicles, syringes and needles, and medical gloves.

50% tariffs on semiconductors, solar cells, and facemasks.

25% tariffs on steel, aluminum, and certain critical minerals.

Potential Impact on U.S. Businesses:

Sourcing Alternatives: U.S. businesses that import tungsten products or solar-related goods from China will face higher costs. Companies may need to diversify suppliers, seek tariff exclusion requests, or explore alternative sourcing options to mitigate the impact of the higher tariffs.

Price Adjustments: Businesses could consider adjusting their pricing models to pass on some of the tariff costs to consumers or explore ways to absorb the increases, depending on their competitive positioning and market conditions.

Strategic Planning: Companies in affected sectors should engage in proactive strategic planning to assess how these tariffs will affect their operations and consider long-term supply chain adjustments. Consulting with trade and legal experts could help businesses navigate these changes effectively and develop strategies to minimize the financial impact.

The tariff increases announced on December 11, 2024, reflect the U.S. government’s ongoing effort to address unfair trade practices by China, particularly in sectors crucial to U.S. economic and national security. These increases will likely have a significant impact on companies importing tungsten products, solar wafers, and polysilicon from China. U.S. businesses in these sectors should consider consulting with trade experts to assess the full impact and develop strategies to mitigate the effects of the new tariffs.

Newsletter | Dec 2024

Tue, 03 Dec 2024 19:10:12 GMT

Happy Holidays! Our team wishes everyone the best in the coming year.

TOP NEWS

As the possibility of renewed Trump-era tariffs looms, industries are already planning how to protect their supply chains from potential disruptions. President-Elect Donald Trump has proposed imposing blanket tariffs of up to 20% on all imports, and even higher tariffs—ranging from 60% to 100%—on goods from China.

John Donigian, Senior Director of Supply Chain Strategy at Moody’s, cautions that the U.S. could return to its previous approach to tariffs, leading to higher duties on imports from major manufacturing nations. This shift would complicate already strained global supply chains, further challenged by post-pandemic recovery and rising geopolitical tensions.

In response to the anticipated tariff increases, many companies will reassess their global manufacturing and distribution networks. Those who diversify their supply sources, consider reshoring, and adopt new technologies will be best positioned to handle the evolving trade landscape.

INSIDE ITM

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Possible implications of a second Trump presidency on global trade are uncertain. The key role of trade professionals in adapting to these changes, in crucial areas of focus such as the De Minimis rule, Most-Favored-Nation (MFN) status, export controls, and investment restrictions are essential at this time. Read more below regarding how to protect your business from these impending tariffs.

Navigating Global Trade Under a Second Trump Presidency: Key Challenges and Strategic Opportunities for Trade Professionals

Wed, 20 Nov 2024 19:01:22 GMT

With Donald Trump returning to the presidency, global trade professionals are facing an uncertain and rapidly evolving landscape. Given his past policies and rhetoric, significant shifts in the global trade environment seem likely—shifts that could have far-reaching effects on international markets and economies. In this post, we’ll explore the potential implications of a second Trump presidency on global trade, the key role of trade professionals in adapting to these changes, and crucial areas of focus such as the De Minimis rule, Most-Favored-Nation (MFN) status, export controls, and investment restrictions.

U.S. Economic Policies and Their Impact on Global Trade

Trump’s economic policies have been characterized by tax cuts, increased government spending, and a focus on reducing trade deficits. While these policies are designed to stimulate domestic growth, they may also have implications for global trade dynamics, especially if they lead to higher U.S. debt, rising inflation, or more aggressive interest rate hikes by the Federal Reserve. Trade professionals will need to monitor these fiscal and monetary developments closely as they could influence U.S. trade patterns, alter demand for imports and exports, and impact global supply chains.

The U.S.-China Trade Relationship: Tensions Resurface?

One of the most significant flashpoints for global trade during Trump’s first term was the strained relationship with China. Under Trump, the U.S. imposed tariffs on Chinese goods, escalating trade tensions. If Trump adopts a similar approach in his second term, it could lead to renewed tariffs and trade restrictions. This would not only affect U.S.-China trade relations but could also impact China’s Most-Favored-Nation (MFN) status, influencing global trade dynamics.

Most-Favored-Nation (MFN) Status
MFN status is a cornerstone of international trade, requiring countries to treat each other equally in terms of tariffs and trade barriers. If the U.S. takes a protectionist stance with China, there could be a challenge to China’s MFN status, which would have broad implications for global trade, triggering tariff escalations and creating new barriers for exporters. Trade professionals will need to stay abreast of these developments to adjust strategies accordingly.

Export Controls and Investment Restrictions: A Continued Focus on National Security

The Trump administration placed increasing emphasis on national security concerns in global trade, particularly when it came to technology and sensitive industries. Export controls on products like semiconductors, telecommunications equipment, and advanced technologies, as well as restrictions on foreign investments, particularly from China, are likely to continue. These measures could disrupt global supply chains, especially in tech-driven sectors.

Navigating Export Controls and Investment Restrictions
Trade professionals will need to adapt to these growing export controls and investment restrictions. Understanding compliance requirements is essential to avoid penalties and minimize supply chain disruptions. As investment restrictions grow, especially those limiting Chinese investments in U.S. companies, professionals must also consider alternative markets and suppliers to maintain business continuity.

Decoupling vs. De-Risking
One of the key debates for businesses in this environment is whether to fully decouple from China or take a more measured “de-risking” approach. While decoupling involves reducing reliance on China entirely, de-risking seeks to minimize risks without severing ties completely. The choice between these strategies will depend on factors like market exposure, supply chain dependencies, and geopolitical risks. Trade professionals must carefully assess these strategies to build resilient, diversified supply chains that can weather potential shocks.

The De Minimis Rule: E-Commerce and Low-Value Shipments

The De Minimis rule allows low-value shipments to enter a country without incurring customs duties or taxes, which is especially important for cross-border e-commerce. Changes to the De Minimis threshold in the U.S. could have a significant impact on international trade, particularly in the e-commerce sector. A reduction in the De Minimis threshold could lead to higher tariffs on low-value goods, increasing costs and complicating cross-border trade.

Adapting to Changes in the De Minimis Threshold
For global trade professionals, staying informed about any potential changes to the De Minimis threshold will be critical. These changes could affect the cost structures of businesses that rely on cross-border e-commerce, requiring companies to adapt their supply chain strategies and compliance processes to avoid costly disruptions.

Implications for Emerging Markets and Central Banks

Emerging markets that rely on dollar-denominated debt or trade with the U.S. could face increased risks if U.S. interest rates rise or if trade tensions lead to a reduction in U.S. imports. This could raise borrowing costs for these markets and negatively affect their economies.

Managing Currency and Financial Risks
Trade professionals working with emerging markets must develop strategies to manage financial risks, including currency fluctuations and rising borrowing costs. Additionally, central banks around the world may adjust their policies in response to changes in U.S. trade policy, further impacting exchange rates and trade relationships. Staying informed about these global financial shifts will be essential for navigating these risks.

Strategic Priorities for Global Trade Professionals

In this evolving global trade environment, professionals will need to stay proactive, adaptable, and well-prepared for the uncertainties ahead. Here are some key strategies that trade professionals should focus on:

1. Scenario Planning and Risk Management

Given the uncertainty surrounding U.S. trade policy, scenario planning will be vital for identifying risks and opportunities. By analyzing different potential outcomes, businesses can create contingency plans and ensure they are prepared for disruptions or changes in the global trade environment.

2. Diversification of Markets and Supply Chains

With the likelihood of increased tariffs and trade barriers, diversification is critical. Trade professionals should seek to diversify supply chains and markets to reduce dependency on any single region, especially China. This diversification will help businesses remain resilient amid geopolitical risks and policy shifts.

3. Compliance and Regulatory Expertise

As global trade policies evolve, staying compliant with changing regulations will be essential. Trade professionals must remain up-to-date on trade agreements, tariffs, export controls, and other regulations to avoid penalties and ensure smooth operations. Developing deep expertise in trade compliance will be crucial in the years ahead.

4. Collaboration and Networking

Building strong relationships with international partners, stakeholders, and industry peers will be essential for gathering insights, sharing best practices, and collaborating on strategies to navigate the complexities of global trade. A well-connected network can help businesses adapt quickly to changing circumstances.

Preparing for the Future of Global Trade

As Donald Trump returns to the White House, the future of U.S. trade policy and global supply chains remains uncertain. The global trade landscape may be marked by rising tariffs, export controls, and investment restrictions, all of which will present challenges—and opportunities—for trade professionals.

To succeed in this changing environment, companies must prioritize scenario planning, diversify supply chains and markets, and stay on top of compliance requirements. Leveraging global trade management technology can help automate processes, ensure compliance, and improve efficiency. By adopting these strategies, global trade professionals can navigate the complexities of a new Trump presidency with confidence, adapting to whatever changes lie ahead.

By staying informed, flexible, and proactive, global trade professionals can not only survive but thrive as the global trade landscape evolves under a second Trump administration.

Preparing for Trump-Era Tariffs: Strategies to Safeguard Global Supply Chains

Thu, 14 Nov 2024 18:53:50 GMT

Sector-Specific Impact of Tariffs

Donigian points out several industries that are most likely to feel the brunt of these potential tariffs:

Electronics & Technology : Complex and fragmented supply chains could make shifting production costly and time-consuming.
Automotive : Manufacturers reliant on international parts suppliers may face higher costs and longer lead times.
Retail & Consumer Goods : Increased tariffs could push up consumer prices and create inventory shortages.
Pharmaceuticals & Medical Devices : Moving production could introduce regulatory hurdles and quality control challenges.

As a result, companies in these sectors may need to rethink their sourcing and manufacturing strategies, potentially relocating production closer to North America or even bringing manufacturing back to the U.S.

Strategies for Mitigating Tariff Impact

To reduce the potential damage of these tariffs, Donigian outlines several approaches:

Supplier Diversification : Expand sourcing across multiple regions to decrease reliance on any single market.
Dual Sourcing : Utilize multiple suppliers for critical components to reduce risks associated with supply chain disruptions.
Strategic Inventory : Build up stockpiles to cushion the impact of delays and disruptions in the supply chain.

