China Trade Policy
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President Biden took office in January and has yet to show any real progress in the trade war with China. Many United States companies want the Biden Administration to drop tariffs on Chinese goods and provide clarity about the current relationship with China. The relationship between the United States and China is still hurting from the last administration and companies are looking for President Biden to fix it as it has been nine months since he took office.
A New York Times article by Thomas Kaplan and Alan Rappeport reminds us that in June, Biden issued an executive order adding more Chinese companies to a prohibition on American investments in Chinese firms that have links to the country’s military or that sell surveillance technology used to repress dissent or religious minorities. In July, Biden expanded the list of Chinese officials under sanctions by the United States for their role in undermining Hong Kong’s democratic institutions. That being said President Biden and his top advisers have yet to elucidate how they view economic relations with Beijing, saying they will make the administration’s approach known once a broad review of China trade policy concludes.
The problem with this is that businesses do not want to wait around. The United States’ trade relationship with China is one of the largest in the world, economically, and companies are getting impatient. Businesses have been waiting for Biden to change course from Trump’s trade policies and are losing money with tariffs in place. Businesses are being forced to borrow more from banks and having to pass along costs of import duties to their customers. The impact these tariffs have are causing major financial hardships across the entire business supply chain and Biden is in the driver’s seat and needs to make some adjustments.
The trade war did not work and as promised, Biden needs to take action to help companies that are struggling. For more information on the trade war with China stay updated here on our monthly blog.
Import and Export Job Opportunities
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There is so much opportunity in the import and export industry. According to the U.S. Department of Commerce, imports account for about $1.2 trillion in goods while American companies export about $772 billion worth of goods to over one hundred countries overseas. With that said, that means that there are plenty of job opportunities in this industry. The demand is there and is not looking like it is going to slow down. Today we are going to look at three job opportunities within the import and export industry that you might want to consider!
Consider becoming a product sourcing agent. A product sourcing agent conveniently plugs into the export value chain. It requires little financial investment to start and does not require previous experience in the field to get started. This job entails constantly making contact and maintaining relationships with exporters. You will deal with farmers, local buying agents, and commodity merchants.
Another area you can consider is becoming an import and export broker. A trade agent or customs broker is someone who sends and receives goods to and from different countries. You will work with both importers and exporters by helping them prepare necessary documents for moving their products. This job requires working with clients and establishing connections in foreign companies.
If you are specialized in a certain industry, you can go overseas and ask to be a manufacturer representative. You will have the edge because you are the expert in the industry or a certain market. Foreign companies are constantly looking for experts to market their product in countries with a lot of potential opportunity. This might require a lot of travel and regional work but it is a job that is rewarding and fun at the same time.
If the import and export industry is one that interests you consider these job opportunities as there is high demand for workers during this time!
For more information on the import and export industry please reach out to us here at Duty Calc.
Strong June Long Beach
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The Port of Long Beach is the second-busiest container port in the United States and it is a major gateway for US-Asian trade. It was ranked as the number one container port in the Western Hemisphere (2000-2020) and handled 9.2 million twenty-foot equivalent units (TEUs) in 2020. However, during the pandemic we saw the Port of Long Beach back up and slow down significantly. Now that the country has opened back up we are seeing that consumers are warming back up in terms of spending. Just in time for summertime recreation and entertainment.
According to DC Velocity cargo volume through the Port of Long Beach rose 20% year-over-year in June. As mentioned before this is due to the strong and increasing e-commerce activity. The port moved 724,297 TEUs during the month of June, with imports rising nearly 19% and exports relatively flat. Empty containers moved through the port jumped 36% to 250,249 TEUs.
Experts anticipate that this busy summer will drive much of the cargo movement through the rest of this year. Long Beach Harbor Commission President Frank Colonna said, “We’re optimistic that this is shaping up to be one of our business years on record as we continue to overcome the challenges related to COVID-19. We will continue to collaborate with our waterfront workers and industry partners to move cargo quickly and efficiently through the supply chain during this time of ongoing economic recovery.”
If there is a lot of activity going on at the Port of Long Beach that is a good sign for our economy. If the port is doing well the economy is doing well. Hopefully, this rising activity and increased movement at the ports continues as the summer progresses.
For more information on the import and export industry stay updated here on our monthly blog!
Importing and Exporting Done Right: Part 2
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A couple of months ago we outlined some helpful tips on how to import and export the right way. Today we are going to continue that conversation by giving you three more tips. Let us get started!
Having the right logistics strategy and even making changes can yield savings on tariffs. For example, Donald Hoffman who is the president of Harmony Logistics Group in Oakdale, New York, and chairman of the Long Island Import Export Association (LIIEA) once helped a company that used to move product from Morocco to France for repackaging, and then shipped it to the U.S. This logistics move helped save the company a lot of money because they took advantage of the Morocco Free Trade Agreement. This agreement allowed the company to direct-ship their product from Morocco and come in duty-free. This logistics strategy seemed like a big move at the time but ended up helping the company save a good amount of money.
In addition to this, creating a formal operation run by an expert is crucial to having success whether you are an importer or exporter. You must develop a formal program to manage functions, with written policies and processes. Ideally, a company that imports or exports significant volumes will put a staff member in charge of meeting all applicable tax and regulatory obligations, even when the company also uses a customs broker or other provider. The last thing you want is to lose money because a product was misclassified, someone failed to file a declaration, or because a product was exported to a person on the U.S. government’s denied parties list. Put someone in charge of the operation to avoid such problems.
