Recent Tariff Changes and Their Impact
The U.S. has recently implemented significant tariff increases, affecting companies engaged in global trade. These changes impact supply chains, increase costs, and create new compliance challenges.
- Canada & Mexico: A 25% tariff now applies to imports, with temporary exemptions for USMCA-qualified goods until April 2, 2025. Additionally, certain Canadian energy and potash products face a reduced 10% tariff.
- China: The tariff on Chinese imports has increased from 10% to 20%, prompting Beijing to introduce retaliatory measures.
These adjustments pose serious financial and operational risks, requiring businesses to reassess contracts, supply chains, and compliance strategies
Who Should Be Concerned?
These tariff changes affect a broad range of industries, including:
- Manufacturers relying on raw materials or components from Canada, Mexico, or China.
- Retailers & Importers sourcing products affected by higher tariffs.
- Tech & Electronics Companies dependent on Chinese supply chains.
- Agricultural & Food Businesses exporting goods that may face retaliatory tariffs.
- Logistics & Shipping Companies managing increased costs and trade disruptions.
- Investors & Financial Institutions assessing the economic ripple effects of trade barriers.
For these businesses, staying proactive and compliant is essential. Below is a checklist to help mitigate risks and navigate this evolving trade landscape.
Checklist: How to Protect Your Business from Tariff Risks
- Review Your Contracts
- Identify “change in law” clauses that allow for price or timeline adjustments.
- Assess whether force majeure provisions apply to tariff-related disruptions.
- Evaluate Your Supply Chain
- Explore alternative sourcing or manufacturing locations to reduce tariff exposure.
- Consider bonded warehouses or duty drawback programs to minimize tariff costs.
- Ensure Compliance with Trade Regulations
- Verify tariff classifications to avoid misrepresentation and penalties.
- Stay updated on customs regulations and reporting requirements.
- Assess Financial & Legal Risks
- Review pricing structures to reflect tariff changes and prevent unexpected costs.
- Consult legal counsel on potential liabilities under the False Claims Act for incorrect tariff declarations.
- Develop a Tariff Contingency Plan
- Monitor trade policy updates and anticipate future adjustments.
- Educate internal teams on trade compliance and risk management strategies.
Need expert guidance? Contact us today to discuss strategies that will help your business stay ahead in this shifting global trade environment.