Import Tariffs and Duties

Are you familiar with how tariffs work? Financial and economic literacy should not be optional. When individuals are uninformed or misled, the outcome is disastrous. Let's review how tariffs work economically. A tariff is a tax imposed by a government on imported goods and services. Tariffs are used to regulate trade, protect domestic industries, and generate government revenue. Here's a breakdown. 👉🏾 Types of Tariffs 1. Ad Valorem Tariffs – A percentage of the value of the imported good (e.g., 10% of the price). 2. Specific Tariffs – A fixed amount per unit of the imported good (e.g., $5 per ton of steel). 3. Compound Tariffs – A combination of both ad valorem and specific tariffs. 👉🏾 Economic Effects of Tariffs A. Higher Prices for Consumers Tariffs increase the cost of imported goods, making them more expensive for consumers. Domestic producers may also raise their prices since foreign competition is now more costly. B. Protection for Domestic Industries Tariffs make foreign products less competitive, encouraging consumers to buy from domestic businesses. This can protect local jobs and help specific industries grow. C. Retaliation and Trade Wars Other countries may respond by imposing their own tariffs, leading to trade wars. This can hurt exporters who rely on foreign markets, leading to job losses in export-dependent industries. D. Government Revenue The government collects money from tariffs, which can be used for public services. However, if trade slows down due to high tariffs, the expected revenue may decline. E. Supply Chain Disruptions Many modern industries rely on global supply chains. Higher tariffs can make imported materials more expensive, raising costs for domestic manufacturers. 👉🏾 Example of Tariffs in Action If the U.S. imposes a 25% tariff on imported steel: Foreign steel becomes 25% more expensive. U.S. steel producers gain an advantage as domestic buyers look for cheaper options. However, U.S. car manufacturers (who need steel) face higher costs, which they might pass on to consumers. 👉🏾 Tariffs in Today's Climate U.S.-China Trade Tensions – Both countries have imposed tariffs on each other's goods, affecting technology, agriculture, and manufacturing industries. Inflation Concerns – Higher tariffs can contribute to inflation by increasing the cost of imported goods. Geopolitical Issues – Countries use tariffs as a tool for economic and political leverage. Manufacturing Reshoring – Tariffs can encourage companies to move production back home but at higher domestic production expenses. 👉🏾 Key Take Away While tariffs can protect domestic industries and generate revenue, they also raise prices, disrupt global trade, and trigger retaliatory measures. The economic impact depends on how they are implemented and whether trading partners respond in kind. #KnowledgeIsNotOptional #GoodandBadTariffs

A pharma client was shocked by the duty due on a shipment that arrived yesterday. Duties of this magnitude were not due on previous shipments. It should not have been a surprise since the new reciprocal tariffs were announced last week. Even though the administration paused the tariffs for 90 days, a baseline of 10% on top of the normal duty rate is still in effect for most countries. What can pharma companies do to mitigate the impact? Check tariff classifications  🔹 Many pharma products are exempt from the reciprocal tariffs. 🔹 Check the HTS code exemption list (Annex II of the April 2nd EO). 🔹 Ensure products are appropriately classified in an exempt HTS. Use FTAs where possible 🔹 Check whether the product qualifies for an FTA. 🔹 FTAs can eliminate normal duty rate at least. Review supplier documentation in advance 🔹 Ensure the right HTS code is on the commercial invoice. 🔹 Don’t rely on the supplier to classify. 🔹 Tell suppliers the right HTS code to use. Use the prototype provision where possible 🔹 Qualifying prototypes in Chapter 98 still appear to be duty free. 🔹 Be sure you have good supporting documentation. Here are a few other things to consider in this new high-tariff environment. Increased enforcement ✔️ The government has stated it will use the False Claims Act to enforce trade issues. ✔️ Compliance is more important now than ever Review your current customs bond ✔️ Increased duties may mean importers need to increase bond amounts. Customs broker duty outlays ✔️ Some customs brokers may no longer be willing to outlay duties in advance. ✔️ Consider establishing an ACH account to pay duties directly to the government. What other ways are you mitigating the impact of the new tariffs? _____________________________ I am Elizabeth Lomax, import/export compliance expert helping pharma and biotech companies create more efficient international supply chains. DM me or visit my LinkedIn profile to learn more. To stay updated, click the notification bell on my profile. 🔔