He also suggests taking advantage of free trade zones , bonded warehouses , and duty drawback programs to minimize the financial impact of tariffs. For those considering reshoring, investments in automation and advanced manufacturing technologies can help offset the higher cost of labor.

The Importance of Cross-Functional Coordination

As businesses prepare for these changes, Donigian emphasizes the need for cross-departmental coordination. Aligning procurement, logistics, and risk management teams will be crucial to adapting swiftly to new trade policies and minimizing disruptions to the supply chain.

Shifting Global Manufacturing and Distribution

Newsletter | Nov 2024

Wed, 06 Nov 2024 20:41:52 GMT

Updates in FTA's and GSP with significant effects of the state of trade for the United States

Will the EU Finally Close a Free Trade Deal with the GCC After 30 Years?

Wed, 06 Nov 2024 19:09:02 GMT

For over three decades, the European Union (EU) and the Gulf Cooperation Council (GCC) have been trying to finalize a free trade agreement (FTA). However, despite early talks, the deal has remained elusive. The main roadblock? The EU's tendency to mix economic issues with political and ideological concerns—an approach that has ultimately hindered progress. As a result, while the EU has stalled, the GCC has gone on to strike FTAs with other countries and economic blocs, capitalizing on new trade opportunities that the EU failed to pursue.

But with changing global dynamics, could the EU finally be on the verge of closing a deal? Let’s take a look at the evolution of this long-running trade saga, and why the next few months could be crucial for the future of EU-GCC trade relations.

The Early Years: Missed Opportunities

The EU was among the first to engage the GCC in discussions about a free trade agreement back in the early 1990s. However, instead of focusing solely on economic and trade-related issues, the EU insisted on including political matters, such as human rights, regional conflicts, and its stance on the Israeli-Palestinian issue. These non-economic concerns derailed the negotiations, with the EU’s political agenda frequently clashing with the GCC's focus on pure economic interests.

During this period of stagnation, the GCC didn’t sit idle. Countries like Saudi Arabia, the UAE, and Qatar signed several FTAs with a range of countries, including China, India, and other Asian economies. These deals not only gave the GCC access to new, high-quality markets but also diversified its economic ties—helping the region grow into a major player on the global stage.

The Shift After Brexit

In recent years, the landscape has changed dramatically. The EU’s reluctance to focus solely on trade negotiations coincided with the UK’s exit from the EU (Brexit). The UK is now free to pursue its own trade deals, and in fact, an FTA between the UK and the GCC is expected to be finalized soon. This new development is seen as a major opportunity for the UK to enhance its trade and investment relations with the Gulf—further complicating the EU's position.

As the UK solidifies its ties with the GCC, the EU finds itself trying to catch up, acknowledging that the economic power and geopolitical influence of the GCC have only grown over the last two decades. The GCC has become an increasingly important player in international trade and regional security, making it even more critical for the EU to close a deal before it falls further behind.

The Push for a Deal: European-Gulf Summit in October

The EU seems to be aware that time is running out. With the GCC’s growing global influence and its more diversified trade relationships, there is now a sense of urgency in Brussels to finalize the FTA. In a bid to move forward, the first-ever European-Gulf summit is scheduled to take place in Brussels on October 16. This summit will address the long-standing challenges that have kept the FTA negotiations in limbo.

Christophe Farnaud, the EU Ambassador to Saudi Arabia, Bahrain, and Oman, has emphasized the EU’s renewed commitment to reaching a free trade agreement with the GCC. According to Farnaud, while both sides share political interests, such as the goal of advocating for a two-state solution between Palestine and Israel, the focus should now be on finalizing a trade deal. He pointed out that there are no technical issues blocking progress anymore—both sides have already resolved such matters in earlier negotiations.

The real hurdle, he argues, is for the EU to finally separate trade from politics, a crucial step that the UK and other global players have already taken. If the EU can shift its approach and focus exclusively on economic interests, the long-delayed FTA could finally be within reach.

The EU's Declining Share of GCC Trade

One of the most significant factors motivating the EU to act swiftly is the fact that it is no longer the GCC’s top trading partner. Back in the 1990s, the EU was the primary economic partner for the GCC. However, that position has been overtaken by China and India, which now lead the Gulf in trade volumes.

In 2023, merchandise trade between the GCC and the EU was valued at $187 billion, while trade with China reached $287 billion and with India $185 billion. The shift is particularly notable considering the EU now consists of 27 countries (after the UK’s departure), which makes it even more critical for the bloc to recapture its position in Gulf trade.

This loss of trading dominance, coupled with the fact that the GCC now has more economic leverage than ever before, means that the EU can no longer afford to wait for the perfect moment. The GCC has alternative options, including the soon-to-be-concluded UK-GCC FTA, and it’s clear that the region is not dependent on the EU for trade deals.

The Path Forward: Can the EU Get It Right?

What the EU needs now is greater flexibility and a willingness to leave political concerns behind when it comes to trade. In the past, the EU’s focus on intertwining economic and non-economic issues has led to delays, missed opportunities, and frustration on both sides.

The GCC countries, for their part, have always maintained a professional approach to negotiations, ensuring that trade discussions remain separate from political or ideological debates. They have handled these talks pragmatically, aware that economic ties are more beneficial when both sides focus purely on trade and investment, rather than adding external pressures.

At this juncture, the EU must recognize that the GCC is in a much stronger position than it was 30 years ago. The Gulf region is now an economic powerhouse, and with the UK, China, India, and others keen to expand their ties, the EU will need to act quickly if it hopes to restore its economic prominence.

As the EU and GCC prepare for the October summit, the message is clear: this is a moment to focus on what matters—trade. If the EU can set aside political concerns and embrace the economic benefits of an FTA, it might finally close a deal that has been more than 30 years in the making.

In the coming months, we’ll see if the EU can adapt and take the necessary steps to regain its place as a key trading partner for the Gulf—before it’s too late.

Revisiting the US-Morocco Free Trade Agreement: A Two-Decade Review

Thu, 17 Oct 2024 18:35:13 GMT

The US-Morocco Free Trade Agreement (MAFTA), signed in 2004 under President George W. Bush, was a landmark deal aimed at strengthening economic and strategic ties between the U.S. and Morocco. As one of the few countries in Africa to benefit from such a pact, Morocco was poised to leverage MAFTA for significant economic gains. However, a recent report by the Washington Institute for Near East Policy sheds light on how the agreement has fared two decades later, revealing a complex and somewhat disappointing picture.

MAFTA’s Origins and Aspirations

In the aftermath of the September 11 attacks, MAFTA was conceived not only as a tool for economic growth but also as a strategic initiative. The U.S. aimed to promote a broader “Middle East Free Trade Area” and strengthen Morocco’s position as a “major non-NATO ally.” For Morocco, the agreement was a chance to bolster bilateral relations and enhance security cooperation with a key global power.

Economic Outcomes: A Mixed Bag

According to the Washington Institute’s report, the promise of MAFTA was initially fulfilled in terms of boosting trade volumes. Bilateral trade surged from approximately $1.3 billion in 2006 to $5.5 billion in 2023. This growth signifies a notable expansion in economic engagement between the two nations. However, the report also highlights a growing trade imbalance that casts a shadow over MAFTA’s success.

Morocco’s trade deficit with the U.S. has more than doubled over the same period, rising from less than $1 billion in 2006 to about $1.8 billion in 2023. This persistent imbalance suggests that the agreement’s full economic potential has not been realized. Despite Morocco’s robust economic growth, the report indicates that this growth is more closely linked to internal factors such as agricultural sector performance and infrastructure development rather than the trade agreement itself.

Diversification and Geopolitical Shifts

The report also explores how Morocco has diversified its economic activities beyond the scope of MAFTA. Notably, Morocco has made significant strides in niche markets like electric vehicle (EV) batteries. While MAFTA was expected to attract U.S. and third-party investments in this sector, the reality has been different. Chinese companies have emerged as key players, leading in “greenfield” investments in Morocco, while U.S. capital has contributed only minimally.

China’s growing influence in Morocco’s economic landscape may partly explain the U.S. reluctance to push for greater American investment. With China’s increased involvement, Morocco’s economic ties are shifting, and the strategic importance of MAFTA in this context appears to be diminishing.

Strategic and Political Dimensions

The report underscores that MAFTA has been more successful in serving political and strategic interests rather than achieving its economic goals. The agreement has maintained a strong bilateral relationship between the U.S. and Morocco, with the Biden administration continuing Trump’s recognition of Moroccan sovereignty over the Sahara territory.

Looking forward, the report suggests that the U.S. could enhance its economic relationship with Morocco by focusing on sectors such as light manufacturing and expanding English-language training opportunities. These steps could potentially bolster mutual economic benefits and leverage Morocco’s growing status as a leading destination for foreign direct investment (FDI) in Africa.

A Need for Reassessment

The evaluation of MAFTA reveals both achievements and shortcomings. While the agreement has successfully deepened U.S.-Morocco relations and contributed to increased trade, it has fallen short of its economic aspirations. The growing trade imbalance and the shift in investment patterns highlight the need for a reassessment of how trade agreements are utilized and adapted to changing global dynamics.

As Morocco continues to navigate its economic future and strategic partnerships, the U.S. must consider how to realign its trade policies to support its objectives in Africa and beyond. The ongoing evolution of global trade and geopolitical relations will undoubtedly shape the

Strengthening Ties: The U.S.-Chile Agreement Enhances Cheese Export Protections

Wed, 09 Oct 2024 16:59:41 GMT

In a significant development for U.S.-Chile trade relations, the two nations have approved a pivotal agreement that bolsters the existing Free Trade Agreement (FTA) between them. This new accord, formalized through an exchange of letters, introduces enhanced protections for U.S. cheese exports to Chile—an essential market for American dairy products.

