Tariff Changes in 2025 - $urprises Ahead

With 14 days until a new administration fills the White House, there are still many questions as to how campaign promises will be implemented. Could it be exactly as promised with punitive tariffs imposed on all products from select countries, or will it be a more targeted approach for certain critical industries?

While other nations provide barriers to USA-made goods, either by design of high tariffs or their own economic hardships which make American products unobtainable for their markets. Certainly, the USA needs to do something, as we have been giving away our markets to ruthless foreign competition. Understandably, Americans love the lower prices. I admit that many of the clothing items I purchased during the 2024 Holiday Season, were only made possible due to lower manufacturing costs from Asia...even with a normal 16% - 27% import duty.

It has been made clear that the new administration is going to use Trade Policy as a means of pushing some very important non-trade agendas that would benefit our national security and economy. But would restricting trade with our closest North American neighbors and with a country that holds a tremendous amount of USA debt actually work?

New Tariffs will go into effect. That's a given. Maybe there will be some type of exclusion mechanism in place as there was for 301, but we have no info on that. We are all going to need to be prepared, at least in the short-terms for higher duty rates, and increased cost of goods. Our neighbors will bluster and scream, but the USA is in a power position.

If you haven't started preparing yet, it is time to get your Customs Broker to give you an extract of what you have been importing over the past year. Generally, Brokers are not set up for in-depth data analysis; they are just trying to clear your cargo and do not have the manpower to offer this service to all their clients, except for a select few. But they do keep a huge amount of data on file that is tremendously easy to extract and should be your first stop for getting your info. Hopefully, you have previously automated this process to a minimal extent by providing your commercial invoices in at least an XL format that has your SKU numbers, tariff numbers and commercial invoice cost associated. This way you can easily target your EXACT product that will be impacted. If you are not currently providing data to your broker in this format, you have cut yourself off from a huge source of excellent information and will have a hard time trying to figure out how the pending tariff increases will impact each of your individual products. Some products may be impacted more than others even with the same tariff numbers ( 301 Exclusions were examples of this. Exclusions granted were product-specific, not necessarily tariff-specific.)

If you need help to guide you through the process to take a hard look at your import program to see if you can reduce your duty-burden or have a much smoother running supply chain setting you up for future resilience when global supply chains are in chaos, reach out to me spencer@hutchinsglobal.com . I can help.