Contrary to what is sometimes claimed, tariffs are taxes paid by importers — not foreign governments or exporters. Here’s how it works: -When a tariff is placed on goods from another country, the U.S. importer pays that tariff when the goods arrive at the border (some process exceptions here). -That cost becomes part of the total landed cost of the product, which can then be: -Absorbed by the importer (reducing their profit), -Passed on to consumers in the form of higher prices, or -Shared with the exporter through renegotiated pricing, though this is less common. Example: If the U.S. places a 15% tariff on goods from Japan: -A U.S. company buying $1,000 worth of widgets from Japan, must pay $150 in tariffs, totaling $1,150. -That $150 in tariffs is paid by the U.S. company buying the widgets. -That $150 goes to the U.S. government, not to Japan. Bottom Line: Tariffs are taxes on imports, and American companies and consumers bear the cost. While tariffs may be intended to pressure foreign governments or protect domestic industries, the immediate financial impact falls on domestic businesses and ultimately consumers.   #imports #tariffs #supplychainmanagement #globaltrade

Is Cambodia really taxing U.S. goods at 97%? Let’s talk facts, not fear. This image recently surfaced on U.S. television, showing a chart shared by the Trump administration suggesting Cambodia charges 97% tariffs on American imports. At first glance, it’s shocking. But dig deeper, and it becomes clear: the number is misleading and politically charged, not based on any official tariff schedule or WTO-backed data. As someone who imports and operates in Cambodia daily, here’s how tariffs really work for U.S. goods entering the Kingdom: ⸻ How Cambodia Applies Tariffs to U.S. Goods Cambodia is a WTO member and applies the Most Favored Nation (MFN) tariff schedule to countries like the United States, which has no free trade agreement with Cambodia. 1. Import Duty • MFN tariff rates range from 0% to 35%, depending on the product category. • For example: • Mobile phones: 0% • Wines: 35% • Processed foods: 15–35% 2. Value Added Tax (VAT) • A flat 10% VAT is applied to most imports. 3. Special Tax (Excise) • Applies only to specific goods, such as: • Alcohol (10–35%) • Vehicles (10–45%, depending on engine size) • Tobacco (up to 20%) 4. Public Lighting Tax (PLT) • 3%, but only on certain luxury goods. ⸻ Real Example: Importing a Bottle of U.S. Wine HS Code: 2204 • Import Duty: 35% • Special Tax: 35% • VAT: 10% Total tax burden? About 100% — but only on this specific item. Now, consider importing a laptop from the U.S. — • Import Duty: 0% • VAT: 10% • No special taxes. Total tax burden? Just 10%. This is how tariffs are applied: product-by-product, by HS Code, not by country-wide blanket percentages. ⸻ So, where did the 97% number come from? It’s unclear. It doesn’t match Cambodia’s Customs Tariff Book, nor data from the WTO, ASEAN Trade Repository, or Cambodia’s General Department of Customs and Excise. Most likely, it’s a political construct, lumping together: • Import duties • VAT • Special taxes (only for a few goods) • Regulatory “frictions” • Possibly, perceived “trade barriers” But treating it as an across-the-board tariff is disinformation. ⸻ Why It Matters These kinds of graphics may be catchy — but they oversimplify and distort the reality of international trade. We owe it to business leaders, investors, and policy makers to rely on accurate, verifiable data — not scare tactics. Cambodia is not a high-tariff wall against the U.S. In fact, the Kingdom imports millions in U.S. goods every year — and the tariffs applied are fully in line with WTO standards. ⸻ Let’s build smarter trade, not louder headlines. #Cambodia #TradePolicy #Tariffs #USCambodia #WTO #Customs #FactCheck #BusinessInsights

