Livingston International https://www.livingstonintl.com/ Simplify Trade Thu, 01 May 2025 17:37:50 +0000 en-US hourly 1 New duty offsets available for auto parts https://www.livingstonintl.com/new-duty-offsets-available-for-auto-parts/ Thu, 01 May 2025 17:34:57 +0000 https://www.livingstonintl.com/?p=62322 On April 29, 2025, the U.S. government announced an amendment to its tariff policy on automobiles and automobile parts that will allow automakers to apply for an offset to Section 232 duties paid on imported automobile parts. While tariffs on automobiles and auto parts remain in place, the amendment provides duty relief for automobile parts... Read more »

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On April 29, 2025, the U.S. government announced an amendment to its tariff policy on automobiles and automobile parts that will allow automakers to apply for an offset to Section 232 duties paid on imported automobile parts.

While tariffs on automobiles and auto parts remain in place, the amendment provides duty relief for automobile parts incorporated into automobiles assembled in the United States. Dubbed the Import Adjustment Offset or IAO, this newly introduced form of duty relief is regressive and implemented in two periods, sequentially.

In addition to this amendment, a separate amendment was issued regarding tariff stacking. Tariff stacking is when one tariff is applied in addition to (not in place of) another tariff. In the case of auto tariffs, the tariffs were stacked onto other tariffs, such as tariffs on steel and aluminum and tariffs on goods imported from Canada and Mexico (both at a rate of 25%). The amendment places limits on stacking, potentially providing relief to importers of automobiles and auto parts from the additional tariffs levied by certain IEEPA and Section 232 actions.

IMPORTANT: The IAO and the stacking amendments have been issued through presidential proclamation and executive order, respectively. Functional guidance has not yet been provided by customs authorities. As such, both amendments and the rules governing them are subject to potential cancellation or change without notice.

IAO eligibility

Eligibility for IAO is based on specific criteria and equally specific schedule.

Automobiles must have final assembly performed in the United States to take advantage of the duty relief. Furthermore, the IAO can only be claimed by Importers of Record (IOR) authorized by the manufacturer to reduce duty outlay related to that manufacturer’s imports under Proclamation 10908, including suppliers in the manufacturer’s supply chain for those automobiles which undergo final assembly in the United States.

The IAO is available for automobiles assembled in the United States based on the following schedule:

Date: Year 1 (April 3, 2025 – April 30, 2026.
Eligible value: 15% of the MSRP of each U.S.-assembled auto.
Offset: 3.75% of the aggregate MSRP of all U.S.-assembled autos.
Calculation: 25% tariff on 15% of MSRP

Date: Year 2 (May 1, 2026 – April 30, 2027)
Eligible value: 10% of the MSRP of each U.S. assembled auto.
Offset: 10% of the aggregate MSRP of all U.S.-assembled autos.
Calculation: 25% tariff on 10% of MSRP.

IAO Cap

The offset is capped at the actual automobile parts tariff liability for that Manufacturer under Proclamation 10908. Unused offsets due to overestimated production cannot be transferred or repurposed.

Applying for IAO

We strongly advise auto manufacturers to begin the application process as soon as possible. To do so, you must ensure your assembly projections for the time periods noted above are as accurate as possible.

You should engage with your internal procurement, finance, logistics and compliance teams to compile all the necessary documentation and await for further guidance from the U.S. Department of Commerce, which will outline the specifics of the application process no later than May 28, 2025.

In addition to the projected volume of U.S.-assembled vehicles, manufacturers will need to provide:
• Plant locations where final assembly occurs.
• Projected tariff costs, both direct and via suppliers.
• Requested offset amount and breakdown by IOR (including IOR numbers).

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Drastic changes in the U.S.-EU trade situation https://www.livingstonintl.com/drastic-changes-in-the-u-s-eu-trade-situation/ Tue, 29 Apr 2025 20:49:37 +0000 https://www.livingstonintl.com/?p=62318 The landscape of U.S.-EU trade is undergoing significant shifts, with profound implications for various industries. From automotive to agriculture, this evolving dynamic is reshaping global trade strategies, forcing businesses and policymakers alike to adapt. Below, we take a closer look at what’s changing, how it’s unfolding, why it matters, and the impact across key sectors.... Read more »

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The landscape of U.S.-EU trade is undergoing significant shifts, with profound implications for various industries. From automotive to agriculture, this evolving dynamic is reshaping global trade strategies, forcing businesses and policymakers alike to adapt. Below, we take a closer look at what’s changing, how it’s unfolding, why it matters, and the impact across key sectors.

