Hiring Foreign Employees
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If your company does business internationally it is important to know what it takes to hire foreign employees. Different countries have different laws and if you do not understand how to hire properly, you could be really holding back your company. Immigration here in the United States is a complex process. This compounded by national discourse can make the process even harder. Today we are going to detail a few steps to take when hiring a global workforce.
The first thing you should do is start early. Understand that there is a lot of red tape involved. Hiring an employee in the United States can be done in a week but hiring a foreign employee can take months or even years depending on which business immigration programs are utilized. Strategize accordingly with realistic hiring timelines.
Part of an early start also means making the necessary preparations within your company. For example, you need to know what roles within your company you want to fill with foreign employees. Once you have identified these roles you need to make plans for recruitment and retention. Create a plan, train your HR department to help your business and employees stay in compliance, and go get that talent through proper internal preparation. Do not hire foreign employees and play it by ear. This will cost your company valuable time, money, and resources.
Lastly, understand your hiring options. There are different visa programs out there and you need to know which one is appropriate for the foreign employees you are interested in. For example, if you plan on your new foreign employee to eventually become a permanent resident, an employer-sponsored green card can be the most effective and predictable way to hire. In turn, if you want to open a new business or a branch of a foreign company then you should utilize the L visa, the E visa, or a strategic combination of the two.
It is important to know all of the ins and outs of hiring foreign employees but starting early, preparing the right way, and understanding all of your hiring options is a great start. If you start internally the process will be much smoother.
International Trade Myths
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International trade has many economic benefits. Free trade allows consumers to buy more, better-quality products at significantly lower costs. With free trade we get economic growth, enhanced efficiency, and increased innovation. These are some of the realities that come with international free trade. What we need to be warry of are the myths that are often associated with international trade.
First, more exports do not necessarily mean more wealth. It is actually the total level of trade that reflects economic wealth. This means total imports and total exports. More exports increase wealth only because they allow us to buy more imports and give non-Americans greater incentives to invest into the economy. If we only export and restrict imports it leaves our economy worse off.
Secondly, many think that free trade means domestic jobs go overseas. False. What really happens depends on the industry. For example, with free trade jobs in highly inefficient industries might be reduced. On the flip side, it frees up resources to create jobs in highly efficient industries, boosting overall wages and improving living standards. Protectionism might “save” some jobs but that comes with a cost. The cost of opportunities and input costs will swell for industries downstream.
Lastly, this sounds counterintuitive but trade deficits are good for us. This is because a trade deficit is usually a signal that global investors are confident in our economic future. Our trade deficit might be larger than it would otherwise be if a trading partner chooses to keep the price of its currency artificially low, but this practice harms the trading partner, not us.
While international trade can have some downsides, overall, there are so many benefits and we have to weed out the misconceptions that are often discussed with this topic. Bust these myths and know the benefits of international trade!
Gas Prices Up & Down
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During the past two years, we have seen gas prices skyrocket. The cost of gas spiked significantly, reaching highs that this country has never seen before. But if you have been paying attention, these past 3 months have been different. According to NBC News, for 98 consecutive days this summer, American drivers experienced declining gas prices thanks in part to a slower worldwide demand for oil. Unfortunately, we are beginning to see prices go back up.
In late September a cut in oil production signaled by the OPEC+ group sent global crude prices higher, pushing prices back up at the pump here in the United States. Major oil producing countries including Saudi Arabia and Russia announced that they are cutting oil production by 2 million barrels per day. According to AAA, the national average for a gallon of gas climbed to $3.92 on October 10th.
Many parts of the United States will see slight increases but Californians and regions surrounding the Great Lakes are in for some super high prices. Patrick De Haan, Head of Petroleum Analysis at GasBuddy says that for the past few weeks, an onslaught of refinery issues both in the west coast and the Great Lakes is the reason why gas prices have tremendously increased. De Haan says refinery issues include undergoing seasonal maintenance along with minor issues that, when put together, greatly limits the ability for refineries to produce gas. It is the combination of planned maintenance, but more so the unexpected outage that have caused prices to soar in some regions. De Haan said that he expects prices to rise as much as $0.30 from their September lows, which would put them at around $4.00 a gallon as an average across the country.
