Tariff Resource Guide
Tariffs on imported goods impact both importers and exporters, creating challenges in a shifting trade landscape. Businesses that plan ahead and adapt their supply chains gain a competitive edge. GO-Biz encourages California businesses to stay informed and proactively plan for tariff-related challenges. Below, you’ll find a collection of resources to help your business navigate tariffs, optimize operations, and remain competitive in the global marketplace.
Manage Product Supply Chains
Understanding product supply chains is crucial to making strategic risk management decisions. Mapping supply chains allows businesses to better understand their vulnerability to trade barriers and other potential disruptions in order to minimize the potential effects.
- Take the time to understand where your customers, sourcing, and manufacturing are before making a quick decision. Companies should have a complete understanding of their supply chain before taking action because solving one problem can create a new one. Allow time for the trade environment to stabilize before committing to a contract.
- Recognize potential vulnerabilities that could lead to disruptions. For example, businesses can shift from just-in-time to just-in-case inventory management; having more safety stock can help you prepare for potential delays. Additionally, businesses should establish backup suppliers to avoid reliance on a single source. Encourage your existing suppliers to diversify their sourcing locations.
- Source from countries with lower tariff rates or free trade agreements (FTAs) with the U.S. Businesses can use the Rules of Origin Facilitator tool to find out what import duties in foreign markets are applicable to specific products and identify available duty savings, detailed rules of origin, and certification procedures.
- Enhance supply chain security with Customs Trade Partnership Against Terrorism Certification (CTPAT). The CTPAT program helps businesses improve supply chain security and gain operational benefits, including:
- Fewer Customs and Border Patrol inspections and faster customs clearance.
- Priority processing and shorter wait times at border crossings.
- Access to dedicated Supply Chain Security Specialists.
- Train employees in supply chain management. The Employment Training Panel (ETP) provides funding for companies to train employees. Businesses determine their own training needs and receive assistance in applying for funds.
Reduce Your Exposure to Tariffs
To reduce their exposure to tariffs, businesses can employ strategies such as tariff engineering, duty drawback programs, and foreign trade zones to reduce costs while remaining compliant with Customs regulations.
- Work with a permitted customs broker. Customs brokers assist importers in meeting federal requirements governing imports into the U.S. They oversee transactions related to customs entry and admissibility of merchandise, product classification, customs valuation, payment of duties, taxes, or other charges such as refunds, rebates, and duty drawbacks.
- Employ tariff engineering. Businesses can legally modify product materials or classifications to qualify for lower duty rates. For example, if cotton products have lower tariffs than nylon, consider switching materials.
- Leverage Foreign Trade Zones (FTZ). FTZs are geographic sites in the United States that are outside of US Customs territory. In these zones, goods can be held or manufactured and are not subject to duties until they leave the site and enter customs territory. There are 18 FTZs in California.
- Use Customs bonded warehouses to delay or avoid duties. Bonded warehouses allow businesses to store imported goods duty-free until they are sold or exported.
- Claim refunds on paid tariffs with duty drawbacks. Duty drawback programs enable businesses to recover up to 99% of duties paid on imported goods that are later exported.
- Import goods with Temporary Importation Bonds (TIBs). TIBs allow businesses to bring goods into the US without paying duties, as long as they are reexported within a specific timeframe.
- Apply for an ATA Carnet. The ATA Carnet is an international customs document that allows for temporary entry of goods on a duty-free and tax-free basis. This can be a tool for companies wanting to show their products in foreign markets or for professionals bringing products into a foreign country for a limited period of time.
- Understand your Incoterms. Incoterms are a set of internationally recognized rules that define the responsibilities of sellers and buyers by specifying who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities. Companies can renegotiate Incoterms with their buyers or suppliers to shift who pays certain costs.
- See if your goods qualify for Chapter 98 Special provisions under Chapter 98 may enable importers to partially or fully avoid duties. For example, products exported from and returned to the U.S. are exempt from tariffs, regardless of their country of origin. Note that requesting a Chapter 98 exemption may bring more scrutiny of your goods from Customs.
Stay Informed on Changes to Trade Policy
Trade policy can shift rapidly, which is why tracking updates is crucial to avoiding and planning for potential disruptions.
- Check GO-Biz’s Export Training webpage for new webinars and trainings. Our events calendar is frequently updated with new events hosted by industry experts.
- Connect with relevant industry associations and chambers of commerce to uplift your concerns. These organizations act as a collective voice for their members by advocating for policies, regulations, and industry interests when they meet with local, state, and federal leaders. Furthermore, they can provide resources that are tailored to your specific industry.
- Refer to the following resources for the latest news on tariffs and other trade issues:
