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Surprise or Shock? Managing Trade in a World of Change

By Paul Vandevert, Principal,
OCHIM Trade Law PLC.

We all know the axiom “Things change; they never stay the same.”  But, as we go about our daily lives, we seem to forget it or even wish it not to be true.  That can be a problem for importers and their service providers, particularly in a time when many aspects of trade are changing, such as dramatically increased tariffs on many goods, some of which had been duty free for years.  In order for importers to stay compliant and/or not miss a duty savings opportunity, it’s critical for Customs brokers and trade services providers to check in with their importer clients and do a thorough review of what they’re importing today. 

Here’s a checklist of topics to cover:

What is your client importing now?  While it may seem that a client’s business is the same as it has been for the past 17 years, advances in technology and changing market conditions have caused profound shifts in what many companies are importing.  For example, a supplier in the automotive industry made parts that historically were entirely mechanical.  Imported inputs were generally metal castings or parts.  Today, however, while the end product from this supplier still has the same name, what was mechanical is now electronic.  Where the supplier used to import metal products, now most imports are electrical, such as circuit boards and switches.  Meet with your importer client in person and look at physical samples of what they’re importing today.  There could be a few surprises!

How has the supply chain and manufacturing process evolved?  Globalization has made the manufacturing process both more complex and geographically dispersed.  Manufacturers used to make a finished product in one place with all of the inputs acquired and collected at that one location.  Today, however, final assembly entails both individual parts and subassemblies or complex components produced at foreign intermediate locations before reaching the final assembly site.  A key component may still be sourced from China, but now is shipped to Mexico where it’s incorporated into a subassembly with other parts before being shipped to the United States.  The subassembly from Mexico is likely, although not certainly, to have a different country of origin and different tariff classification than the key component from China.  Filing an entry based on what the importer used to do which may not be anything like what the import is today is not the kind of surprise either importer or service provider wants to experience!

In today’s world, communication between the importer and service provider is key, but the conversation may have to be initiated by the service provider.  Most importers are not going to keep up to date on changes to the tariff schedule.  Many importers will not realize the significance of changing what they import, especially if they believe they’ve stayed in the same general line of business.  Keeping current in the world of trade will let importer and service provider alike enjoy the wonder of change and avoid the shock.

Paul Vandevert founded OCHIM Trade Law in 2018, after serving for more than 23 years as in-house trade counsel at Ford and GM.  OCHIM Trade Law’s mission is to apply Paul’s 30+ years of knowledge and experience in all aspects of international trade and Customs law to deliver practical, strategic solutions to importing and exporting firms of all sizes. He can be reached at 313-737-3675 or 

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