✳️ New Developments on Section 232 Duties 📅 Effective June 4, 2025, there's a major shift in how Section 232 tariffs are applied to steel and aluminum products. 🔍 Previously: Importers had to pay duties based on the full value of the article under Chapter 73 (Steel) and Chapter 76 (Aluminum) — even if only a portion was actual steel or aluminum content. Only certain derivative products outside these chapters qualified for content-based assessment (as of March 12, 2025). ✅ Now: Section 232 duties will be calculated only on the value of the steel or aluminum content — even for items directly classified under Chapter 73 and Chapter 76! This applies to: All steel and steel derivative articles under Chapter 73 [📄 CSMS #65236645], and All aluminum and aluminum derivative articles under Chapter 76 [📄 CSMS #65236374] if they're subject to Section 232 under any Chapter 99 HTSUS heading. 📉 Why this matters: This update could lower duty liabilities and change how you manage valuation strategies across your import portfolio. 🛠️ Smart compliance today can mean significant cost savings tomorrow. #TradeCompliance #Section232 #HTSUS #Steel #Aluminum #Tariffs #CustomsUpdate #ImportStrategy #DutySavings #Deleontrade

Here's my updated Trump tariff tracker, based on the most recent announcement from the President. On April 5, the U.S. will impose 10% across-the-board "baseline tariffs" on imports from all countries. Then, on April 9, the U.S. will implement additional "reciprocal" tariffs on imports from about 60 countries, with the U.S. trade deficit used as a proxy for the trade disparity with each country. Canada and Mexico are not included in the new announcement, but are already subjected to tariffs announced earlier. The previously-announced 25% tariffs on automobiles is now in effect, with a 25% tariff on auto parts set to take effect on May 3. We're still waiting on more information on previously-announced tariffs on semiconductors, pharmaceuticals, copper, lumber, agriculture, countries who buy Venezuelan oil or Russian oil. Some of these are negotiation items (Venezuelan and Russian oil), while others are going through an official study and implementation process (pharmaceuticals, copper, lumber). The next shoe to drop is to see how other countries respond to the new U.S. tariffs. #economy #trade #tariffs #reciprocal

Easiest way to save money instantly with the new tariffs? If you’re ordering from China using FOB terms, you’re probably overpaying duties without even realizing it. Here’s the simple switch that could save you thousands on your next shipment 👇 Say you place a $100,000 order. Under FOB terms, your supplier usually includes domestic freight and export paperwork in your unit cost. That all shows up on your customs invoice — which is exactly what the U.S. calculates your duties on. So instead of taxing $97,000 worth of goods, if that cost is $3,000 you’re getting taxed on $100,000. With new 100% tariffs hitting a ton of product categories, here’s the difference: • FOB: 100% of $100K = $100K in duties • EXW: 100% of $97K = $97K in duties 💸 That’s a $3,000 savings — instantly. No supplier change. No product change. Just smarter terms. Here’s all you have to say: “Can you quote me EXW instead of FOB? I’ll have my forwarder pick up the shipment instead" Your freight forwarder handles pickup, paperwork, and shipping — like they already do. Now you just avoid inflating your customs invoice. This is one of the easiest ways to protect your margins right now. If you’re importing from China and haven’t looked at this, you’re leaving money on the table. Also make sure to attend my webinar where I go through all of this later today! https://lnkd.in/esCUhYFa I’m Isaac Hetzroni (@TheSourcingGuy). I help brands and businesses source smarter, reduce costs, and avoid sourcing mistakes. 💬 Drop a comment or shoot me a message if you want a second look at your current setup. #Tariffs #EXW #FOB #SupplyChain #ProductSourcing #ChinaImports #TheSourcingGuy #ManufacturingTips #GlobalTrade

