How to Deal with U.S. Tariffs: Six Tips to Lessen the Impact of Tariffs on Imports.

How do tariffs work?  

The Tariff is a customs tax that is applied to all goods that enter or leave a country. It is also known as customs duty, and its purpose is to strengthen and protect national trade. 

When a company wants to import its products, it must pay a tariff based on the type of product it will import, its country of origin, as well as the regulations in place. Such tariffs can significantly increase the total cost of a business operation.

When a company wants to import from abroad, it must consider that these goods will be subject to customs duties, which are taxes determined by several factors. These include the nature of the product (its classification within the Harmonized System or HTS code), the country of origin and any trade agreements in place between that country and territory to which it is imported.

In addition, local regulations and current tariff policies, such as the well-know "Trump tariffs", also significantly influence the determination of the final amount that must be paid for the import or export of goods. These additional charges can represent a considerable increase in the total cost of the operation, directly impacting the profitability and competitiveness of the product in the destination market.

What impact do the global tariffs imposed by the United States have? 

The United States has generated an aggressive strategy with global tariffs on countries around the world, including China, Mexico and other trading partners on products such as steel, aluminum and electric goods. These measures, commonly known as "Trump tariffs", have impacted global logistics costs, generating inflationary pressures (global rates inflation) and altering supply chain planning.

Customs tariffs increase the cost of imported goods, which can make certain routes or suppliers less profitable. In addition, they cause adjustments in the supply chain, such as changes in origins, logistics redesigns or even the relocation of production.

How does the increase in tariffs affect companies in Mexico?  

Mexican companies that export to the United States face targeted tariffs on key sectors such as automotive, steel, aluminum and agricultural products. These customs tariffs, determined by HTS codes and international trade policies, vary by product and bilateral conditions. 

In turn, companies that import inputs from Asia or the U.S. must deal with additional costs such as global tariffs for customs duties, logistics and regulatory fees, which raises their operating costs and complicates financial planning. This forces organizations to constantly adjust their supply chains and sourcing strategies to stay competitive.  

At SPARX , we offer solutions to reduce the impact of tariffs and optimize international logistics. 

How does the increase in tariffs affect exporting companies in China?   

The increase in global tariffs by importing countries, such as the United States, has had a direct impact on Chinese companies that depend on foreign trade. These high tariffs make their products more expensive in the destination markets, making them less competitive against suppliers in other regions. As a result, many companies have experienced a decrease in demand, due to Trump's tariffs which has caused them to adjust their prices and have lost their share in key markets. 

In addition, the changing regulatory environment has forced companies to redesign their export strategies, seek new markets, diversify their production lines, or move part of their operations to other countries to avoid the highest tariffs. This context has also accelerated the adoption of strategies such as friend-shoring or the relocation of supply chains to maintain business continuity. 

What can companies do to mitigate the impact of U.S. tariffs?  

This is where our solutions come in. At SPARX,  we have more than 30 customized strategies to reduce or avoid the costs of customs duties. Here are six of them: 

6 key solutions to deal with global tariffs: 

1. Tariff Engineering:  Product design or classification changes (HTS codes) to reduce the applicable tariff without affecting functionality or value. 

2. Trade Compliance Management:  Comprehensive regulatory compliance management to avoid penalties and take advantage of legal opportunities. 

3. Demand Planning:  Strategic demand planning to avoid urgent purchases with high customs duties. 

4. Alternative Sourcing:  Search for suppliers in countries with favorable trade agreements or without global tariffs. 

5. Foreign Trade Zones (FTZ):  Use of special zones where merchandise is not subject to tariffs until it is traded. 

6. Robust Supply Chain Assessments:  In-depth assessment of your supply chain to identify risks and optimize routes and times. 

Conclusión 

Rising global tariffs, determined by product type, origin, and trade regulations, are impacting global markets. The tariff war initiated by the United States not only affects imported products, but also its own citizens, as many products will see a price increase to compensate for tariff differences. This could lead to inflation worldwide.

If countries fail to reach an agreement, nations such as Mexico and China, which are especially vulnerable, will have to adapt to these changes by implementing strategies to optimize costs and adjust their planning to stay competitive.

Would you like to know the 30 solutions we offer to manage and reduce duties and taxes? Contact us and one of our global logistics experts will provide you with personalized advice.