The summer months were good for us as gas prices finally started to come down from the COVID-19 pandemic but unfortunately we are going to see prices surge again until at least the end of the year.
Russia’s Financial Crisis
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If you want to run your own business or if you have just launched your start up this article is for you. Today we are going to go over the best ways to take your young business and make it profitable as soon as possible. What does becoming profitable mean? In short, it means that your business generates a profit rather than a loss. A profit occurs when you generate more income than you spend. So, what are the best business practices to accomplish that?
First, you’ll have to come up with your product or service. When coming up with your product or service, the best thing to choose is something that you have an interest in. You need to center your business around products or services that you truly enjoy learning about. Stay within your area of interest and understanding or ‘circle of competence’. Remember, if you can sell someone of your why you can sell any product or service.
Next, you’ll need to have a business map or strategy. You won’t be able to get where you’re going if you don’t have an outlined path. How do you get from point A to point B? This first step incorporates different scenarios so that you’re ready for any problems or conflicts that might arise on your route. Your map should include a plan for how to make a profit. What can you do today, this week, this month to start improving your business’ quality of profit ratio? That is the point of a business map.
Lastly, you’ll need to understand the financials through and through. If you want to run your own business or startup you, not someone you hire, need to understand every financial part of the business. Running a business and staying in business relies on being profitable. If you don’t know your numbers you are just setting up yourself for failure. You wouldn’t fly a plane without knowing how to read the gauges, and the same applies to business. If you can’t tell if you’re making or losing money, you don’t understand the controls. So, understand the financials so you don’t crash your business.
If you can find a product or service that drives and interests you, follow a strong business map, and understand all of the financials of your business becoming profitable won’t be an issue. Do these things and your business will be in good hands
Becoming Profitable
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If you want to run your own business or if you have just launched your start up this article is for you. Today we are going to go over the best ways to take your young business and make it profitable as soon as possible. What does becoming profitable mean? In short, it means that your business generates a profit rather than a loss. A profit occurs when you generate more income than you spend. So, what are the best business practices to accomplish that?
First, you’ll have to come up with your product or service. When coming up with your product or service, the best thing to choose is something that you have an interest in. You need to center your business around products or services that you truly enjoy learning about. Stay within your area of interest and understanding or ‘circle of competence’. Remember, if you can sell someone of your why you can sell any product or service.
Next, you’ll need to have a business map or strategy. You won’t be able to get where you’re going if you don’t have an outlined path. How do you get from point A to point B? This first step incorporates different scenarios so that you’re ready for any problems or conflicts that might arise on your route. Your map should include a plan for how to make a profit. What can you do today, this week, this month to start improving your business’ quality of profit ratio? That is the point of a business map.
Lastly, you’ll need to understand the financials through and through. If you want to run your own business or startup you, not someone you hire, need to understand every financial part of the business. Running a business and staying in business relies on being profitable. If you don’t know your numbers you are just setting up yourself for failure. You wouldn’t fly a plane without knowing how to read the gauges, and the same applies to business. If you can’t tell if you’re making or losing money, you don’t understand the controls. So, understand the financials so you don’t crash your business.
If you can find a product or service that drives and interests you, follow a strong business map, and understand all of the financials of your business becoming profitable won’t be an issue. Do these things and your business will be in good hands
Assessing Your Competitive Advantage
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If you’re looking to start your own business, importing and/or exporting might be an option for you. However, before you jump the gun one thing you need to determine is what makes your business better than the competition. What is your competitive advantage? Today we are going to give you tips on how to find your competitive advantage and how to use it properly.
One of the most impactful things you can do is talk to your customers. Both your existing customers and prospective customers. Customer feedback offers a wealth of information that will help you understand your current positioning in the market and industry as a whole. They will give you insights into potential new offerings and could very well give you the answer you’re looking for: what your competitive advantage should be.