🎓 From MBA Classrooms to Startup Reality: What Tariffs Just reminded Me About Econ 101 — The Hard Way Building a business, we’re almost always in survival mode. We're in the trenches — raising capital, managing cash flow, shipping product, keeping your team motivated. You're not thinking about macroeconomic policy on a Tuesday morning. You're thinking: Did the product ship on time and bug free? How are customers engaging? Did we hit revenue targets? Is payroll safe? Did that shipment clear customs? But this week... tariffs brought me straight back to the classes of undergrad and MBA economics. 📉 The new tariff directive dropped like a policy nuke: 10% tax on all imports 34% on China, 32% on Taiwan, 20% on the EU A whopping 25% on all foreign cars I didn't need a professor to tell me what this meant. I could see it plain as day: This is a tax — with patriotic packaging. 💡 Let’s break it down, economics-style: Tariffs increase input costs Businesses don’t absorb that cost (small businesses can't) — they pass it downstream to the customer The end result? 🔹 Higher consumer prices 🔹 Smaller margins 🔹 Less room for bonuses, hiring, or reinvestment Basic economic theory 👩🏽💼 Melissa Butler, founder of The Lip Bar Inc. Bar, nailed it in one sentence: “We can’t just eat a 32% tariff. That’s our margin — our ability to pay people, invest in marketing, grow.” Her products are mostly made in Taiwan. Tariffs just turned profitability into uncertainty. She spoke for thousands of founders who are too busy surviving to post on Instagram about economic policy. And that’s the hidden cost no one's talking about. Yes — it affects the price of your next car or phone. But it kills momentum for the exact people America says it wants to empower: 🚀 First-generation founders 🛍️ Minority-owned businesses 💼 Cash-conscious startups 👷🏾♂️ The working-class entrepreneur with a Shopify account and a dream 🎓 In class, we debated this stuff with graphs and theory. In the real world, it shows up as: “Can I still afford my supplier?” “Should I raise prices and risk losing customers?” “Do I delay that hire?” “Will I make payroll in Q2?” That’s not Econ 101. That’s Startup 911. 🧠 As founders, we’re taught to pivot, adapt, optimize. But there’s only so much optimization you can do when you’re absorbing a 32% tax hike overnight — with no heads up, no subsidy, and no lobbyist to fight for you. So: 📉 Tariffs might work on paper — but on pavement, they punish the wrong people. 📈 Economic independence shouldn’t come at the expense of economic equity. 🗣️ And if we really want innovation to thrive, we need to stop making it harder for the builders to build. Building a wall around the economy doesn’t protect us — it holds us back. It raises costs and shuts out the very people we claim to champion. Gillian Marcelle, PhD Samantha Katz Mike Green Shari Dunn L C D D https://lnkd.in/eW8qh4uF

Importing in 2025 feels like playing poker with the government—except the deck is rigged, the dealer keeps changing the rules and you’re always picking up the tab. One day, your cost projections look solid. The next, a new tariff, an adjusted duty rate or some obscure regulation that just made your margins evaporate faster than a politician’s promise. So how do the smart importers avoid getting fleeced? Step 1: Stop Playing Blindfolded Most importers just accept the costs thrown at them. Big mistake. Tariffs, duty rates and customs fees aren’t fixed—they’re a puzzle. 💵HS code classification: Get it wrong, and you might be paying 25% when you could be paying 5%. 💵Country of origin strategy: Some goods qualify for preferential treatment, but only if you know how to work the system. 💵Bonded warehouses & FTZs: Stash your goods in the right spot, and you can defer or even dodge tariffs legally. Step 2: Make Customs Like You You know who doesn’t get their shipments stuck in a bureaucratic black hole? Importers who play by the rules—and play them well. 💵C-TPAT certification: Welcome to the VIP lane. Faster processing, fewer inspections and lower risk of costly holds. 💵Proper documentation: A missing form can mean days of delay and extra fees. Nail your paperwork, or enjoy paying storage costs while customs takes their sweet time. Step 3: Pass the Costs or Get Creative You’ve got two choices: 💵Pass the tariff cost to customers (they’ll love that, right?) 💵Structure your imports smarter so you’re not bleeding money unnecessarily. The best companies are renegotiating supplier terms, restructuring shipments and even tweaking product designs to shift classifications. Tariffs aren’t just a “cost of doing business.” They’re a game—one where the losers pay full price and the winners find every legal way around it. Are you playing to win? Custom Goods ✅ #Tariffs #SupplyChain #CargoMargo