What is happening in U.S.-EU trade relations?

A combination of tariff adjustments, policy revisions, and geopolitical developments has led to drastic changes in trade between the United States and the European Union. Central to these shifts are new trade agreements, ongoing disputes, tighter regulations, and realigned priorities in key industries.

The most significant proposal involves altering tariff structures, particularly on high-value goods such as vehicles, pharmaceuticals, and luxury items. Additionally, sustainability concerns, agricultural subsidies, and supply chain disruptions—exacerbated by external factors like the pandemic—are further affecting trade flows.

How are these changes affecting industries?

The recalibration of trade between the U.S. and the EU is creating ripple effects across multiple sectors. Below are the four industries most impacted:

1. Automotive

The automotive industry is at the centre of trade talks. Tariff changes on cars and parts have raised questions about production, pricing, and market competition. U.S. manufacturers exporting vehicles face increased duties in the EU, potentially making American cars more expensive for European consumers. Meanwhile, European automakers must contend with new import hurdles in the U.S.

This new reality is driving companies on both sides to localize production or even shift operations altogether. Electromobility is another key factor, as eco-standards evolve and governments increase incentives for electric vehicles.

2. Pharmaceuticals

The pharmaceutical industry is grappling with challenges surrounding intellectual property rights, research funding, and access to critical markets. Stricter regulations on drug manufacturing and distribution are impacting the flow of goods between the two regions.

Additionally, the prioritization of public health initiatives has put certain patented drugs under scrutiny, leading to contentious trade negotiations. This shift could result in delayed market access for critical medicines and rising costs for healthcare providers.

3. Luxury Goods

Europe’s renowned luxury goods industry is facing potential setbacks with new tariffs targeting products such as designer fashion, jewelry, and wines. For European brands that rely heavily on American consumers, these barriers could limit access to one of the largest international markets.

Conversely, U.S.-based luxury goods manufacturers also face hurdles in tapping into Europe’s affluent customer base, creating an uneven playing field. Brand managers and global marketers are now tasked with developing strategies to offset these challenges, including pricing adjustments and rethinking global retail footprints.

4. Agriculture

Agriculture remains one of the most politically sensitive areas in the U.S.-EU trade relationship. The EU’s stringent standards for genetically modified organisms (GMOs) and pesticides often clash with American agricultural practices.

These differences have historically sparked lengthy trade disputes, and the current changes have reignited debates. Subsidy programs on both sides of the Atlantic further complicate matters, with both regions accused of engaging in unfair trade practices. Farmers are left in limbo as they face uncertain demand and fluctuating market access.

Why does this matter?

The shifts in U.S.-EU trade are more than a political tug-of-war; they carry tangible consequences for businesses, workers, and consumers. The potential for higher tariffs increases costs for companies, often resulting in higher prices for end customers. Furthermore, significant trade disruptions could lead to job losses in export-reliant industries and reduced economic growth for both regions.

Smaller businesses, particularly exporters without the resources to adapt quickly, may bear the brunt of these changes. Meanwhile, longstanding transatlantic partnerships are being tested as competitive pressures mount.

What’s next?

Navigating these changes will require agile strategies from both private enterprises and policymakers. Companies must reassess sourcing, production, and market-entry strategies to mitigate risks. Trade professionals should collaborate across borders to advocate for policies that balance economic growth with fair competition.

For policymakers, the focus must be on finding common ground with trade agreements that consider sustainability, economic equity, and global collaboration. Transparent, data-driven decisions will be crucial to fostering stability and confidence in these complex times.

Closing thoughts

Drastic changes in U.S.-EU trade demand proactive measures and innovative responses. From automotive production to agricultural exports, businesses and policymakers must reevaluate their strategies to remain competitive in the evolving landscape.

For businesses, staying informed and agile will be critical. Trade professionals, economists, and policymakers must work together to turn these challenges into opportunities for innovation, collaboration, and long-term growth.