A Key Market for U.S. Cheese

Chile stands as the largest U.S. cheese market in South America, accounting for more than half of all U.S. cheese exports to the continent. In 2023 alone, U.S. cheese exports to Chile exceeded $55 million. This makes Chile a critical player in the U.S. dairy export landscape, particularly for popular cheeses like parmesan, gruyere, and feta.

Navigating Trade Challenges

Industry Advocacy and Diplomatic Efforts

The International Dairy Foods Association (IDFA) played a crucial role in this process. IDFA, alongside other industry representatives, advocated for these protections by providing feedback to U.S. negotiators and engaging with Chilean officials. Becky Rasdall, senior vice president of trade and workforce policy at IDFA, praised the Biden Administration's efforts, highlighting the importance of protecting existing trade agreements.

“In a period of no new FTA negotiations, it is imperative to protect our existing agreements,” Rasdall noted. “We appreciate the Biden Administration agreeing with this sentiment and responding to the EU’s attempt to limit the benefits of the U.S.-Chile FTA.”

A Win for U.S. Dairy Producers

The new protections represent a significant victory for U.S. dairy producers, ensuring that American cheeses will continue to enjoy preferential access to the Chilean market. This outcome is particularly important in a time when new FTA negotiations are on hold, and safeguarding current trade agreements becomes increasingly vital.

IDFA commended the efforts of U.S. Trade Representative (USTR) and USDA staff in both Washington and Santiago for their successful negotiations. The organization’s collaboration with Chilean members of parliament and staff was instrumental in highlighting the economic impact of GIs and securing favorable terms for U.S. exports.

Looking Ahead

This strengthened agreement underscores the importance of maintaining and enhancing existing trade relationships. By securing additional protections for U.S. cheese exports, the U.S. and Chile reaffirm their commitment to a robust economic partnership. For U.S. dairy producers, this deal not only preserves access to a key market but also reinforces the value of ongoing diplomatic and trade advocacy.

As the global trade environment continues to evolve, the successful negotiation of this agreement serves as a reminder of the critical role that trade agreements play in supporting American industries and fostering international economic relations.

For those interested in the broader context of international trade and its impacts, staying informed about such developments can offer valuable insights into the dynamic world of global commerce.

The Lapse of GSP: A Critical Moment for U.S. Trade Policy and Global Influence

Thu, 03 Oct 2024 15:11:51 GMT

In 2020, the Generalized System of Preferences (GSP) program—a cornerstone of U.S. trade policy that provided duty-free access to goods from designated beneficiary countries—lapsed. Despite ongoing discussions about its significance, it has yet to be reauthorized. This gap has created a cloud of uncertainty for both the beneficiary nations and the businesses that rely on the program. The story of the GSP lapse is not just about a specific trade program but is emblematic of a broader collapse in U.S. trade policy over the past 15 years.

The GSP and Its Impact

The GSP was designed to boost economic growth in developing countries by allowing them to export goods to the U.S. without the burden of tariffs. For many countries, this duty-free access was a crucial element of their economic development strategies, helping them integrate into the global economy and create jobs.

The lapse of the GSP has not only disrupted these economic plans but has also intensified the geopolitical landscape. As the U.S. grapples with domestic political divisions and a rethinking of its trade policies, China has stepped into the breach. Over the past decade, China has become the leading trading partner for many developing nations, offering alternative economic opportunities and investment. The absence of a U.S. alternative like the GSP has accelerated these deeper economic ties between developing countries and China.

The Political and Economic Context

The U.S. trade policy has undergone significant shifts in the past 15 years. Once a champion of free trade agreements that aimed to open global markets and promote economic growth, the U.S. has become increasingly cautious and politically contentious about trade deals. The political landscape has shifted, with debates over trade often reflecting broader ideological divides.

This political volatility has had real-world consequences. The lapse of GSP highlights the difficulties in maintaining consistent and supportive trade policies, which are crucial for both domestic businesses and international development. Without a clear and stable trade policy, businesses face increased uncertainty, and developing countries struggle to find reliable economic partners.

The Geopolitical Implications

The timing of the GSP's lapse is particularly concerning given the growing influence of China. As China deepens its economic relationships with developing countries, it is not just offering an alternative to U.S. trade policies but is also strengthening its geopolitical foothold. This shift has significant implications for U.S. global leadership and influence.

The GSP’s lapse is not just a missed opportunity for economic development but a strategic misstep in the broader context of global trade dynamics. As China’s influence expands, the U.S. faces the challenge of reasserting its role in global trade, supporting economic growth in the developing world, and countering China's growing influence.

Looking Ahead: The Path to Reauthorization

The question now is whether the GSP will be reauthorized and how the U.S. can revitalize its approach to global trade. Reauthorizing the GSP would provide immediate benefits to beneficiary countries and businesses and could serve as a starting point for broader trade policy reforms. It would also signal a commitment to supporting economic development in the global south and countering China's expanding influence.

The Coalition for GSP is hosting a panel to explore these issues, examining the strengths and weaknesses of potential GSP reauthorization and considering how the U.S. can navigate its trade policy challenges. The discussion will focus on how the U.S. can reassert leadership in global trade, support economic growth in developing countries, and address the shifting geopolitical landscape.

In conclusion, the lapse of the GSP is a critical juncture for U.S. trade policy. It presents both a challenge and an opportunity: a chance to reassess and reinvigorate U.S. trade policies to better support economic development and global leadership in the face of growing competition from China. The decisions made in the coming months will have lasting implications for both the U.S. and the global economy.

Ensuring Compliance: Key Reminders for U.S. Customs and Border Protection Drawback Claims

Mon, 16 Sep 2024 17:29:16 GMT

U.S. Customs and Border Protection (CBP) has recently issued a crucial reminder to businesses regarding the compliance requirements for drawback claims. As many companies navigate the complexities of customs regulations, it’s essential to understand the consequences of failing to meet these requirements. CBP’s latest announcement underscores the importance of adhering to established guidelines and provides clarity on the repercussions of non-compliance.

Understanding Drawback Claims

Drawback is a refund of duties, taxes, and fees paid on imported goods that are subsequently exported or used in the manufacture of exported products. This provision is designed to encourage U.S. exports by offsetting some of the costs associated with importing raw materials or components.

However, the process for filing a drawback claim is governed by a series of detailed regulations, including those outlined in CBP regulations, the Automated Commercial Environment (ACE) Business Rules and Process Document, and the CBP and Trade Automated Interface Requirements. Compliance with these rules is essential to ensure that claims are processed smoothly and accurately.

Consequences of Non-Compliance

CBP has emphasized that non-compliant drawback claims can lead to serious consequences. Here are some key points from their reminder:

Liquidation Without Drawback: Claims that do not comply with the applicable requirements may be liquidated without the benefit of drawback. This means that if a claim is found to be non-compliant, the claimant may not receive any refund for the duties or taxes claimed.
Potential Penalties: Non-compliance could result in penalties under 19 CFR 190.62. This regulation provides for penalties in cases where drawback claims are filed improperly, reinforcing the importance of adhering to all requirements.
Revocation of Accelerated Payment Approval: Non-compliance may also lead to the revocation of approval for accelerated payment. This is a significant consequence, as accelerated payment allows claimants to receive refunds more quickly. Revocation of this approval can impact a business’s cash flow and operational efficiency.

Common Examples of Non-Compliance

CBP has identified several specific scenarios that may constitute non-compliance. Businesses should be vigilant to avoid these pitfalls:

Claiming Drawback on Previously Refunded Duties: Drawback claims made on duties or taxes that have already been refunded by CBP or another federal agency (such as duties refunded under the reconciliation test) are considered non-compliant.
Section 232 Duties: Claims for drawback on Section 232 duties, which are imposed on certain imports for national security reasons, are not permitted.
Incomplete Claims: Failure to perfect a drawback claim by adjusting the refund sum to account for any refunds separately obtained after the claim was filed can lead to non-compliance.
Specific Filing Requirements: Claims that do not follow the specific filing requirements for 19 USC 1313(b) and 1313(j)(2) substitution claims may be deemed non-compliant.
Incomplete Submissions: Drawback claims must be submitted in full accordance with the requirements specified in 19 CFR 190.51. Incomplete claims that do not meet these standards are at risk of being denied or penalized.

Navigating Compliance

To avoid these issues, businesses should ensure they are thoroughly familiar with the relevant regulations and requirements for drawback claims. Regularly reviewing compliance procedures and consulting with customs experts can help mitigate risks and prevent costly errors.

For companies dealing with drawback claims, keeping abreast of CBP’s guidance and adhering strictly to all applicable rules is crucial for maintaining eligibility and avoiding penalties. By understanding and addressing the compliance requirements, businesses can better manage their claims and protect their financial interests.

As regulations continue to evolve, staying informed and proactive is key to successfully navigating the complex landscape of customs and trade compliance.

Retention and Increase of Section 301 Tariffs

Mon, 20 May 2024 14:59:27 GMT

The U.S. Trade Representative's Office released their four-year review of the Section 301 Tariffs which call for retaining the duties currently in place along with an increase on entire classes of Chinese imports.

In a global economic landscape rife with competition and challenges, the Biden-Harris Administration has taken decisive action to safeguard American workers and industries from unfair trade practices, particularly those emanating from China. President Biden's economic plan is not just about bolstering domestic industries but also about ensuring fair competition on the global stage.

China's practices, including technology transfer coercion, intellectual property theft, and market-distorting subsidies, pose significant threats to American businesses and workers. The Administration's response, outlined in the recent directives, reflects a commitment to leveling the playing field and fostering an environment where American industries can thrive.

One of the key measures announced is the increase in tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China. This move is targeted at strategic sectors where American investments are substantial, such as steel, semiconductors, electric vehicles (EVs), and medical products. These tariffs aim to counteract the unfair advantages gained by Chinese industries through non-market practices.

The rationale behind each tariff increase is grounded in the need to protect critical American industries and promote domestic manufacturing. Let's delve into some of the sectors affected and the reasoning behind the tariff adjustments:

Steel and Aluminum: By increasing tariffs on steel and aluminum products, the Administration seeks to shield American industries from China's overcapacity and unfair competition. Investments in clean manufacturing projects, supported by legislative acts like the Bipartisan Infrastructure Law, underscore the commitment to revitalizing these sectors while ensuring environmental sustainability.