The third thing you can do to put yourself in the best position in this industry is to understand requirements on both sides of the border. There are different regulations in terms of time frames, hours of service, and ways that you can load freight into certain types of equipment. For example, if you are exporting to Mexico, you will need a government-authorized trading partner south of the border. Not every company in Mexico can legally import cargo. Similarly, if you are exporting to Mexico from the U.S. you must be carful about where in Mexico you plan to ship. This is because big cities might have the industrial parks with sufficient infrastructure to receive all kinds of shipments. However, some less-developed areas, tractor-trailers sometimes require special permits. If you understand rules on both sides of the border you will be fine. It is just a matter of doing your homework.
Use these tips to help you nail importing and exporting. It can be a hard and daunting task to get everything in place but if you do it right you can have great success. For more information on importing and exporting stay updated here on our monthly blog.
Importing and Exporting Done Right
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The import and export industry is huge. There is so much to learn and understand especially if you are new. If you want to get into this booming industry but do not know where to start, you are in luck. Today we are going to give you some helpful tips on how to import and export the right way.
The first thing you need to do is get into the habit of staying updated on industry news. Monitor rule, tariff, and status changes. For example, keep an eye on overseas suppliers in case they make changes that affect your tariff obligations. Similarly, watch for tariffs themselves, in government regulations, and in the status of customers. A good example of this is what happened when the U.K. officially left the EU at the end of last year. This move changed the industry drastically. So, stay updated and keep your eye on international news because one single move could influence the entire industry.
The second thing you need to learn is how to leverage programs that reduce tariffs. Gaining a tariff advantage is not an easy task as it requires initial vetting and having appropriate controls in place with the foreign supplier. However, doing so could save you a lot of money. For example, even when a product is made in a country with good tariff opportunities, it might not qualify if the manufacturer imported some of its components. Also, a product that meets the bar for tariff advantages today might not qualify tomorrow if your supplier starts to buy materials in another country. Be careful and be proactive in leveraging programs that help you stay away from those high-tariff loopholes.
Lastly, pay attention to design. A products design can influence tariff obligations just as much as its origin. For example, whether a jacket is lined or not lined, or has zippers or stitches, could impact the tariff. Depending on the case, it could cost less in tariffs to import components and assemble them in the U.S. than to import the finished product. Think strategically when it comes to design and you could save your company loads of money.
There is so much to know about the import and export business. These three tips are only the tip of the iceberg. For more tips and information stay updated here on our monthly blog.
Duty Drawback 101
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If you are new to the import and export business then it can be hard to understand what duty drawback is. Duty drawback is similar to how you are refunded sales tax when you return an item to a store. You essentially claim a duty refund when you export an item that was previously imported. It is a refund of duties, fees and taxes paid on goods imported into the U.S. that are subsequently exported from the U.S. With that said there are three major types of drawback. Unused merchandise drawback, manufacturing drawback, and rejected merchandise drawback.
Unused merchandise duty drawback is when you import something and then export it in the same, unused condition. For example, you import 50 generators paying Customs duties of $500 or $10 per generator. You come to realize that you only need 30 generators and you want to export the remaining 20 to a foreign customer. The unused merchandise can then be exported and you will qualify for a refund for the duty you originally paid.
Manufacturing drawback is slightly different. This type of drawback applies when you import an item that is then manufactured into a different item. For example, if you imported bicycle tires and export finished bicycles, then you can get the duty you paid for the bicycle tires refunded when you export the finished product.
Rejected merchandise drawback is when imported merchandise does not conform to sample or specifications, shipped without consent, or determined to be defective at the time of import. For example, if one of those generators or a few of those bicycle tires arrive in bad condition or are simply the wrong model that you ordered then you qualify for rejected merchandise drawback. You qualify to get a duty refund on all of the defective products.
Understanding duty drawback can be challenging especially if you are new to the import and export industry. If you have any questions please do not hesitate to reach out to us here at DutyCalc.
Reinstated Tariff on Aluminum
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In March of 2018, former President Donald Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from a variety of countries, including the United Arab Emirates (UAE). On his final day in office Trump lifted the aluminum tariff. However, that did not last long as on February 1, current President Joe Biden reinstated the 10 percent aluminum tariff on imports from the UAE. As predicted by experts that covered the Biden administration this reinstatement is no surprise.
The reinstatement suggests that it is unlikely that the Biden administration will remove that aluminum tariffs imposed by the Trump administration. In a statement regarding the issue Biden said, “In my view, the available evidence indicates that imports from the UAE may still displace domestic production, and thereby threaten to impair our national security.” Union workers applauded Bidens move saying that Trump’s plan to lift tariffs on imports from the UAE would undermine the effectiveness of the program and essentially exempt the vast majority of aluminum imports. That being said, not everybody is happy with Biden’s reinstatement. Sure, union workers are all for it but manufacturers across the country are left disappointed.
These tariffs have sparked an outcry from downstream American industries that use steel and aluminum to make products like cars, boats, recreational vehicles, and cans. With the new tariff in place, it will increase costs for these manufacturers and narrow their profit margins making it even more difficult for their products to compete on the global market. The reinstated tariff on aluminum is one of Biden’s first big moves as the new president of the United States. What Biden will do going forward regarding imports and exports as a whole is not particularly clear but he has indicated that things will not change all that much. For the latest updates on import and export news stay updated here on our monthly blog.