Contact Us
For more information or clarity on navigating these trade changes, reach out to a Livingston trade representative today. Our experts are here to help you adapt and thrive in this shifting global trade environment.

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EU-Ukraine trade: A dynamic landscape https://www.livingstonintl.com/eu-ukraine-trade-a-dynamic-landscape/ Tue, 29 Apr 2025 17:07:38 +0000 https://www.livingstonintl.com/?p=62305 The European Union’s (EU) trade relationship with Ukraine is a complex and evolving one, significantly impacted by the ongoing conflict. While the EU consistently maintains a trade surplus with Ukraine, the specifics of this relationship are constantly shifting. What are the current trade trends? What are the key product exchanges? Are there significant challenges and... Read more »

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The European Union’s (EU) trade relationship with Ukraine is a complex and evolving one, significantly impacted by the ongoing conflict. While the EU consistently maintains a trade surplus with Ukraine, the specifics of this relationship are constantly shifting.

What are the current trade trends?

  • Recent Quarter (Q4 2024): EU exports to Ukraine surged by 9.3% compared to the previous quarter, while imports from Ukraine slightly dipped by 1.8%. This resulted in a substantial EU trade surplus of €5.8 billion. This surplus, however, is not a new phenomenon. Since early 2021, excluding the first quarter of 2022 (immediately following the Russian invasion), the EU has held a consistent trade surplus with Ukraine.
  • Year-on-Year (Q4 2024 vs. Q4 2023): EU exports to Ukraine saw a robust increase of 16.7%, while imports rose by 9.2%, indicating a strengthening of trade ties.
  • Pre-War Context: Before the Russian invasion, the EU was already Ukraine’s largest trading partner, and this remained true throughout 2023. In that year alone, total trade in goods between the EU and Ukraine exceeded €61.9 billion. This represents more than a doubling of trade since the Deep and Comprehensive Free Trade Area (DCFTA) of the EU-Ukraine Association Agreement came into effect in 2016.

What are the key product exchanges?

  • EU Exports to Ukraine: The most significant increases in the EU’s exports to Ukraine during the latter half of 2024 were explosives and arms and ammunition. Other major exports include mineral fuels and mineral oils, motor vehicles, machinery, and electrical machinery. These highlight the EU’s significant role in supporting Ukraine’s defense capabilities and post-conflict recovery.
  • EU Imports from Ukraine: Ukraine’s exports to the EU predominantly comprise agri-food products (cereals, vegetable oils, oil seeds, and iron and steel). The EU’s imports of agricultural products from Ukraine experienced a surge following a temporary full trade liberalization enacted in early June 2022. This measure, while expiring in mid-September 2023, significantly increased agricultural imports from Ukraine, although it also led to market distortions in neighboring countries, resulting in the temporary imposition of restrictions on Ukrainian agricultural exports in May 2023. These measures were lifted in September 2023. Despite a decline in Ukraine’s share of sunflower oil in the extra-EU market (from 94% to 79% between Q4 2022 and Q4 2024), imports of products such as rape/colza seeds, soybean oil, maize, sunflower oil, and iron and steel increased between 2023 and 2024. Imports of wood, however, decreased during this time. The decline in iron and steel imports, specifically, represents a 48-percentage point drop from Q4 2021 to Q4 2024.

Are there significant challenges and impacts?

  • Russian Invasion: Russia’s invasion significantly disrupted trade flows, particularly during the first quarter of 2022. While exports bounced back, it impacted on agricultural exports, as neighboring EU countries experienced a surge in imports leading to restrictions imposed on certain agricultural imports for a period.
  • Logistics and Infrastructure: The war heavily impacted Ukraine’s infrastructure, disrupting both exports and imports. The Black Sea grain corridor was crucial in restoring some export routes. However, significant challenges remain in terms of infrastructure, ports, and transportation.
  • EU Support: The EU has provided substantial financial assistance to Ukraine, including a €3.5 billion package in late 2024 (an advance on a larger €50 billion aid fund established in early 2024) to alleviate budget strains and support military procurement. The supply of weaponry beyond the summer of 2025 remains uncertain.

What does the future of an EU-Ukraine trade relationship look like?