Semiconductors : Recognizing the strategic importance of semiconductor manufacturing, the Administration is bolstering domestic capacity through significant investments. By raising tariffs on semiconductors, the aim is to safeguard these investments and prevent overreliance on Chinese suppliers, thus ensuring the resilience of critical supply chains.

Electric Vehicles (EVs) : With China's subsidization leading to a surge in EV exports, the tariff hike aims to protect American manufacturers and investments in the burgeoning EV market. The Administration's focus on incentivizing domestic EV production aligns with its broader clean energy agenda and commitment to creating high-quality jobs in the automotive sector.

Batteries, Critical Minerals, and Solar Cells : The tariff adjustments in these sectors are geared towards reducing dependence on Chinese-controlled supply chains. By incentivizing domestic production and addressing vulnerabilities in critical minerals sourcing, the Administration aims to strengthen America's energy security and advance its clean energy goals.

Ship-to-Shore Cranes and Medical Products: These tariff increases are essential for safeguarding key infrastructure and ensuring a robust domestic industrial base for critical medical supplies. By mitigating risks associated with overreliance on Chinese imports, the Administration is prioritizing both national security and public health interests.

A breakdown of duties expect to or have already increased:

Semiconductors: 25% to 50% in 2025

Steel and Aluminum: 0-7.5% to 25% in 2024

Electric Vehicles: 25% to 100% in 2024

Lithium-Ion EV batteries: 7.5% to 25% in 2024

Lithium-Ion Non-EV batteries: 7.5% to 25% in 2026

Battery Parts: 7.5% to 25%

Natural Graphite and Permanent Magnets: 0% to 25% in 2024

Solar Cells: 25% to 50% in 2024

Ship-to-Shore Cranes: 0% to 25% in 2024

Syringes and Needles: 0% to 50% in 2024

Personal Protective Equipment (PPE): 0-7.5% to 25% in 2024

Rubber Medical and Surgical Gloves will increase from 7.5% to 25% in 2026

President Biden's approach to trade underscores a commitment to fair competition, strategic investment, and the protection of American workers. Rather than resorting to blanket tariffs or isolationist policies, the Administration is leveraging targeted measures to address specific challenges while fostering cooperation with international partners.

Moreover, the Administration's emphasis on comprehensive economic policies, such as the Investing in America agenda, reflects a holistic approach to revitalizing domestic industries and creating sustainable, high-paying jobs. By aligning trade actions with broader economic goals, President Biden aims to build a more resilient and competitive American economy.

In conclusion, the recent directives on trade practices exemplify the Biden-Harris Administration's proactive stance in safeguarding American interests and promoting fair competition in the global marketplace. Through targeted tariff adjustments and strategic investments, the Administration is laying the groundwork for a stronger, more resilient economy that benefits American workers and industries alike.

Reference: "FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China's Unfair Trade Practices"

https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/

Newsletter | Apr 2024

Mon, 01 Apr 2024 13:54:11 GMT

Updates to ACE Portal and requirement changes to Entry Type 86

TOP NEWS

CBP made an update to the Automated Commercial Environment or ACE Portal which will be useful to brokers and filers. Import refunds are now visible through the Broker’s ACE Portal Account. Using the REV - 603 report, you can now search for refunds by utilizing refund date search parameters.

WHATS HAPPENING AT ITM?

Congratulations to Jill LaMadeleine on reaching her 30-year work anniversary! What an incredible milestone. The team at ITM celebrates all of her achievements over the years and wishes her many more successful years ahead.

FROM CBP

It’s important to note that starting April 13, 2024, CBP will enforce the requirements to file Entry Type 86 transactions prior to or upon the arrival of the cargo. If an Entry Type 86 is filed after the cargo has arrived, the entry will be rejected, and the cargo will be held until a different and appropriate entry is made. Additionally, goods subject to a Partner Government Agency (PGA) requirement will be ineligible for release from manifest entry procedures. This update underscores the importance of timely and accurate filing to ensure smooth processing of cargo.

Understanding Duty Drawback: A Comprehensive Guide

Tue, 12 Mar 2024 18:04:16 GMT

In the intricate world of international trade, various mechanisms exist to facilitate smoother transactions and encourage commerce across borders. One such mechanism is duty drawback, a process that offers significant benefits to businesses engaged in importing and exporting goods. In this guide, we will delve into the concept of duty drawback, its benefits, and how businesses can leverage it to their advantage.

What is Duty Drawback?

Duty drawback is a customs procedure that allows businesses to claim a refund of certain duties, taxes, and fees paid on imported goods when those goods are subsequently exported or used in the production of exported goods. Essentially, it serves as a mechanism to alleviate the burden of import duties, encouraging businesses to engage in international trade.

How Does Duty Drawback Work?

The process of duty drawback typically involves several steps:

Importation of Goods: A business imports goods into a country, paying applicable customs duties, taxes, and fees at the time of importation.
Exportation or Use in Production: The imported goods are either exported to another country or used in the production of goods that are subsequently exported.
Claim Submission: The business submits a duty drawback claim to the customs authorities, providing documentation to prove that the imported goods were indeed exported or used in the production of exported goods.
Secure Privileges: Since duty drawback is a privilege and not a right, a claimant will want to apply for and obtain privileges from Customs. Once approved, this will allow the payment of claims in an expedited manner.
Review and Approval: Customs authorities review the claim to ensure compliance with regulations and verify the validity of the claim. With the above mentioned privileges,, the business then receives a refund or credit for the duties, taxes, and fees paid on the imported goods.

Types of Duty Drawback

There are various types of duty drawback, each catering to different scenarios and requirements:

Direct Export Drawback: This type of drawback applies when imported goods are exported in the same condition as they were imported, without undergoing any further processing or manufacturing.
Indirect Export Drawback: Indirect export drawback applies when imported goods are used as inputs in the production of exported goods. In this case, the drawback is claimed based on the quantity or value of the imported inputs used in the exported products.
Substitution Drawback: Substitution drawback allows businesses to substitute domestic goods for imported goods in the production process. This can be advantageous when domestic inputs are cheaper or more readily available than imported ones.
Unused Merchandise Drawback: If imported goods are exported or destroyed without being used in the production of other goods, businesses may be eligible for unused merchandise drawback, wherein they can claim a refund of the duties paid on the unused goods.

Benefits of Duty Drawback

Duty drawback offers several benefits to businesses engaged in international trade:

Cost Savings: By reclaiming import duties, businesses can significantly reduce their production costs, making their products more competitive in the global market.
Cash Flow Improvement: Duty drawback provides businesses with a source of cash flow, as they receive refunds for duties paid on imported goods. This liquidity can be reinvested into the business or used for other operational expenses.
Promotion of Exportation: Duty drawback serves as an incentive for businesses to export goods, thereby promoting international trade and economic growth.
Competitive Advantage: Businesses that leverage duty drawback effectively gain a competitive advantage in the marketplace, as they can offer lower prices or higher profit margins compared to competitors who do not utilize duty drawback.

Challenges and Considerations

While duty drawback offers significant benefits, businesses should be aware of certain challenges and considerations:

Complexity of Regulations: Duty drawback regulations vary from country to country and can be complex to navigate. Businesses must ensure compliance with all applicable regulations to avoid penalties or delays in receiving refunds.
Administrative Burden: The process of claiming duty drawback involves extensive documentation and administrative procedures, which can be time-consuming and resource-intensive for businesses.
Limitations and Restrictions: Some countries impose limitations or restrictions on duty drawback, such as time limits for filing claims or exclusions for certain types of goods. Businesses should carefully review the eligibility criteria and restrictions before pursuing duty drawback.
Cost-Benefit Analysis: Before engaging in duty drawback, businesses should conduct a thorough cost-benefit analysis to assess the potential savings and determine if the administrative burden outweighs the benefits.

Duty drawback is a valuable tool for businesses engaged in international trade, offering cost savings, cash flow improvement, and competitive advantages. By understanding the intricacies of duty drawback and navigating the associated challenges effectively, businesses can maximize their benefits and enhance their competitiveness in the global marketplace.

Understanding the Impact of Interest on Delayed Refunds in Duty Drawback Cases

Thu, 07 Mar 2024 18:42:13 GMT

The implications in the case of Union of India and ORS. v. Patil and Sons Belgaum

Understanding the Impact of Interest on Delayed Refunds in Duty Drawback Cases

In a recent ruling, the Honorable Supreme Court addressed a critical issue concerning delayed refunds of deemed-export duty drawback. The case of UNION OF INDIA AND ORS. VERSUS M/S. B.T. PATIL AND SONS BELGAUM (CONSTRUCTION) PVT. LTD. sheds light on the entitlement of interest on delayed refunds, especially in cases where duty drawback claims are involved.

M/s. B.T. Patil and Sons Belgaum (Construction) Pvt. Ltd. (“the Respondent”) found themselves entangled in a dispute over the refund of duty drawback related to their civil construction project for the Koyna Hydro Electric Power Project. Despite completing the project in March 1996, they faced obstacles in obtaining the refund under the deemed export scheme.

The Directorate General of Foreign Trade (DGFT) initially denied the refund, citing ineligibility under the Exim Policy, 1992-1997. However, subsequent circulars and clarifications paved the way for the Respondent to claim the refund, albeit with significant delay.

The Respondent pursued their claim for interest on the delayed refund through legal channels. The case eventually reached the Supreme Court, which upheld the decision of the High Court of Karnataka, awarding 15% interest on the delayed refund of duty drawback. The interest was calculated from the date of the refund application.

The Supreme Court's ruling underscores several crucial points:

Deemed Export Status: The Court recognized the supply of goods for the construction project as a case of ‘deemed export,’ making the Respondent eligible for duty drawback benefits.
Delayed Refunds: Despite the delay in processing the refund, the Court affirmed the entitlement of interest, emphasizing the importance of timely resolution in such matters.
Legal Precedents: The Court referred to previous rulings and legal provisions, establishing a framework for determining interest on delayed refunds in duty drawback cases.
Interest Calculation: The Court clarified the methodology for calculating interest, considering the period between the refund application and its eventual payment.

