Navigating the Tariffs Wave: Legal Implications

As global commerce reaches a pivotal moment, understanding the implications of tariffs is more crucial than ever. Our recent webinar explored the legal ramifications of the latest tariff developments and their effects on international trade. Don’t miss the opportunity to stay ahead.

Speaker

Sarah Sprinkle, Member, Sandler, Travis & Rosenberg, P.A.

Moderator

Vivek Ramachandran, Head of Global Trade Solutions, HSBC

1. The new normal – There are already tariffs in place from Trump’s first term, and new levies will be cumulative. Unless something changes, such as Congress gets involved to roll back the tariffs, the 10% tariff will be the new normal, which is a significant increase on the pre-April status quo of around 2%. Even after negotiations that result in a deal with a trade partner, the 10% levy will still likely be in place.
2. Potential tariffs to come – These include: (1) A portage on Chinese ships, as the US believes that China’s influence in the shipbuilding industry disadvantages the US ship industry, (2) Tariffs on any countries that import oil and oil products from Venezuela. (3) Product-specific tariffs on semiconductors, pharmaceuticals, and critical minerals.
3. How to mitigate tariffs – (1) First sale, which is a valuation methodology that looks at the first sale and can be used to lower the customs value, and thus the tariff that needs to be paid. This will put intercompany sales in the spotlight. (2) Bonded warehouses, where goods can be stored. The duty will only be applied once the product exits the warehouse, which is especially relevant to goods where the tariffs could be removed in the near future.
4. How to recover tariffs – Companies should not only focus on the tariffs owed at the time of importation, but also the significant adjustments that can be made subsequently. These can include refunds, transfer pricing, and reconciliation, post-entry procedures, and duty drawbacks for products that are subsequently exported.

Watch the replay video for more information. We hope you find the webinar insightful and valuable for your strategic planning. Please reach out to your HSBC representative if you would like to follow up, and receive an invite of the next call in our series.