The EU-Ukraine trade relationship will continue to evolve in response to the war’s progression and the evolving geopolitical landscape. The EU’s ongoing support, both financially and in terms of trade facilitation, will play a crucial role in Ukraine’s economic recovery. While agricultural exports remain important, the long-term trajectory depends on rebuilding infrastructure, securing safe export routes, and managing market fluctuations. The EU’s role in supporting this growth is significant, and the relationship is expected to remain crucial for both sides.

Source: Euronews.com

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CBSA initiates administrative review of an exporter of certain mattresses from China https://www.livingstonintl.com/cbsa-initiates-administrative-review-of-an-exporter-of-certain-mattresses-from-china/ Mon, 28 Apr 2025 20:17:04 +0000 https://www.livingstonintl.com/?p=62299 Administrative reviews are conducted periodically by CBSA to update normal values, export prices or amounts of subsidy and to establish values for new exporters or new models and to ensure that the values in place accurately reflect current market conditions. On April 24, 2025, the Canada Border Services Agency (CBSA) initiated an administrative review of... Read more »

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Administrative reviews are conducted periodically by CBSA to update normal values, export prices or amounts of subsidy and to establish values for new exporters or new models and to ensure that the values in place accurately reflect current market conditions.

On April 24, 2025, the Canada Border Services Agency (CBSA) initiated an administrative review of goods subject to the mattresses SIMA case, exported by Jiangsu Manope Hometextile Co. of Japan.

Normal values and an amount of subsidy established during this review will be effective for the subject goods released from the CBSA on or after the date of the conclusion of the review

Exporters who decide to participate in this review are required to provide complete and accurate responses to the CBSA’s Request for Information (RFI) by June 2, 2025.

Complete details regarding this review are available here.

Please contact your Livingston account representative should you have any questions.

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United States Surtax Remission Order (2025) now in effect https://www.livingstonintl.com/united-states-surtax-remission-order-2025-now-in-effect/ Thu, 24 Apr 2025 21:16:08 +0000 https://www.livingstonintl.com/?p=62289 The Canada Border Services Agency (CBSA) posted Customs Notice 25-19, providing information on the United States Surtax Remission Order (2025) which came into effect on April 16, 2025. The Remission Order allows the relief of surtaxes paid or payable on eligible goods by the United States Surtax Order (2025-1), the United States Surtax Order (Steel and Aluminum 2025) or... Read more »

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The Canada Border Services Agency (CBSA) posted Customs Notice 25-19, providing information on the United States Surtax Remission Order (2025) which came into effect on April 16, 2025.

The Remission Order allows the relief of surtaxes paid or payable on eligible goods by the United States Surtax Order (2025-1), the United States Surtax Order (Steel and Aluminum 2025) or the United States Surtax Order (Motor Vehicles 2025). The remission can be applied retroactively to qualifying goods imported since the March surtaxes went into effect.

The Order intends to minimize the negative effects of the surtaxes on Canadian companies and entities by providing relief for goods that are used in Canadian manufacturing, processing and food and beverage packaging, and for those used to support public health, health care, public safety, and national security objectives.

Please refer to Customs Notice 25-19: United States Surtax Remission Order (2025) for complete details regarding the circumstantial requirements and application of the remission.

All claims for surtax relief must be supported by all relevant documents (e.g., Commercial Accounting Document (CAD), purchase order, commercial invoice, Canada customs invoice, bill of lading, waybill) that demonstrate that they meet the following conditions of relief set out in the Remission Order:

(a) the good was imported into Canada before October 16, 2025;

(b) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good; and (c) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.

For further assistance or clarification, consult with a Livingston trade professional.

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FDA urges importers to sign up for ITACS https://www.livingstonintl.com/fda-urges-importers-to-sign-up-for-itacs/ Thu, 24 Apr 2025 20:59:39 +0000 https://www.livingstonintl.com/?p=62283 The FDA has warned importers who rely on mail deliveries that due to reduced capacity to produce and mail hard-copy Notices of Action (“notices”), they are strongly encouraged to use the FDA Import Trade Auxiliary Communication System (ITACS). ITACS enables electronic distribution of FDA notices, including those for exams, detentions, and sampling, eliminating delays from... Read more »

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The FDA has warned importers who rely on mail deliveries that due to reduced capacity to produce and mail hard-copy Notices of Action (“notices”), they are strongly encouraged to use the FDA Import Trade Auxiliary Communication System (ITACS).