This ruling carries significant implications for taxpayers involved in duty drawback claims such as:

Timely Claim Processing: Taxpayers should ensure prompt submission of refund applications to avoid delays in processing and payment.
Legal Awareness: Understanding relevant legal provisions and precedents can strengthen taxpayers’ positions in disputes over duty drawback refunds.
Financial Impact: The award of interest on delayed refunds underscores the financial implications of administrative delays, highlighting the importance of efficient refund mechanisms.

The case of M/S. B.T. PATIL AND SONS BELGAUM (CONSTRUCTION) PVT. LTD. serves as a reminder of the complexities surrounding duty drawback refunds and the importance of timely resolution. By upholding the entitlement of interest on delayed refunds, the Supreme Court reaffirms the rights of taxpayers and emphasizes the need for procedural efficiency in tax administration.

By Jack LaMadeleine - March 7th, 2024

Reference: “Interest of 15% is allowed on delayed refund of deemed-export duty-drawback” by CA Bimal Jain

https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=12349

Newsletter | Mar 2024

Fri, 01 Mar 2024 21:29:49 GMT

Department of Commerce's new policies and trade community advancements

TOP NEWS

On February 14, 2024, the Department of Commerce initiated its less-than-fair-value and countervailing duty investigations on Certain Paper Plates from the China, Thailand, and Vietnam. These investigations have been assigned the following case numbers: A-570-164 and C-570-165 (China) A-549-849 (Thailand) A-552-839 and C-552-840 (Vietnam). Importers should be aware that entries of subject merchandise made after the initiation of an investigation may retroactively be subject to antidumping and/or countervailing duties.

WHAT'S HAPPENING AT ITM?

We have an entire library of podcasts and webinars on our website that cover topics of interest for our clients as well as any importers and exporters. Check them out!

https://www.tariffmanagement.com/podcast-library

https://www.tariffmanagement.com/webinar-library

FROM CBP

The Office of Trade has issued 'A Guide for the Public: How CBP Sets Bond Amounts'. They have worked with public stakeholders, the Office of Finance, Office of Field Operations, Office of Chief Counsel, and Regulations and Rulings since 2020 to update CBPs' directive from 1991 to reflect current policies and procedures. The joint nature of this endeavor presents an opportunity for CBP and the trade community to continually maintain and progress the bond program in support of CBP's priority to facilitate lawful trade and protect U.S. revenue.

Newsletter | Feb 2024

Thu, 01 Feb 2024 21:02:37 GMT

Recent news from CBP regarding cargo messaging and expediting cargo shipping

Newsletter | Jan 2024

Mon, 01 Jan 2024 19:54:10 GMT

We are excited to announce our first monthly newsletter! Our goal of this new endeavor is to keep our clients and the companies in our network up to date with all information regarding drawback, CBP and more!

Free Trade Certification

Tue, 10 May 2022 11:45:00 GMT

Are your customers asking you to certify your items for free trade under a free trade agreement? Do you source from or ship to a country that participates in a free trade agreement with the U.S.? Do you know how to manage that process in order to alleviate the duties paid? A free trade agreement (FTA) is an agreement between two or more countries where the countries agree on certain obligations that affect trade in goods. Currently, there are 14 Free Trade Agreements in effect in the U.S. with 20 different countries. An importer collects and maintains the information to support the FTA qualification. An exporter from the U.S. is required to complete a declaration verifying that their goods qualify for free trade with the participating country. The rules associate with FTAs are complicated and the analysis is intricate. There are multiple steps to the process and each one must be completed in order to move onto the next:

Classify the product according to the HTSUS in order to determine the rule of origin for the specific finished product.
Choose a preference criteria from the 4 available.
Use the rule of origin to determine the qualification of the finished good.

If you are already preparing certificates, are you confident that your certificates are completed accurately? It is imperative that you have knowledge of the product, it’s components, the HTSUS and appropriate rules pertaining to them all in regards to qualification. The most widely recognized and known FTA is the United States Mexico and Canada Agreement (USMCA), which was formerly NAFTA. As the name would suggest, this agreement is valid between the U.S., Canada and Mexico. Most companies know about USMCA, but do you know if you qualify for any of the others? When it comes to the USMCA, Canada is very strict. They are coming back regularly and requesting support documentation. If your back up is not compliant, you are exposing yourself to liabilities that could include excessive fines and potentially being banned from importing. We have seen many errors by companies that try to manage their own programs. Some are still using NAFTA forms years after the implementation of USMCA, many of the forms are filled out incorrectly or incompletely and numerous have classification errors.
ITM works with many companies to help coordinate their free trade programs. Together, we identify all the exported products and their components. Then, ITM analyzes both the finished product and its components for FTA eligibility, works with your vendors in identifying and analyzing all of the components of your products and complete the documentation required to support the claims of FTA eligibility.

Contact us today if you would like to review your process or begin to take advantage of any of the 14 Free Trade Agreements available.

Do you rely on your broker to classify your imported products?

Mon, 28 Mar 2022 21:35:00 GMT

How proper classification can equate to big savings for your company.

Do you import? Do you rely on your broker to classify your imported products? Import brokers have a general understanding of the Harmonized Tariff Schedule of the United States (HTSUS), and classify thousands of separate items across hundreds of different industries. But do they really know what your products are or how they are intended to be used? The classification process is extremely intricate and requires an understanding of both the HTSUS and the merchandise being classified. We at ITM have been classifying merchandise according to the HTSUS for nearly 40 years and in doing so have found that a lot of merchandise is not always classified correctly. In order to properly classify an imported item, one must understand how to navigate the HTSUS that includes over 10,000 classifications that are broken down by Sections, Chapters, Headings and ultimately Subheadings. Subsequently, one must also understand what the product is, what it is used for and how it is made. For items that are not very specifically provided for, the process is very complex and quite often mistakes are made. A lot goes into an accurate analysis and classification. A common misconception is that every item is accounted for in the HTSUS. This is not the case. More often than not, an evaluation involves a significant knowledge of the product itself to determine where it belongs. A product may be designated in the HTSUS according to what it is but it can also be defined according to how it is used. An inaccurate classification, causing an underpayment of duty, can result in the burden of monetary penalties as well as an interruption of receipt of your merchandise. Conversely, an incorrect classification where too much duty is paid, is giving away money that could fall to your organization’s bottom line. Not everything is misclassified. 90% of imported merchandise is classified properly. Of the 10% that is improperly classified, 80% results in millions of dollars of over-payment of duties. The importer is obligated to properly classify imports even if there is no change in the duty rate. Therefore, in order to be compliant, it is imperative that importers exercise their due diligence to ensure that their items are properly assigned upon importation. An importer should initiate periodic reviews of the classification of merchandise. CBP reviews merchandise on a daily basis and writes hundreds, if not thousands, of rulings as to their positions on how individual items should be classified. As these change over time, you should review your classifications regularly in order to remain compliant and up to date. A specific item classified under one HTSUS number last year might have a totally different HTSUS today. Don’t settle for generic. Demand an in-depth analysis of your products when determining how they fit into the HTSUS. ITM specializes in providing a meticulous evaluation of your product while determining the precise tariff classification. A portion of the millions of dollars of overpaid duties might be yours!
Join our webinar and learn how proper classification can equate to big savings for your company - join our webinar:

Does your company have a viable drawback opportunity?

Fri, 11 Feb 2022 20:09:00 GMT

Duty Drawback is a refund from Customs, for 99% of the duties paid on imported materials that are subsequently exported, destroyed or used in the manufacture of exported goods.

Today, only about 25 percent of eligible duty is being recovered. This means that $5 billion dollars goes unclaimed for drawback, and that money might be yours. So, how do you know if you are a candidate for a lucrative duty drawback program?

You import and export. Excellent!
How much duty do you pay annually in duties?
What percentage of your overall sales are exported?

This quick calculation will provide you with a basic estimation of what you may be entitled to recover. But don’t get discouraged if that number is not significant or if you are not an importer and/or exporter. Let’s dig deeper :
Do you buy items domestically that are imported by your vendor upon which they pay duty?

Let’s find out what kind of duty they are paying on the items that they sell to you and finish the second half of the equation. That duty is getting passed onto you in the cost and with proper support data, you can claim it back once the items are exported.
What if you don’t export?
You sell domestically but your customer exports?

Let’s flip the scenario and find out how much of your imported item your customer is exporting. You may have one domestic customer or many, but their export activity can also be used in your drawback program.
Do you want to learn more?

Join us for our panel discussion on determining how much of that $5 billion dollars might be yours!

TFTEA starts this month!!

Wed, 06 Feb 2019 13:16:00 GMT

The new drawback regulations are written and will take effect on February 24, 2019.

The new drawback regulations are written and will take effect on February 24, 2019. That’s less than a month from now!! ITM is prepared to continue filing on behalf of all of our clients and we are excited about the possibility of new opportunities that will now exist under the new guidelines. In most cases, under TFTEA, claimants can claim duty drawback using the 8-digit HTSUS number as the connector between import and export (rather than the part number as they had in the past). This opens up a huge opportunity for current claimants as well as companies that have never considered duty drawback before because they found it prohibitive.
If you import products under an HTS number and export different products that are sourced or manufactured domestically, but would have been imported under that same HTS number had they been sourced internationally, you can substitute one for the other. Here is an example. The HTS heading 6103.42.10, covers trousers, breeches and shorts of cotton, for men and boys. If you import boys cotton pants from China and export U.S. manufactured or domestically sourced men’s cotton shorts from the U.S., you can claim the duties paid on the imported pants when you export the shorts that are of U.S. origin. Here’s another example. HTS classification 8205.30.30 covers all sorts of tools, such as planes, chisels, gouges as well as similar tools for cutting wood. If you import a plane under this HTS number and pay a duty on it and export a chisel, which also falls under this HTS number, you can claim the duty paid on the imported plane when you export the chisel. While there are some financial caveats to the possibilities, it is certain that the new drawback law will afford more opportunity. Contact us today if you feel that your company may be able to take advantage of the new law and begin filing duty drawback. As always, we offer a no cost analysis of your situation.