Another thing you can do is perform a competitive audit. Marketing audits track the marketing tactics your competitors use. Does your competitor publish content marketing? Do they use Google Adwords? What social media channels do they post to and are they affective? Take tactics that work and implement them into your business. The ones that don’t work, make them better and use them to your advantage.
Lastly, once you’ve found your competitive advantage, don’t make it a secret! Communicate your advantage to your customers and make sure it is backed by proven facts. This is called a value proposition and will become the defining statement of your company. The goal is to not only hook your customers on your value proposition but to also engage in a “tell me more” conversation.
Nailing your competitive advantage is only one of the critical elements in a strategic business plan but one of the most important. The competitive advantage is what can make or break your business so invest time in figuring out what the right answer is before doing anything else.
Navigating Duty Drawback
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The war in Ukraine continues to impact the global economy as changes in other countries are beginning to happen. For example, recently we have seen a global food crisis as Russia is blocking vital fertilizer exports that are needed by farmers elsewhere. This restriction then caused China and its firms to stop selling fertilizer to other countries in order to preserve supplies at home. Because China is a massive producer, consumer, and trader of thousands of essential goods across the globe (like fertilizer), the impact of such restrictions are being felt everywhere.
Steel is another example. China is a huge supplier of steel and they were once accused of generating overcapacity, with its low-priced exports forcing steelmakers out of business in the United States and Europe. Now, China is imposing export restrictions on steel which has triggered higher prices worldwide and has added more unwelcome pressures to inflation. China Steel Corp., the nation’s largest steelmaker, said at the end of Q1 that they were raising steel prices 5.83% on average for shipments in Q2 to reflect the cost hikes caused by economic sanctions against Russia.
Fertilizer and steel are only two goods where we have seen big changes. Step away from actual products and we still have problems like supply chain issues and global logistics. There are still not enough people to help unload the docs. Import and export businesses are struggling to get in and out of Russia and Ukraine. Everything from actual goods to worldwide logistics has been negatively impacted by the war.
All countries will continue to feel the lasting impact by this war and unfortunately the longer the war goes, the harder it will be to recover. For more information on the war in Ukraine stay updated here on our monthly blog.
Importing and exporting between nations is complex. It is very time-consuming and requires expertise to ensure your business maintains profit margins, complies with international regulations, and fulfills customer demands efficiently. As you may know, there are costs of customs duties. What you may not know is how to navigate what is known as duty drawback. Duty drawback is an opportunity for reimbursement on customs duties and taxes. Today we are going to go over a few of the best things you can do to navigate and maximize your duty drawback.
There are many forms that will need to be filled out to start the duty drawback process. A few examples include proof of duties paid, an entry summary, the proof of import, and the proof of export. Forms such as these can stack up and often get lost. The best thing you can do is get organized and stay organized. Maintaining organized and complete records is essential to getting your money back. If you want to apply for duty drawback and maximize the amount you get, make record-keeping your number one priority.
Another thing you should know is that legally, only the exporting company of record is entitled to receive the drawback. As an exporter, you can endorse the drawback rights back to the manufacturer if you are two separate entities.
Lastly, do not bank on getting your drawback right away. Once your drawback claim is under CBP review, it can take several years before everything is complete. You can receive money faster by getting pre-approval from the CBP through the accelerated payment program and this will allow you to get your money back in as little as a few weeks but just remember that duty drawback is not a process with a quick turnaround time.
There is so much to know about duty drawback that it can be tough to navigate. Use these tips to help get you started and if you have any more questions please reach out to the experts here at Duty Calc. We are here to help.
Impact Of The War
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The war in Ukraine continues to impact the global economy as changes in other countries are beginning to happen. For example, recently we have seen a global food crisis as Russia is blocking vital fertilizer exports that are needed by farmers elsewhere. This restriction then caused China and its firms to stop selling fertilizer to other countries in order to preserve supplies at home. Because China is a massive producer, consumer, and trader of thousands of essential goods across the globe (like fertilizer), the impact of such restrictions are being felt everywhere.