ITACS enables electronic distribution of FDA notices, including those for exams, detentions, and sampling, eliminating delays from traditional mail. Accounts offer access to up-to-date entry status and details of information requests.

Importers can access basic ITACS functionality at https://itacs.fda.gov. To create an account, visit the FDA Unified Registration and Listing System (FURLS) at https://www.access.fda.gov/oaa. The FDA strongly urges all importers to transition to this electronic system to ensure timely receipt of critical information.

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SIMA – Provisional duties now payable on certain corrosion-resistant steel sheet from Turkey https://www.livingstonintl.com/sima-provisional-duties-now-payable-on-certain-corrosion-resistant-steel-sheet-from-turkey/ Wed, 23 Apr 2025 12:59:15 +0000 https://www.livingstonintl.com/?p=62275 On April 17, 2025, the Canada Border Services Agency (CBSA) made a preliminary determination of dumping with respect to imports to Canada of Corrosion-Resistant Steel Sheet, exported by Borçelik Çelik Sanayi Ticaret A.Ş (Borçelik) of Turkey. As a result of the determination, provisional Anti-dumping duties are now payable at a rate of 22.9% on imports... Read more »

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On April 17, 2025, the Canada Border Services Agency (CBSA) made a preliminary determination of dumping with respect to imports to Canada of Corrosion-Resistant Steel Sheet, exported by Borçelik Çelik Sanayi Ticaret A.Ş (Borçelik) of Turkey.

As a result of the determination, provisional Anti-dumping duties are now payable at a rate of 22.9% on imports of subject goods that were released from Customs on or after April 17, 2025.

Please refer to Appendix 1 of CBSA’s Notice of initiation of investigation: Corrosion-Resistant Steel Sheet 3  for detailed description of the subject goods.

Please refer to Notice of preliminary determination: Corrosion-Resistant Steel Sheet 3 for additional details.

The Canadian International Trade Tribunal (CITT) will now perform an inquiry to determine whether the dumping of the above-mentioned goods has caused injury or retardation or is threatening to cause injury to the Canadian domestic industry. Their inquiry is available here.

The Statement of Reasons regarding CBSA’s preliminary determination will be available on the Notices section of CBSA’s website within 15 days of the determination.

Please contact your Livingston account representative should you have any questions.

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Amendment to U.S. tariffs on goods originating outside North America, effective April 10, 2025 https://www.livingstonintl.com/amendment-to-u-s-tariffs-on-goods-originating-outside-north-america-effective-april-10-2025/ Fri, 11 Apr 2025 14:58:14 +0000 https://www.livingstonintl.com/?p=62236 On April 4th, the Government of the United States imposed a universal 10% tariff on all imports into the U.S. from outside of North America, effective 12:01 a.m. ET on April 9, irrespective of origin. Along with those tariffs, imports from a targeted list of approximately 60 countries were to be tariffed at varying, higher... Read more »

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On April 4th, the Government of the United States imposed a universal 10% tariff on all imports into the U.S. from outside of North America, effective 12:01 a.m. ET on April 9, irrespective of origin.

Along with those tariffs, imports from a targeted list of approximately 60 countries were to be tariffed at varying, higher rates. Those higher rates have now been put on pause for a period of 90 days, effective 12:01 a.m. ET, April 10, 2025, to allow the U.S. administration to negotiate with each individual country that seeks to negotiate new trade terms with the United States.

China
The exception to this policy is China, which will see its tariff rate now spike to 125%. It is important to understand the tariffs against China-origin goods are stackable tariffs, meaning they are imposed in addition to, not in place of, existing tariffs.

To recap, the current tariffs on China-origin goods are summarized as follows:

  • Standard Most-Favored Nation (MFN) tariff (varies by product)
  • 7-25% tariffs (in rare cases 100% tariffs) imposed in phases over the course of 2018 on most (not all) China-origin goods
  • 10% tariff imposed under the International Emergency Economic Powers Act (IEEPA), effective February 3, 2025
  • 10% tariff imposed under IEEPA, effective March 4, 2025
  • 84% imposed under IEEPA, effective April 9, 2025
  • 41% imposed under IEEPA, effective April 10, 2025

This means the combined tariffs against China-origin goods could be more than 170% (in rare cases even higher).