Where do we stand with TFTEA

Mon, 08 Oct 2018 20:33:00 GMT

Two years in the works, the final transition to TFTEA is set to occur on February 24, 2019.

The deadline for the implementation of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), is looming. Two years in the works, the final transition to TFTEA is set to occur on February 24, 2019.
Customs has maintained that the ultimate goal of TFTEA is to streamline and simplify the drawback process. At this time, there are no formal regulations in effect, but the guidelines have been released and reviewed extensively by the trade. After much conversation and deliberation, the trade was allowed and has formally submitted a response to Customs on these proposed regulations and now waits the allotted 90 days to find out how they have been received and what the final determinations will be.
While the initial overall plan with TFTEA was to file duty drawback using the HTS number (and eliminating the part number), it would appear that it may not be that easy after all.
For unused direct identification drawback, the proposed guidelines make reference to using an indicator in addition to the HTS number. It is our belief that this indicator will or can be the part number. Therefore, it would seem that we will still require the same data as before and continue to prepare the unused direct identification claims in essentially the same way with possibly some minor tweaks.

As for unused substitution and manufacturing drawback, that indicator does not come into play. As we transition to filing drawback according to the HTS number, as outlined in the current guidelines, we will potentially be restricted with entries that can be used. As currently written, entries that are used to file CORE claims (pre-TFTEA), are restricted or disallowed when it comes to TFTEA.
Also, we are led to believe that for unused substitution and manufacturing drawback, a claimant will need to consider not only the average value of the items on the line of the entry, but also the corresponding export value. They will need to use the “lesser of” the two when claiming drawback in order to not overclaim. The regulations will clarify these restriction and parameters. In the meantime, we are aware of the possibilities and planning accordingly.
While the guidelines provided a good sense of what we can expect with the regulations, until they are finalized and released we will not know for certain. As we continue to be involved in monthly teleconferences and conversations, ITM is fully prepared for the final implantation of TFTEA on February 24, 2019. Contact ITM today with any questions or concerns regarding TFTEA.

Everything you need to know about the Section 301 Tariffs

Tue, 25 Sep 2018 19:03:00 GMT

This latest round of Chinese imposed tariffs hits U.S. importers harder and ultimately the consumers will begin to feel their impact as well.

In April of 2018, the current administration announced that it would impose increased tariffs on items imported from China. By April of 2018, the Office of the US Trade Representative (USTR), released the first list of 1,300 tariff numbers subject to an additional 25% duty. That list, referred to as US List 1, went into effect on July 6th and included steel and aluminum. The USTR announced that this would subsequently be followed by a List 2 and 3.

While the first list forced U.S. manufactures to negotiate the added cost (by either cutting back in other areas or passing the price onto consumers), the subsequent lists have made it harder on the U.S. importer and the consumer directly.

Taking effect on August 23, 2018, US List 2 includes plastic and electrical items used in manufacture and also motors, generators and motorcycles. This round of Chinese imposed tariffs hit the U.S. importers harder and ultimately the consumers began to feel their impact.

US List 3 was announced on September 17, 2018 and took effect on September 24, 2018. This latest round brought an additional 10% tariff immediately (according to the HTS number), and saw an increase to 25% on most of those items by June of 2019. This list includes $200 billion dollars’ worth of imports from China and almost 6,000 HTS numbers. If you import from China but have not been affected by List 1 or 2, this 3rd list most likely is of concern.

And now there is a proposed List 4 on the horizon. This next list has been broken in to 2 sub lists, A and B, and are expected to be implemented on September 1, 2019 and December 15, 2019, respectfully. This list is expected to include almost all remaining imports from China that are not yet subject to the Section 301 tariff. List 4 encompasses approximately $300 billion worth of Chinese imports.

The reality is that if they aren’t already, companies will soon be forced to absorb these additional charges or pass them onto their consumers. Ultimately, this increases U.S. companies’ inabilities to remain competitive with each other as well as in a global market.

While the future of the Section 301 Tariffs is unknown, importers should be mindful of their impact and plan for their permanence.

The good news is that with the exception of US List 1, U.S. companies can claim that additional duty back with a duty drawback program. If you are importing items from China, that are ultimately exported, it is now more important than ever to establish a drawback program.

Contact ITM today if your imports are or will be subject to this additional duty. We can help you learn more about recouping the duties paid as well as set up and manage your duty drawback program.

Preparing for a smooth transition to TFTEA drawback

Thu, 14 Dec 2017 19:56:00 GMT

Navigating through a new, streamlined process

The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), went into law on February 24, 2016. The TFTEA amends drawback rules and removes some of the constraints on substitution drawback and overall makes filing easier. Essentially, it eliminates the “commercially interchangeable” standard for substitution and allows for filing drawback for any items classified under the same eight-digit tariff code. After several postponements, deployment is scheduled for February 24, 2018. As we have been waiting for the Secretary of the Treasury and CBP to release the new regulations pertaining to TFTEA, ITM remains very active with the American Association of Exporters and Importers (AAEI) and NCBFFA Drawback Committees that are working with Customs. In fact, we participated in a meeting just this week. While the implementation of TFTEA looms, there is very little information available from Customs about how the Regulations will be altered, the implementation of the changes necessary in the Automated Commercial Environment (ACE) system and how the process will specifically function. ITM has have been following the developments closely, and while nothing is formal, there have been many inferences and suggestions as to what we can expect. Using only the data available in ACE, U.S. Customs will not have access to specific invoice information. With the elimination of this data, they have proposed an implementation of an average price per line item being used as the unit price. This opens up a lot for discussion since an importer can bring many things in under the same HTS with significantly varying unit prices. Using the average will allow you to file with information available on ACE, but may award you substantially less or significantly more drawback to which you are entitled. Further, there is discussion that TFTEA drawback will not allow the use of line items from entries that were used in claims prior to TFTEA. The elimination of certain data from inclusion in claims could not only present an accounting issue for some drawback filers and/or their providers but could also significantly affect drawback returns. It is imperative that companies make preparations for the pending implementation of the changes, even though we remain unsure as to what they will specifically entail. ITM has already started to make accommodations based on the frequent meetings with the Drawback Committees and the limited information that has been provided by Customs. We are prepared to continue filings for our existing clients as well as help new ones navigate the changes without missing a beat. Contact us now if you would like to ensure a smooth transition to TFTEA drawback or are interested in getting a program up and running under the new and more flexible standards.

Duty Drawback is Being Simplified!

Wed, 13 Sep 2017 00:00:00 GMT

Did you hear that Customs is simplifying the duty drawback regulations?

Did you hear that Customs is simplifying the duty drawback regulations? Have you avoided starting a program because it’s too complicated, too frustrating or just too much work?

Effective February 24, 2018, it will be easier and less time consuming to file duty drawback. The new legislation:

Will rely upon the Harmonized Tariff Schedule Number (HTS number)
Eliminates the concept of commercial interchangeability entirely
Includes a provision that allows a claimant to file under the existing law during a one year transition period (until February 23, 2019)

For a free evaluation to determine if your company can share in the $2,000,000 that’s left unclaimed every year, contact us today !

What You Should Know About Free Trade Agreements

Wed, 01 Mar 2017 00:00:00 GMT

47% of U.S. goods that were exported in 2015 went to FTA partner countries

Utilizing the benefits associated with Free Trade Agreements (FTA’s), is one of the best ways for U.S. exporters to sell their goods and services in foreign markets. Because there are fewer trade barriers, FTA’s enable U.S. companies to compete internationally. According to the International Trade Administration, 47% of U.S. goods that were exported in 2015 went to FTA partner countries. Those exports totaled $710 billion dollars. Many companies do not take advantage of the savings afforded them by participating in trade with FTA countries because they (1) are not aware of them, (2) do not understand them, or (3) do not have the resources to implement them.

Step 1: In order to benefit from what a FTA has to offer, one must first know which countries actively participate in free trade with the U.S. To determine which FTA’s are currently in effect, click on the free trade agreement website link below where you can find a complete listing.
http://trade.gov/fta/

Step 2: Understanding the details of a FTA is difficult. In order to take advantage of these agreements and benefit from the reduced duty payment, one must first understand the regulations and then perform the necessary qualification determination. This analysis begins with an understanding of the Harmonized Tariff Schedule (HTS), to ensure that the goods are properly classified.

Step 3: Once the goods have been classified, the exporter must determine and understand the rules by which the good will qualify under the appropriate Harmonized Tariff heading. The qualification will involve either a tariff shift ( going from one HTS number to another as the result of a manufacturing process ), a determination of regional value content ( how much value is added during the manufacturing process ), or a combination of both.

Most companies do not have the resources or the expertise to do the proper free trade analysis. Often companies will fill out the certificates of origin without a complete understanding of the rules and regulations. This can result in a Custom’s audit (by U.S. Customs or the Customs Officials of the country you are exporting to), a possible imposition of penalties and ultimately a disruption in your exporting and/or importing pattern.

These potential issues should not stop you from taking advantage of all that a FTA has to offer. For over 30 years, ITM has been helping companies save millions of dollars while ensuring complete compliance. The experienced staff at ITM has a vast knowledge of the Regulations and extensive experience with various FTA’s across a diverse variety of industries. We can help you navigate the process with minimal effort on your part.

Contact us at www.tariffmanagement.com for a no cost analysis of your situation and a solid proposal to start saving you money.

Guide to 3 Key Factors for Classification

Tue, 27 Dec 2016 00:00:00 GMT

How incorrect classification of imports can cost you more than HTSUS requires.