Steel is another example. China is a huge supplier of steel and they were once accused of generating overcapacity, with its low-priced exports forcing steelmakers out of business in the United States and Europe. Now, China is imposing export restrictions on steel which has triggered higher prices worldwide and has added more unwelcome pressures to inflation. China Steel Corp., the nation’s largest steelmaker, said at the end of Q1 that they were raising steel prices 5.83% on average for shipments in Q2 to reflect the cost hikes caused by economic sanctions against Russia.
Fertilizer and steel are only two goods where we have seen big changes. Step away from actual products and we still have problems like supply chain issues and global logistics. There are still not enough people to help unload the docs. Import and export businesses are struggling to get in and out of Russia and Ukraine. Everything from actual goods to worldwide logistics has been negatively impacted by the war.
All countries will continue to feel the lasting impact by this war and unfortunately the longer the war goes, the harder it will be to recover. For more information on the war in Ukraine stay updated here on our monthly blog.
Increasing Fuel Costs Continue
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From high tech companies like Apple and Samsung to local mom and pop shops, everyone continues to struggle with sourcing product. The COVID-19 pandemic started it and the conflicts between Ukraine and Russia only made things more difficult. Things like increased shipping costs and freight shortages play a role in the global supply chain struggle.
We have all seen the gas prices recently and unfortunately it is not looking like they will be going down any time soon. The national average for a gallon of gas is now over $4.25 according to AAA. Some experts say that we might see a slight decline after May but the national average is still expected to remain over $4 until the end of the year. Not only is it more expensive to fill up your car’s gas tank but that also means it is more expensive to fill up freight trucks and air cargo jets.
Climbing oil prices translate directly to higher diesel prices. The United States diesel prices are up significantly from last year and are expected to go higher as sanctions are mounted against Russia, the third-largest oil producer in the world. Higher fuel costs from climbing oil prices caused by the hostilities will continue to be felt by shippers across the globe. Ocean carriers who continue to serve ports in the region have introduced War Risk Surcharges for these shipments. This translates to an additional $40-$50/TEU. Similar to gasoline prices, while a temporary dip in available supply of exports could explain the slight easing in freight costs, all signs point to continued elevated volumes in the coming months.
Expect prices to continue to increase and when they do decrease it will be very minimal. Hopefully by the beginning of next year we will see prices return back to what they once were.
International Trade With Russia
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Russia invaded Ukraine about a month ago and since then the U.S. and allies have pursued a series of economic sanctions against Russia in retaliation for the invasion. On Friday March 11, President Biden said that the U.S. and other G-7 nations will deny Russia from a favored nation status. This meaning that the U.S. and allies will revoke Russia’s most-favored nation trade status. How will this impact the U.S.? Today we will break down some of the numbers.
According to the Census Bureau, Russia was the U.S.’ 23rd largest trading partner, totaling $36.1 billion in two-way goods trade in 2021. $29.1 billion of which account for Russian products into the U.S.
60% of what the U.S. imports from Russia is in energy, including oil, coal, and natural. In 2021 the U.S. imported an average of 209,000 barrels per day of crude oil from Russia. Russian oil accounts for about 3% of what the U.S. imports each year, but that is still enough of a jump to drive up gasoline prices for all of us.
Energy aside, other goods imported from Russia will see an increase as well if they have not already. The move to revoke Russia’s most-favored nation trade status will cause the U.S. tariff rate on Russia caviar to jump from 15% to 30% and levies on plywood will increase from 0 to 30%, according to the Wall Street Journal. Vodka will also be subject to a tariff of $1.78 per liter.
As the war continues the U.S. and allies will continue to do what they can to support Ukraine, even if it is just an economic blow. However, doing so will likely lead to more inflation not just in the U.S. but globally.
For more information on import and export news please stay tuned here on our monthly blog.