Impact on low-value goods originating in China and Hong Kong
Effective 12:01 a.m. ET on May 2, 2025, goods that fall within the $800 de minimis threshold that originate in China or Hong Kong, and that are transported into the U.S. via courier, will be subject to all applicable duties.

Low-value goods that enter the U.S. through postal service will be subject to a tariff rate of 90%, or a fee of $75 per package ($150 after June 1, 2025) in instances where the value of the product is not listed. In addition, U.S. Customs and Border Protection (CBP) may, at its discretion, require a formal Customs entry for goods entering the U.S. from China or Hong Kong through the international postal network. In the event a formal entry is required, the goods will be subject to the standard applicable duties, rather than the aforementioned 90% tariff rate or $75 package fee ($150 after June 1, 2025).

Impact on low-value goods (excluding China and Hong Kong)
The new tariffs of 10% or more will apply to all low-value shipments that fall within the de minimis threshold of $800. However, the application of these tariffs on low-value shipments will only take effect at a yet-undefined date in the future when the Department of Commerce has established an effective means of collecting duties on these items.

Impact on Canada and Mexico
Canada and Mexico will not be impacted by this latest tariff action as the U.S. government has already imposed tariffs of 25% on all goods originating in Canada and Mexico, save for energy products and potash, which are tariffed at 10%.

As such, the additional universal 10% tariff that came into effect on April 9, 2025, will not be applied to goods originating in Canada and Mexico until such time that the current 25% and 10% tariffs have been suspended or cancelled.

The 25% and 10% tariffs (on energy and potash) against Canada-origin and Mexico-origin imports into the U.S. is waived when the imports qualify for duty exemption under the United States-Canada-Mexico Agreement (USMCA).

Calculation of duties
The aforementioned duties of 10% or more will be applied only to the non-U.S.-originating portions of the imported product, provided the U.S.-originating portion makes up 20% or more of the product’s total value.

This will be particularly important for importers with globally integrated supply chains that make use of a mix of U.S. and foreign production facilities to manufacture components of their goods.

Exemptions
The newly introduced reciprocal tariffs will be eligible for duty drawback. In addition, a small number of products have been exempted from these tariffs, including:

  • Automobiles (which have a separate, universal tariff of 25% applied), effective 12:01 a.m. ET on April 3, 2025
  • Automobile parts (which will have a separate, universal tariff of 10% applied), effective 12:01 a.m. ET on May 3, 2025
  • Steel and aluminum products
  • Steel and aluminum derivatives
  • Other products, including copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products

Impact on Customs bonds
The implementation of a 25% tariff may push importers’ duty outlay beyond the value of their current customs surety bond. It is important to understand the impact of these tariffs to your customs surety and be proactive in addressing any surety shortfall. For more information, please click here.

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Four pillars to mitigating duty pain amidst escalating trade wars https://www.livingstonintl.com/four-pillars-to-mitigating-duty-pain-amidst-escalating-trade-wars/ Thu, 10 Apr 2025 13:08:37 +0000 https://www.livingstonintl.com/?p=62225 By Jill Hurley On April 3, 2025, the world woke up to a new global order. Precisely how orderly it will be only time will tell. For now, enterprises globally will need to reckon with a dramatic overturn of the global trading system. What was once familiar, is now foreign. What was predictable is now... Read more »

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By Jill Hurley

On April 3, 2025, the world woke up to a new global order. Precisely how orderly it will be only time will tell.

For now, enterprises globally will need to reckon with a dramatic overturn of the global trading system. What was once familiar, is now foreign. What was predictable is now uncertain.

For most importers, it’s that uncertainty that is ultimately at the heart of their trepidation. Too much change. Too fast. Too inconsistent.

At Livingston, a recent survey of our clients shows the toll this is taking. Nearly one-third (29%) are reporting 10-25% of their revenue has already been impacted by enacted tariffs, 18% have had between a quarter and half their revenue impacted and 13% have had more than half their revenue affected. When looking ahead, those numbers get bigger, not smaller. And it’s the smaller to mid-range importers who are disproportionately hemorrhaging dollars.

A scan of headlines shows companies are already taking actions ranging from temporary layoffs to consumer incentives, to reshoring and nearshoring.

