Global Supply Chains and Trade Tariffs
Are you concerned about the recent changes in global tariffs?
Many Detroit area businesses have been impacted by changes in trade tariffs. Recently the Detroit News shared how increases in tariffs on foreign steel and aluminum have created an uncertain trade environment for small manufacturers in Michigan, who are concerned about the impact on their bottom lines.
Last week, the Trump administration confirmed tariffs on $7.5 billion of EU goods went into effect Friday. Items subject to duties include aircraft parts, luxury apparel, cheese, seafood and steel, among others. The bulk of the tariffs will be levied on imports from France, Germany, Spain and the United Kingdom and overall could impact global supply chain costs.
At APICS Greater Detroit, we support local Supply Chain professionals and companies with information and training to assist during times of uncertainty. Read below for some tips from Global Trade Magazine on ways to prepare your business for tariff changes.
- Do you have a plan to cover the costs? You may not be able to avoid paying the tariffs, but there are various strategies you may consider to help cover their costs including increasing your prices or working with your suppliers to cover at least a portion of the tariff.
- Will you need to increase your customs bond? The smallest customs bond an importer can hold is $50,000. That used to be enough for many importers to cover generally 10% of the duties and taxes you expect to pay CBP. Unfortunately, as many importers from China are learning, a 25% tariff on products can quickly exceed your bond amount. And bond insufficiency can shut down all your imports while resulting in delays and added expenses. To help avoid bond insufficiency, consider any increased duty amounts in advance of your next bond renewal period. And don’t wait to do this until the last minute, because raising your customs bond with your surety company can take up to four weeks.
- Do you re-export goods brought into the U.S.? Duty drawback programs can’t be used by every importer. But if you can take advantage of them, they can result in big savings for your company. In fact, you can get back 99% of certain import duties, taxes, and fees on imported goods that you re-export out of the U.S. Just be aware that you still need to pay the duties up front. And you might need to wait up to two years to get your refund.
- Are your product classifications current and accurate? With potential tariffs looming, consider reviewing your product classifications and make sure they’re accurate. If you find an issue, discuss it with your broker or customs counsel to discuss how you can properly rectify the issue, and avoid penalties from doing it incorrectly. And while we’re on the topic of product classifications, never change them to evade tariffs. CBP will be on the lookout for this kind of activity, and the penalties for noncompliance can be steep.
- Do you have the support you need? Consider changing your customs brokers to ensure they provide all the services you need to stay compliant. Your provider should help make sure you pay the appropriate duty rates for your products. And they should have people and services available globally to support your freight wherever it is located throughout the world.
For more information on how APICS Greater Detroit can help you and your organization deal with today’s top challenges, check out our website at https://www.apicsdet.org/home or send us an email at Classes@apicsdet.org.
Looking to advance your career, earn more, and help your company grow?
- CLTD (Certified Logistics, Transportation and Distribution) starting on January 11th. CLTD helps participants demonstrate in-depth knowledge of a broad range of supply chain logistics topics, setting them apart from peers. Elevate awareness, professionalism, and knowledge/skills of Logistics, Transportation & Distribution practitioners with a CLTD certification.
- CSCP (Certified Supply Chain Professional) – starting on January 22nd. CSCP is the most sought-after certification by supply chain professionals around the globe seeking to achieve mastery and recognition in their field.
- CPIM (Certified in Production and Inventory Management) – starting on January 18th. The perfect certification for production and inventory management personnel. CPIM provides you with the ability to understand and evaluate production and inventory activities within a company’s global operations.
APICS Greater Detroit chapter members receive discounts on all certification classes – click here to join today. We look forward to helping you in your career!