The first thing you will need to determine is the last time your imports were classified according to the Harmonized Tariff Schedule of the United States (HTSUS). Even though the HTSUS does not frequently change, U.S. Customs and Border Protection does issue rulings almost every day that can directly affect the classification and duty rates of imported merchandise.
Perhaps simultaneously, you need to determine who did the classification of your imports. The classification of imported merchandise is very complex. It requires the cooperative effort of people that have technical knowledge of your merchandise as well as people that understand the HTSUS. Too often either the technical people classify the merchandise without expert knowledge of the HTSUS or your import broker does the classification without extensive knowledge of the merchandise.
The classification of imported merchandise is more of an art than a science. It is very seldom that the exact parameters of your merchandise will be defined in the tariff. The determination of the correct tariff is not black or white but usually lies within the gray area. Rulings must be carefully checked, the explanatory notes (international guidelines) must be reviewed, and all technical aspects of the merchandise known.

Our experience has shown that about 90% of the merchandise imported into the United States is classified properly. This is because most of the importers are aware of the 3 key points mentioned above and do what’s necessary to minimize their duty obligations. In the other 10% of the cases, where the merchandise is misclassified, the importer is most likely paying more duty than is necessary. Under the law, it is the importers responsibility to classify their merchandise but most of them leave that task to their customs broker. The broker usually does not spend the time and/or does not have the technical ability to make the proper determination. In order to assess your situation, contact International Tariff Management and we will conduct a contingency based audit to help you possibly minimize your duty obligation.

3 Key Factors to a Viable Duty Drawback Program

Wed, 30 Nov 2016 00:00:00 GMT

The first thing you need to do is evaluate the connection between your imports and your exports. On a macro scale, you will need to determine the amount of duty you pay per year on imports (e.g. $250,000). Next, identify what percentage of your total sales is exported (e.g. 10%). Now multiply the percentage of exports times the amount of duty paid per year on imports, you will get a ball park estimate of your duty drawback recovery potential ($25,000 per year in this example). Of course every import is not exported, but this is a good calculation to use in order to establish a general starting point. The duty drawback regulations allow a claimant to go back 3 years when claiming drawback on exports, so using the example above this company would get an initial potential recovery of $75,000.

If after using the calculation method above, you find that pursuing a duty drawback program seems viable, the next aspect for consideration is the clarification of the exporter of record. By law, the exporter of record is the party entitled to claim duty drawback. If you are not the exporter of record, those rights can be transferred back to you by the exporter of record, but this is an additional step that warrants consideration.

The third point to assess is your company’s import history and available supporting documentation. You need not be the direct importer in order to claim duty drawback. If you obtain imported merchandise from a domestic third party, you can use that material in a duty drawback program by obtaining certificates of delivery. Again, this is an additional step in the process, one in which can be simplified by acquiring the services of a duty drawback professional.

Once you have determined that you have a viable duty drawback program, a potential claimant will need to obtain permission from U.S. Customs and Border Protection in order to file the duty drawback claims. These permission letters include accelerated payment, waiver of prior notice, and in the case of a manufacturing process, a specific or general drawback ruling. When the applications have been filed with Customs, the duty drawback claims can then be submitted. It is imperative that a claimant files the older exports first, most importantly because you will begin to lose the ability to claim them once you exceed the statutory 3-year period. Once your applications are approved, payment should be received from Customs in approximately 30 days.

How our client saved $85,000 in duties

Mon, 16 May 2016 00:00:00 GMT

Correctly classifying your imports can result in significant tariff reductions:

Is this a pen or is it a chemical product?

While this may sound like an insignificant distinction, where this item is classified according to the Harmonized Tariff Schedule of the United States will determine how much duty the importer pays on that item. The item above is a correction pen of course and according to the Harmonized Tariff Schedule of the US, it is properly classified as a chemical product. Our client who was importing the correction pens was incorrectly classifying them as pens. When we conducted our review, protested the incorrect classification and received approval of the correct classification, we saved our client over $85,000 a year.
Our experience has found that about 10% of all imports are misclassified resulting in an overpayment of duties due. These misclassifications can be caught in a review conducted by ITM. Things are not always what they appear to be according to the harmonized tariff schedule.

How To Benefit From Free Trade Agreements

Mon, 14 Mar 2016 20:20:00 GMT

Opportunities for importers & exporters

Did you know that there are currently 14 free trade agreements in effect in the United States? Companies that know how to navigate the intricacies of the Customs regulations are saving millions of dollars affording them a financial advantage. Many of us have heard of the North American Free Trade Agreement, or NAFTA, but there are many other countries that are involved in free trade agreements with the United States in addition to Canada and Mexico. Some of these other countries include; Australia, Korea, Singapore and Chile, just to name a few. Are you participating in trade with a country that has special privileges? Distinct expertise is required to analyze products in determining if they meet the criteria necessary to qualify for free trade. These determination factors include; regional value content analysis, tariff shifts determination and classification review of products according to the Harmonized Tariff Schedule of the US. These are very confusing to understand and the evaluation is only the first step. Upon the completion of the appropriate analysis and the determination of eligibility, properly completed support documentation is required to benefit from the agreements while remaining in compliance and to ensure the avoidance of penalties. ITM works with a variety of U.S. companies that are importers and/or exporters of a wide range of products that qualify under a variety of free trade agreements. Do you import and export from a foreign country that may be involved in a free trade agreement with the U.S? Contact us today for a free no obligation review of your circumstances to see if you can save money while ensuring compliancy.

How Duty Drawback Works

Mon, 29 Feb 2016 20:12:00 GMT

Are you leaving money on the table?

Hi, my name is Jill LaMadeleine and I work as a licensed Customs broker with International Tariff Management. ITM has been in business for 30 years and during that time we have generated over 50 million dollars in savings for our clients. We specialize in duty drawback, classification reviews and free trade agreements. If you are an importer and/or an exporter, you can directly benefit from the services that we provide. Let me show you how!
Duty drawback is a law that was put on the books in 1789. It was initiated to encourage exporting from the United States as well as to support manufacturing in the U.S.
To understand drawback simply, if you import something into the US, pay a duty or tax on it and export it as is, or as part of a US manufactured product, you can recoup 99% of the duty paid on the import upon the export. Today, only about 25% of eligible duty is being recovered from the US government. That is $500 million dollars of a potential $2 billion dollars. This means there is $1.5 billion dollars still available and we would like to help you claim your portion back.
You need not be the direct importer or the direct exporter of a product in order to claim duty drawback. We work on drawback programs with many domestic manufacturers and resellers of imported product. ITM provides all of the necessary guidance and support required to establish and manage your duty drawback program.
Y our company might be leaving money on the table that can drop to the bottom line. Let us review your circumstances to see if any part of that $1.5 billion dollars is yours.

PEM America Receives Over $250,000 in Duty Drawback

Wed, 17 Feb 2016 00:00:00 GMT

PEM America is an importer, distributor, and manufacturer of "top of the bed" textile products such as quilts, comforters, and pillows. We sell to the major department stores. Our products are manufactured principally in The People's Republic of China. All of our products are subject to a duty and yet, at PEM, we were exporting products and not recovering any of the associated duties. There was no system in place here. Once we became acquainted with International Tariff Management, what a world of difference it made. We had tremendous success from the very beginning. It was really just a matter of several months for us to see the drawback of customs duties. ITM has collected hundreds of thousands of dollars for PEM America, none of which we would have recovered without their help. I think in so many cases, [duty drawback] is an overlooked cash reserve. There is no question and there is no hesitancy in my recommendation of ITM. I would recommend ITM to any importer who pays customs duties. If you're not going to use this service, you'll be leaving an awful lot of money on the table.

Guide To Duty Drawback

Wed, 20 Jan 2016 20:51:00 GMT

An educational resource for importers and exporters

We are pleased to produce this new guide as an educational resource. Every year, more than 1.5 billion dollars of refundable customs duties go unclaimed. Importers and exporters should be aware that they may be entitled to refunds of their duties paid on imported goods. This new guide introduces the concept of duty drawback and serves as your starting point for an informed approach to reducing your total duty burden.

BOLSTER YOUR COMPETITIVE ADVANTAGE

When participating in a duty drawback program, you are able to sell your products into foreign markets at more competitive prices than you would if you still had to account for the duties that are paid on the imports. Many companies today are sourcing dutiable raw materials as well as finished goods from all over the world. If these imported items are ultimately being exported, you may be missing out on a 99% refund of the duties paid on the import upon export.

Many imported goods are subject to high amounts of duty. The duty rate varies according to the type of commodity and from where it is being sourced. Some industries, such as the apparel industry, can be subject to duties as high as 30%. If you try to absorb this cost upon import and then sell your finished product internationally, it can substantially drive up costs ultimately rendering companies unable to compete in the foreign market. The ability to get back these duties when these products are exported out of the country is a big benefit in remaining competitive.

EXPERIENCE CAN EXPEDITE YOUR RETURN

With over 30 years of experience in providing tariff management services, we work very closely with the U.S. Customs Service. Throughout these years, we have established a professional reputation and close relationship with Customs offices and personnel around the country. We have achieved credibility and earned their respect by strictly adhering to the Customs regulations while legitimately supporting all of our requests and submissions filed with the Customs office. Gaining this type of credibility takes years of consistency and steady dedication to the rules and regulations of the U.S. Customs Service.

AN EFFECTIVE, SYSTEMATIC APPROACH TO DUTY DRAWBACK

Enable your company to profit by reducing the costs of doing business in the fiercely competitive global economy. A properly managed duty drawback program converts previously discarded dollars to profits and consists of:

Attention to detail
Proper record retention
Adherence to regulations

The savings generated by dedication to these areas will help you negotiate better purchase arrangements and allow for more lucrative sales contracts.

GOOD PARTNERS MAKE COMPLIANCE EASY

Staying on top of the regulations is required, but ITM doesn’t stop there. We remain actively involved in a number of trade organizations such as The American Association of Importers and Exporters and The Customs Brokers Association, where we are an active member of the Drawback Committee. This involvement keeps us on the leading edge of compliance and helps us participate in the shaping of the regulations in the future.

The process of gathering the tremendous amount of data and support documentation required can be quite cumbersome for an inexperienced claimant. Our proficiency and credibility has allowed us to develop a procedure that streamlines this practice. Using highly organized methods along with our industry approved proprietary software program, claims are presented to U.S. Customs in a manner that allows for a smooth and expeditious return of duties for our clients. Further, we work on a contingency basis and collect no fee until our client has received their refund.