There’s no panacea; no universal solution. Each business will have to determine how best to cope with the tariffs based on its supply chain configuration and end markets. But there are key considerations that all businesses should be taking when making those determinations.

The nutshell
In the past six weeks we have seen a flurry of tariff activity originating out of Washington and reverberating throughout the world. Let’s do a quick summary to wrap up how much tariff action we’ve seen.
• 25% tariff on all Canada-origin and Mexico-origin goods entering the U.S. (with the exception of energy resources and potash) that DO NOT satisfy the United States-Mexico-Canada Agreement (USMCA) Rules of Origin.
• 10% tariff on all Canada-origin energy resources.
• 10% tariff on Canada-origin potash
• 25% tariff on all Mexico-origin goods (with the exception of potash).
• 10% on all Mexico-origin potash
• An additional 10% tariff on all China-origin goods entering the U.S. from China was imposed on February 4, 2025 (note that this tariff is above and beyond any existing tariffs against imports from China that have been imposed since 2018).
• Another 10% tariff was added to China-origin goods effective March 4, 2025.
• A tariff of 25% was imposed on all steel and aluminum tariffs (irrespective of origin) on March 12, 2025.
• A tariff of 25% was imposed on countries that import Venezuelan oil, effective April 2, 2025 (applicable countries to be determined by the Secretary of State).
• A tariff of 25% was imposed against all imports of passenger vehicles, irrespective of origin, effective April 3, 2025.
• A tariff of 25% is set to be imposed on all automobile parts, effective May 3, 2025.
• A tariff of 10% was imposed on all imports into the United States, irrespective of origin and product, effective April 5, 2025.
• Varying tariff rates were imposed on goods originating from approximately 60 countries, effective April 9, 2025 (excluding Canada and Mexico)

So, there you have it. A flurry of tariff action within two short months and most of it just in the past five weeks. Businesses that made an attempt at strategizing on March 4th likely found themselves back at the drawing board by April 3rd. And what’s to come is anyone’s guess.

Even so, importers and exporters have to start somewhere and leverage fundamentals to guide their decision making. In many cases, they’re looking at core costs – labor, transportation, material inputs—and understandably so. But finding supply chain cost savings amidst trade wars also requires delving into the customs considerations that are often overlooked when trade is liberalized.

  1. Don’t write off the trade deals just yet
    When the tariffs against Canada and Mexico hit on March 4th, many were ready to toss the United States-Mexico-Canada Agreement (USMCA) into the dustbin of economic history.

    As it turns out, that trade deal is more valuable today that it’s ever been for North American importers and exporters. That’s because all the tariffs listed above are in addition to, not in place of, already existing tariffs. That means the USMCA is still doing its original job of neutralizing Most-Favored Nation (MFN) tariffs.

    But more importantly—at least for now—the USMCA is every North American importers ticket to mitigating the impact of the new tariffs, many of which provide for either a full exemption of tariffs on USMCA-qualifying goods, or at the very least an exemption on the U.S.-originating content. In today’s environment, that adds up to massive cost savings on duty outlay, particularly for high-volume or high-value importers.

    But to take advantage of avoiding duties on U.S.-originating content, importers will need to put much more emphasis on origin determination and origin verification than they may have in the past. Much of the leg work we do as trade consultants involves reviewing bills of materials and supplier solicitation to get to the heart of what’s made where and how it’s breaks down as a percentage of content. That may have seemed unnecessarily tedious and superfluous for a 2.5% MFN rate, but now that rates are 25% or more, the value seems suddenly self-evident.
  2. Make cash flow considerations king
    Amid spiking tariffs, the number one goal is to stay liquid. That’s an increasingly difficult proposition in the face of perpetually stacking tariffs, resulting in ballooning duty outlay. To retain cash for as long as possible, importers will want to find ways to defer that outlay for as long as they can.

    That’s where foreign trade zones or FTZs come in. For the uninitiated, FTZs are warehouses and manufacturing hubs where goods intended for re-export can be brought into a country for storage or production without duty obligation. There are about 3,500 FTZs in the world; 200 of them are in the U.S.; more than 20 in China and more than 250 in India.
    Using FTZs allows importers to hang onto the large sums of cash they’re now being asked to dole out in increasing amounts for longer. That’s more money for growth and more of a cushion for the unexpected.

