Navigating Tariff Changes - Strategies for Mitigating Impact on Your Supply Chain

As we have previously communicated and as you are no doubt aware, there have been recent announcements and changes to tariffs and legislation. As your logistics partner, we aim to keep you informed of developments that could affect your supply chain, understanding that these changes may create uncertainty. We are committed to helping you navigate this evolving landscape.

Please refer to the frequently asked questions about the new import tariffs.

We encourage importers to stay informed, proactive, and prepared to navigate the evolving trade landscape of 2025.

Our Global Trade and Customs Consulting (GTCC) service aims to simplify the complexities of international trade and customs processes. Operating globally, with a presence in North America, Europe, the Indian subcontinent, the Middle East, Asia, and Africa, Maersk GTCC can help businesses manage the customs landscape effectively. This partnership can assist in reducing risks while identifying potential opportunities for cost savings and improved efficiency.

For assistance regarding US regulations, please contact us at: compliance.mcsi.nam@maersk.com. For inquiries related to Canadian regulations, reach out to compliance.ca.mcsi.nam@maersk.com.

To address these challenges, here are some strategies to help mitigate the impact of increased tariffs:

Tariff Mitigation Strategies

• Setting up ACH accounts: Automated Clearing House (ACH)
  • Direct electronic payment from your bank account to U.S. Customs.
  • Timely duty payments, reduced processing times, longer payment cycle
• Tariff engineering
  • Ensuring your goods are classified under the correct HTSUS (Harmonized Tariff Schedule of the United States) and Canadian HS Tariff provisions to benefit from lower duty rates.
    *Please note, any reclassification of goods will only impact the regular duty rate, additional duties applied to all tariff numbers will still be in effect.
• New sourcing
  • Rearrange the sourcing of raw materials, components, or finished goods to countries that are not subject to the new tariffs.
  • Shifting production to countries with favorable trade agreements with the U.S. and Canada or sourcing materials from alternative suppliers.
• Bonded warehouses and Temporary Import Bonds (TIB)
  • Bonded warehouses allow you to store goods without paying duties until they’re used or sold, deferring duty payments and providing significant cash flow benefits.
  • Temporary Import Bonds (TIB) are used for goods that are imported for a specific purpose and will be re-exported within a certain period. This allows you to avoid duties on goods that are not intended for long-term importation.

Advocacy for Tariff Reduction

Currently, no exemptions or exclusions are available, but it’s important to know the process in the event these circumstances change. If exemptions or exclusions become accessible, consider the following.

Getting involved with legislative bodies and regulatory agencies to influence trade policies and secure tariff reductions is crucial. Here’s how you can engage:

• Seeking Section 301 Exclusions by applying for exemptions from certain tariffs under the Trade Act of 1974.
• Advocating for renewal of expired exclusions to ensure continued relief for previously exempted products helps maintain competitive market conditions. Participate in public comment periods and provide detailed economic impact analyses to support your cases.

Bond Sufficiency

Maintaining adequate Customs bonds is essential to avoid delays in clearance.
How to calculate bond amounts:

• US: Based on anticipated import duties, taxes, and fees over a 12-month period.
• Canada: Based on 50% of your highest monthly outlay of duty, taxes and fees in the past 12-month period. Required amount of coverage can be found in your CARM portal.
• Regularly review and adjust your bond amounts to ensure they remain sufficient as trade volumes and duty rates change.
• Steps required to secure new import bonds if necessary
  • Work with surety companies to obtain bonds that meet U.S. & Canada Customs requirements
  • Submit the necessary documentation and ensure that bond amounts are updated in a timely manner to prevent supply chain disruptions.

Other Common Strategies

If you have been considering any of the following traditional duty saving tools, this may be a good time to evaluate if they fit your needs.

• First Sale Method – Triangle trade valuation basis using the earliest price paid on imported merchandise.
• Vessel Level Clearances – Save on Merchandise Processing Fees by combining multiple bills of lading on a single entry.
• High Level Risk Assessment - A holistic view of the supply chain and where risk can be identified and mitigated. Review past imports for potential duty overpayments and claim refunds where applicable.
• US Drawback – Recover 99% of eligible duties and fees. *Please note, additional duties from this round of tariffs are not subject to drawback recovery.
• Canada Duty Relief & Drawback Programs
• Duties Relief Program: Import goods without paying duties or surtaxes if they will be re-exported or used in manufacturing for export.
• Duty Drawback Program: Allows businesses to recover 100% of duties and surtaxes paid on imported goods that are later exported, either as-is or after processing.

We are here to support you with your logistics needs and will continue to provide customer advisories and updates as the situation develops.