Trade War with China: An Importer’s Survival Guide

by | Jul 25, 2018 | Compliance, Freight Forwarder

US Customs

Unfortunately for many businesses in the USA, America finds itself in the position of fighting a “four front” trade war against Canada, Mexico, the entire European Union and, most significantly of all, China. That single country is the source of many goods, materials, and components in today’s global economy. 

For any business that imports from China, this may have direct and severe economic repercussions. Politics and patriotism aside, the cold, hard business facts speak for themselves: American business interests are often critically intertwined with those of Chinese manufacturing, production and ultimately logistics. A trade war means both countries will be adversely affected. 

So how will this affect your business’ workflow and bottom line? 

Where Is the Trade War with China Going? 

The world of shipping, importing, permits, licenses and logistics are already complicated. Unless you are a part of this industry, you should always leave these matters to an experienced international freight forwarder and professionals with customs brokerage expertise. 

Sadly, a trade war, placing tariffs on specific goods, while giving the “green light” to others, means that the complexity of logistics and importing just jumped to another order of magnitude. However, with extremely costly results. The US is already looking at 79 billion USD in tariffs on Chinese goods, the most recently affected tariff increases took place on July 6th. 

However, it doesn’t end there; the US is now drawing up a potential list of an additional 400 billion USD against China, and an extra 350 billion USD against the European Union. In total, if these new amendments go into effect, 11 trillion USD worth of the country’s 18.5 trillion USD economy could be affected.  

Get The Facts about Emerging Trade Issues 

A trade war is ongoing and will be prone to changes, additions, retaliation, and consequences. It is going to be very difficult “on the outside” to keep track of direct consequences that may impact you or your business. If you want to navigate this time of uncertainty, talk to an experienced international freight forwarder or customs broker that is “right in the thick of things.” If you find that your goods are affected by increasing tariffs, it’s important to consult with an expert and review your classifications.  An experienced customs broker will be able to explore valid tariff mitigation strategies.  This would include reviewing “tariff engineering” opportunities as well as assembling/disassembling products with Customs regulations in mind. 

Another tactic that an experienced international freight forwarder may be able to offer is merely changing the source of goods. Nations such as Taiwan, Hong Kong, Malaysia, Thailand, and Singapore, for example, are currently not a part of this trade war and are thus subject to standard duty rates. 

Fight Smarter: How to Work Around Customs Obstacles 

Trade wars are not as good or easy to win for every American business. Without taking the appropriate steps, and consulting with the experts, a trade war can quickly spiral business expenses out of control. Don’t let this happen to you. Talk to informed, experienced customs brokers and international freight forwarders that are up to date on the latest trade developments, and be ready to take the necessary actions to compensate for them. 

Further Reading – HTS Lists of Implemented and Proposed Tariff Increases