DESIGNED TO MEET YOUR EXPECTATIONS

Every drawback program starts with a kick-off meeting involving all of the critical participants. By communicating the precise process and the documentation requirements in advance, we can collaborate more effectively with everyone involved and streamline the process. Whether you are a large corporation with many departments or a small, owner operated enterprise, we structure our services to meet your organization’s needs.

We can file for duty drawback going back three years on your exports after establishing a solid audit trail from which to follow your business process. We continue to employ extensive quality audit checks to make sure that the data that comes to us is correct. The process can take several months, but if handled properly, it can pay big dividends. Why not start a program with us today?

Trading with Korea?

Mon, 30 Nov 2015 19:14:00 GMT

Determine if you qualify for Free Trade benefits:

More and more importers and exporters are taking advantage of free trade agreements. There are currently 14 active free trade agreements with the United States involving 20 different countries. The Korea-United States Free Trade Agreement (KORUS), provides free trade between the United States and Korea for qualifying goods. If you are importing from or exporting to Korea, are you taking advantage of KORUS? If not, why? If so, there are some guidelines that you should be sure you are aware of and to which you should be adhering.

Simply participating in trade with Korea does not qualify you for free entry. In order to qualify for the benefits offered, an importer and/or exporter needs to consider the rules of origin of the article. An article can qualify one of two ways:

Is that item wholly obtained or produced in Korea or the U.S? Is it a natural resource of the country (i.e. an agricultural product or mineral) or 100% made up of those articles? If so, it does in fact qualify for duty free trade between the two participating countries.
Does that item meet the rules of origin based on either a “tariff shift” or “regional value content” assessment? These are dictated by the Harmonized Tariff Schedule of the US and must be reviewed individually by item according to their tariff classification. Again, if your product adheres to the rules set forth in the origin determination, you may participate in the free trade benefit.

Once you have determined that your merchandise qualifies for free trade with Korea (or any other country for that matter), it is the responsibility of the importer/exporter to create and maintain documented proof. In order to conduct the proper analysis and create the necessary supporting data or documentation, it is imperative that the importer/exporter have not only a reasonable knowledge of the merchandise, but also of KORUS.

Creating and maintaining the necessary back up information is cumbersome and tedious, but absolutely necessary. United States Customs as well as Korean Customs can come back at any time and request your documented proof of qualification of and compliance with KORUS. Are you prepared to provide this information to Customs upon request?

Upon its inception in March of 2012, KORUS has allowed 80% of US goods going into Korea, and vice versa, to be done so without a duty burden. While that percentage has grown, the number of importers/exporters taking advantage has grown as well. Are you one of them? If you feel that you may benefit from this free trade situation and are not sure of where to get started, contact ITM today. We work with many companies setting up and maintaining various free trade programs with a number of different countries and commodities. We can help you too!

DOWNLOAD OUR GUIDE TO FREE TRADE BELOW:

Gold Jewelry: A Duty Drawback Opportunity

Wed, 04 Nov 2015 22:16:00 GMT

Under GSP, you may be eligible for duty drawback on exports

The Generalized System of Preferences (GSP) is a provision detailed in the Harmonized Tariff Schedule that allows for duty free entry of a limited list of items from specific countries. This free trade situation is set up to encourage businesses and consumers to support the included countries by purchasing their products. As part of GSP, gold jewelry coming into the United States from India was subject to this duty exemption for many years.

In 2010, President Obama decided that gold jewelry coming in from India would no longer be eligible for duty-free treatment. Therefore, importers who were privy to duty free entry for many years were now paying a substantial duty upon import of, in some cases, expensive jewelry items.

While this was a new financial burden, many importers of jewelry found that they could now take advantage of duty drawback when shipping these items back out of the country. So, while they now need to pay an import duty, the door opens up for a duty drawback opportunity that did not exist before. We have acquired many new clients in the last several years who have taken advantage of this new opportunity and initiated a duty drawback program.

If you are an importer who was once privy to duty free entry under GSP and your internationally sourced product is now imposed with an import duty, you may be able to claim duty drawback on these items once you ship them out of the United States.
Contact ITM to determine if duty drawback is an option for your company.

Free Trade Agreements Help Lower Your Cost of Trade

Mon, 26 Oct 2015 13:16:00 GMT

Learn about the 13 other Free Trade Agreements that you may not know about.

While most importers are familiar with the North American Free Trade Agreement (NAFTA), the United States participates in 13 other trade agreements with other countries around the world. Some of these agreements were established as far back as 1985 and others that are only 3 years in existence.

These free trade agreements provide opportunities for importers to reduce their duty burden on items sourced from the participating countries.

The 13 additional free trade agreements (FTA’s) include:

1. Australia Free Trade Agreement (AUFTA)

2. Bahrain Free Trade Agreement (BFTA)

3. Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)

4. Chile Free Trade Agreement (CFTA)

5. Colombia Trade Promotion Agreement (CTPA)

6. Israel Free Trade Agreement (ILFTA)

7. Jordan Free Trade Agreement (JFTA)

8. Korea Free Trade Agreement (UKFTA)

9. Morocco Free Trade Agreement (MFTA)

10. Oman Free Trade Agreement (OFTA)

11. Panama Trade Promotion Agreement (PATPA)

12. Peru Trade Promotion Agreement (PETPA)

13. Singapore Free Trade Agreement (SFTA)

Each FTA involves different criteria for qualification as well as includes various rules for different kinds and quantity of commodity.

We have extensive experience working with and providing support to our clients who participate in many of the FTA’s listed above. Contact us today if you think your company may benefit from one of the free tradeagreements listed above.

HTSUS Classification

Mon, 19 Oct 2015 21:29:00 GMT

Is your merchandise classified properly?

One of the key elements in determining if your products qualify under a free trade agreement involves classification under the Harmonized Tariff Schedule of the United States (HTSUS). Knowledge of classification techniques can afford significant savings under NAFTA, other free trade agreements and eventually the Trans-Pacific Free Trade Agreement when it is finalized. Classification of imported merchandise requires knowledge of the product, expertise in analyzing the HTSUS and a review of U.S. Customs and Border Protection rulings that can affect the merchandise in question. Proper classification is required to be compliant not only with free trade agreements but also with the importation of merchandise.

With respect of the classification of imported merchandise, you should be asking yourself the following questions:

Who classifies my merchandise and do they have the necessary technical knowledge?
When has my merchandise been classified last? Should it be updated?
Am I confident that my classifications are correct?
What penalties, if any, exist for improper classification?
Am I paying too much or too little duty on my imported merchandise?

It has been estimated that about 94% of imported merchandise is classified properly. Of the amount misclassified, ½ is classified where the importer is paying too much duty and the other ½ is classified where the importer is paying too little duty. In either case the importer is non-compliant. ITM offers a contingency-based analysis of your imports to determine if you are compliant. This allows you to recoup overpaid duties and to make adjustments on underpaid duties.

Claiming Duty Drawback on Destroyed Merchandise

Fri, 11 Sep 2015 03:54:00 GMT

Are you an importer who has rejected or expired product that you destroy? Did you know that you can claim duty drawback on that product upon it’s destruction with the appropriate supporting documentation?

More importers are claiming duty drawback on products that are exported out of the United States, but an area of drawback that is still relatively under tapped, is destruction drawback. If you import a product into the United States, pay a duty on that product and then destroy it, you can claim drawback upon the destruction.

If your destroyed merchandise is imported, either by you directly or your domestic vendor, you may likely be entitled to claim duty drawback and recover the duties paid on the import when you complete the destruction.

U.S. Customs and Border Protection states the following:

“A drawback entry and all documents necessary to complete a claim generally must be filed within three years after exportation or destruction of the articles. To avoid being time-barred by the statute of limitations, a manufacturing claim may be filed before a manufacturing drawback ruling is effective; however, no payments will be made until the manufacturing drawback ruling is approved. Approval of a letter of intent to operate under a general manufacturing ruling may be obtained promptly if the letter of intent complies with the drawback law and regulations.”

As a licensed Customs broker, we help companies from a vast variety of industry take advantage of this opportunity. We work very closely with U.S. Customs and have specialized in obtaining and providing the necessary proof of destruction required to have these claims approved and paid.

Free Trade Is Not Free

Tue, 25 Aug 2015 20:11:00 GMT

Special Expertise Is Required

Talk about the Trans-Pacific Free Trade Agreement has dominated the news lately. This may or may not be passed, but what about all of the other free trade agreements that have been implemented. Is your company taking full advantage of their benefits? The United States has negotiated 14 agreements including NAFTA, DR-CAFTA, Australia, Korea, and Singapore to name a few. These existing agreements can afford your company significant duty savings if you export to them.

But, as we all know, free trade is not free. To take advantage of these programs you must understand them and adhere to the regulations that control them. All of the agreements require that a certain percentage of goods are produced in the countries involved or that the foreign ingredients (ingredients from outside the free trade countries) used to manufacture the items go through a tariff shift. This tariff shift analysis requires a detailed knowledge of the Harmonized Tariff Schedule and the specific rules of origin for each manufactured article. This knowledge usually does not reside in small to medium size companies and outside expertise is usually required. Even many large companies do not devote the manpower to do this analysis.

We have worked with many companies to do the analysis and provide back-up documentation to support the duty free (or reduced duty) claims. This back-up documentation is required, not only to assure that you are compliant but to be presented when an audit is initiated by the customs agency of the country to which the goods are shipped to. One company we are working with, is savings over $50,000 per month in reduced duties and another is savings about $15,000 monthly and are fully compliant with the regulations.

Many companies, which we hope yours is not one of them, claim free trade benefits without doing the analysis or having the back up documentation. This can lead to severe penalties from the importing country. If you think your claims cannot be substantiated or you feel that you might be able to benefit from one of the free trade agreements, please let us know. We will provide a free (and it is really free) analysis of your situation.

Tariff & Customs Regulations Specialists

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