Search for Attorney CPA

Tariffs Not Only Consideration in Making Foreign Trade Decisions

by Lenny Feldman on Categories: trade considerations

Tariffs Not Only Consideration in Making Foreign Trade Decisions

President Trump’s recent announcement that he would impose additional tariffs, also known as duties, on steel and aluminum imports has stirred concerns about the impact on manufacturers, consumers and import-export firms in South Florida and around the nation.

However, it’s important to remember that there already is a complex web of tariffs, antidumping and countervailing duties (AD/CVD) and product admissibility regulations already in place, covering a wide array of products, especially from countries without a free trade agreement (FTA) with the U.S. For example, there may be tariffs and AD/CVD on imported ball bearings, shrimp, crawfish and garlic, as well as substantial tariffs on apparel and footwear from non-FTA countries.

While imported agricultural products are usually not subject to tariffs, they must meet safety and quality control requirements set by the U.S. Department of Agriculture and the Food and Drug Administration for import admissibility

That means South Florida importers and exports need to understand the rules, and be aware of the potential for U.S. Customs and Border Protection (CBP), as well as about 50 other federal agencies regulating product admissibility, to enforce compliance with those regulations. Importers in particular need to pay close attention to the nature and sources of the products they are bringing into the United States.

In some cases, there may be duty-saving options available to avoid high tariff requirements. However, the ability to import products from FTA sources is considered a privilege, not a right. For example, a CBP representative might ask about the origin of the yarn used in a garment assembled in an FTA country. If the yarn came from a non-FTA source, then the importer might have to pay both current and past duties – a potentially expensive proposition.

The impact of the president’s announcement of a 25 percent tariff on steel and a 10 percent tariff on aluminum on South Florida is likely to depend on how the policy is applied. Canada, Mexico, South Korea and Brazil are excluded, but we are unsure about tariffs from other countries. That could affect the region’s importers of aluminum doors, window frames, building materials and other household products.

If the new tariffs are imposed on China, it is certainly possible that there could be a retaliatory action from one of South Florida’s biggest trading partners. The most recent statistics from the Miami Customs District (which covers South Florida seaports and airports north to Tampa) indicate that aircraft engines and parts, aluminum waste and scrap, and scrap iron and steel are among our top 10 exports. The region’s top imports from China include cell phones, computers, furniture, printers and motor vehicle parts.

If foreign trade is important to your business, you should pay close attention to developments in Washington, confirm current and changing tariffs and admissibility requirements that apply to your products and be prepared to change your sourcing if necessary. In the current political climate, you should also be an advocate for international trade, which supports hundreds of thousands of jobs in South Florida. It’s vital for state and federal policymakers to understand the importance of maintaining strong two-way relationships with our trading partners around the world.

Attorney Lenny Feldman is a senior member residing in Sandler, Travis & Rosenberg, P.A.'s Miami office. He focuses his practice on import, tariff, admissibility and enforcement issues.



© 2023 . All rights reserved.