U.S: Tariff Strategies
- Arne Mielken
- 7 hours ago
- 4 min read
🔓 With U.S. tariffs on the rise, companies need to be proactive. Learn how classification engineering, valuation strategies, and smart trade programs can protect your margins.
U.S. trade policies have shifted dramatically in recent years, particularly regarding tariffs on imports from countries like China. What started as a strategy to rebalance trade has evolved into a complex, sometimes unpredictable, framework affecting a broad range of goods.
For importers, rising tariffs can mean significant cost increases. That’s why understanding how to avoid, mitigate, and recover from tariff impacts is more critical than ever.
This guide will walk you through practical strategies to manage tariffs effectively and stay competitive.
Read also:
USA: 10 Ways to Manage Customs Duty Costs Managing customs duty is key to reducing costs and ensuring compliance. Here are 10 actionable tips to streamline your process. |
Summary of Tariff Strategies
Strategy | Key Actions | Tools & Programs | Example / Pro Tip |
Avoid | Plan imports to reduce duty exposure | Tariff Engineering, HTSUS Chapter 98, Origin Engineering, FTAs, GSP, MTBs, Section 321 | Columbia Sportswear added zippered pockets → lower tariff; import components separately rather than as finished product |
Mitigate | Reduce financial impact when avoidance isn’t possible | First Sale Valuation, Transfer Pricing, Trade Remedy Reviews, Duty Deferral / FTZs | Electronics importer uses FTZ → defers tariffs until export; review related-party pricing to lower dutiable value |
Recover | Reclaim overpaid duties | Duty Drawback, Refunds, Transfer Pricing Adjustments, Reconciliation, Post-Entry Procedures & Protests | Duty Drawback program → recover up to 99% of duties on exported or destroyed goods; file post-summary corrections for overpaid tariffs |
1. Avoiding Tariffs: Plan Ahead
Avoidance isn’t about dodging rules—it’s about planning your imports strategically.
Tariff Engineering
U.S. Customs and Border Protection (CBP) applies duties based on product classification. Smart importers use Tariff engineering to reduce or eliminate duties. For example, importing components separately instead of a finished product may lead to a lower tariff.
HTSUS Chapter 98
Importers can leverage HTSUS Chapter 98 to reduce or even avoid tariffs. This chapter provides exemptions for specific goods in certain production scenarios, By carefully structuring imports to meet these criteria, companies can legally lower their tariff burden while staying fully compliant with U.S. trade law.
Origin Engineering
If changing the classification isn’t possible, altering the product’s country of origin may help. U.S. rules consider the location of final assembly when determining origin. Shifting production to countries outside high-tariff lists can reduce duties—but every step must comply with commercial reality rules.
Free Trade Agreements (FTAs) & Preference Programs
The U.S. has 14 FTAs, including with Canada, Mexico, and South Korea. Qualifying imports under these agreements can be duty-free. Generalized System of Preferences (GSP) also reduces or eliminates duties for products from developing countries. Checking eligibility for your goods can translate into substantial savings.
Miscellaneous Trade Bills (MTBs)
MTBs temporarily reduce or eliminate tariffs on certain goods not produced domestically. These apply to thousands of products but expire regularly. Monitoring updates and renewals is essential.
Low-Value Shipments
Section 321 of the Tariff Act of 1930 allowed shipments valued at $800 or less to enter duty-free, processed faster. This is not discontinued.
Exclusions
Some products may qualify for exclusions from. USTR regularly reviews potential exclusions, particularly for goods in Chapters 84 and 85. Companies can submit comments and track updates to take advantage of these opportunities.
2. Mitigating Tariff Impacts: Reduce the Burden
When avoidance isn’t possible, mitigation strategies help reduce the financial impact.
First Sale For Export
This approach allows importers to pay duties based on the price a middleman paid for goods, rather than the higher price paid by the final importer. First sale valuation can lead to significant long-term savings when carefully validated.
Valuation Strategies
Review your pricing to see if costs such as commissions, shipping, or inspection fees can be excluded from the dutiable value. Related-party transactions may also benefit from transfer pricing rules, potentially lowering the duty base.
Trade Remedy Reviews
Antidumping and countervailing duties apply to certain goods. Companies can request periodic reviews, scope rulings, or new shipper reviews to potentially reduce these duties or exclude specific goods.
Duty Deferral
Goods stored in Foreign Trade Zones (FTZs) can be manipulated without incurring higher duties. Exporting, re-exporting, or holding goods until tariff reductions or exclusions are granted helps avoid unnecessary payments.
3. Recovering from Tariff Impacts: Get Money Back
Even with careful planning, businesses may face increased duties. Recovery strategies ensure you reclaim overpaid costs.
Duty Drawback
CBP duty relief programs offer some welcomed customs duty relief with a programme called U.S. Duty Drawback. We look at what it is and how it can benefit U.S. companies.
Refunds
Importers may be eligible for refunds if tariffs were incorrectly imposed. For example, cases related to Chinese imports may allow eligible companies to claim back duties already paid.
Transfer Pricing Adjustments
Adjusting transfer prices between related entities can reduce dutiable value, entitling importers to refunds on overpaid duties.
Reconciliation
CBP’s reconciliation program lets importers submit entry summaries with the best available data and correct them later. If adjustments lower the dutiable value, excess duties can be refunded.
Post-Entry Procedures & Protests
Post-summary corrections and protests allow importers to fix mistakes after entry. Properly executed, these processes can lead to substantial refunds.
Key Takeaways
Managing tariffs requires a proactive, multi-layered approach. Successful importers:
Audit classifications regularly.
Incorporate tariff engineering into product design.
Rethink supply chain footprints strategically.
Leverage FTAs and origin rules.
Engage trade lawyers, customs brokers, and operational experts.
By using a combination of avoid, mitigate, and recover strategies, companies can reduce their tariff burden, protect margins, and remain competitive.
How We Can Help
Customs Manager USA specializes in helping U.S., EU, and UK companies navigate complex trade regulations. From customs clearance to compliance training, we provide end-to-end solutions tailored to your business. Based in New York, our network of specialists ensures practical guidance for any trade challenge.
Need support managing tariffs effectively? Book a free consultation at www.customsmanager.org and start building a smarter tariff strategy today.
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