    At my firm, when we conduct Trade Optimization Studies (TOS)—studies of trade data to identify opportunities to optimize trade operations—on behalf of a client, the use of FTZs is always a core consideration when examining how to reduce cost and time in transit.
  3. Engineer your way to cost savings
    No, not the kind of engineering the folks at auto companies do. In my line of work, there’s a lot of time spent on tariff and origin engineering. The first is finding ways to alter the state of a product so that it falls under a different tariff code that has a lower tariff rate. The second is finding ways to use geography to your advantage by shifting production steps or component sourcing to countries that have more favorable tariff terms with your end market.

    Origin engineering will be particularly helpful to U.S. importers who currently source supply from one of the 57 countries on which the U.S. just targeted with substantial universal tariffs, ranging from 11 percent to as high as 50 percent. Shifting production or sourcing to non-targeted countries can help importers avoid the worst of the tariffs, but customs consideration should be balanced against other considerations, such as skill and availability of labor, corporate tax rates, transport and port infrastructure and more.
  4. Know your value
    Valuing a product might seem like an intuitive process, but like most things related to customs compliance, the devil is in the details. In the case of tariff-impact mitigation, so is the angle. Precisely what gets calculated into the value of your product can have a profound influence over what the final number looks like (and the associated duty). There are multiple mechanisms importers can use to reduce the cost inputs tied to the value of their imports.

    As a simple example, the First Sale Rule, allows importers to deduct from the value of their product any markups from transactional middlemen. Of course, this won’t apply for those who purchase goods directly from a manufacturer, but there are other valuation deductions available. Given that the tariffs introduced over recent weeks are stacked tariffs (i.e., they are in addition to all other existing tariffs, not in place of), effective valuation can substantially lower duty outlay.

Stay nimble and carry on
Exactly what will come of the recent explosion of tariffs, reciprocal tariffs and trade protectionism remains the trillion-dollar question. Maybe the tariffs get lowered, altered or canceled altogether. Maybe there will be even more. It’s precisely because of this uncertainty that importers and exporters should be employing best practices to strengthen their resilience to change.

Beyond this, the key will be to establish enough redundancy in global supply chains to be able to pivot quickly in the event of an unexpected turn of events. Nimbleness will be key to navigating this new environment. Those who dig in their heels could find themselves significantly disadvantaged, possibly even in the near term.

Jill Hurley is Senior Director, Global Trade Consulting at Livingston. As the practice leader, she spearheads U.S. import and export projects, offering comprehensive reviews of clients’ business models for risk assessment, crafting, and implementing import/export compliance programs, conducting audits, navigating export licensing requirements, and providing support in U.S. trade remedy matters.

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Canada countermeasures: New tariffs on U.S. autos, effective April 9 https://www.livingstonintl.com/canada-countermeasures-new-tariffs-on-u-s-autos-effective-april-9/ Wed, 09 Apr 2025 20:40:11 +0000 https://www.livingstonintl.com/?p=62219 Effective 12:01 a.m. ET on April 9, 2025, the Canadian government imposed a tariff of 25% on all fully assembled vehicles imported into Canada from the United States that do not qualify for duty exemption under the United States-Mexico-Canada Agreement (USMCA). The tariff will not be applied to goods documented to be in transit at... Read more »

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Effective 12:01 a.m. ET on April 9, 2025, the Canadian government imposed a tariff of 25% on all fully assembled vehicles imported into Canada from the United States that do not qualify for duty exemption under the United States-Mexico-Canada Agreement (USMCA). The tariff will not be applied to goods documented to be in transit at the time the tariff took effect.

Similarly, a 25% tariff will be levied against all non-Canadian and non-Mexican content of vehicles that do qualify for duty exemption under the USMCA. In instances where documentation is not available to identify the percentage value of U.S.-originating content versus non-U.S. originating content, the tariff will apply to 85% of the declared value of the vehicle.

CBSA will accept applications for corrections or adjustments, where applicable. For additional information on applicability and other details related to this action, please refer to the Customs Notice and the full list of affected HTS codes.

These tariffs are being imposed in response to tariffs implemented by the United States against Canada-origin vehicles, effective April 3, 2025.

Note, these new Canadian tariffs are applied only to fully assembled vehicles, not to individual auto parts.

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