Tariff Guide in Dynamic Times
Amidst the new turbulence surrounding international trade and the role tariffs play, this article aims to provides a resource in dynamic times and a follow up on our recent blog article on tariff engineering.
If your business relies on imported goods—from raw materials to finished products—it’s essential to reassess your tariff exposure immediately. Since November 2024, the Trump administration has significantly expanded tariffs affecting major U.S. trade partners.
This includes new or increased tariffs targeting worldwide imports as well as global counter tariffs against the US’ erratic tariffing actions. Further, the tariffs are flanked by regulatory enforcement by the U.S. Customs and Border Protection (“CBP”) has intensified, emphasizing documentation accuracy, tariff classification, and valuation compliance.
As we write and post this, this may, however, already have changed and likely will change in the near future. Here is a bulletin to keep you updated on the dynamic situation. This blog article is intended to provide a reminder on how to navigate this dynamic landscape.
Customs Enforcement and Regulatory Guidance
CBP is actively increasing enforcement efforts, prioritizing rigorous reviews of tariff classifications, origin documentation, and valuations. The January 2025 Harmonized Tariff Schedule (HTS) revisions introduced new classifications and duty rates affecting electronics, automotive components, and consumer goods, increasing compliance complexity. Importers using outdated classifications may face costly penalties and enforcement scrutiny.
To mitigate risks, businesses should:
- Conduct comprehensive classification reviews to align with current HTS guidelines.
- Verify valuation methods, ensuring proper documentation and exclusion of non-dutiable charges.
- Maintain thorough origin documentation to validate eligibility for preferential tariff treatments. When uncertain, seek binding CBP rulings to confirm tariff classifications or FTA eligibility.
Practical Implications for Businesses
With the tariff landscape rapidly evolving, the cost of delay is significant. Even indirect exposure through suppliers or logistics providers demands immediate attention. Companies should strategically reassess tariff classifications, sourcing geography, and eligibility for FTA benefits such as USMCA or KORUS. Minor adjustments in product design or sourcing location can lawfully produce substantial duty savings.
Businesses must conduct proactive risk assessments to pinpoint supply chain vulnerabilities by supplier, product, or geographic origin. Collaboration with suppliers and logistics providers is critical to maintaining alignment and preventing unexpected cost escalations. Expert customs advisory support is recommended to navigate tariff classification, valuation, and strategic sourcing complexities effectively.
Strategic Business Analysis
In light of recent tariff policy changes by the Trump administration, businesses engaged in international trade must adopt proactive strategies to ensure compliance, minimize risks, and leverage opportunities arising from the evolving customs landscape. The recommendations below provide practical, high-level guidance from a legal compliance and risk mitigation perspective, tailored specifically to the complexities of the current tariff environment.
Proactive Compliance and Risk Management Strategies
Given increased CBP enforcement activities, businesses should prioritize compliance and risk management through the following best practices:
- Enhanced Customs Compliance Programs:
Companies should actively update their compliance programs , including clearly documented internal policies addressing tariff classifications, valuations, and preferential treatment claims. Importers are encouraged by CBP to conduct regular internal audits and provide ongoing training for key personnel involved in customs transactions. - Strategic Use of Customs Rulings:
Businesses should utilize CBP's binding ruling system to achieve certainty regarding the classification, valuation, and origin of imported goods. Obtaining binding rulings from CBP provides clarity and reduces exposure to potential tariff liabilities and penalties. - Transparent Record-Keeping Practices:
In the current regulatory environment, CBP emphasizes meticulous record-keeping practices. Importers should maintain comprehensive documentation supporting customs declarations, origin certifications, and tariff classifications to minimize penalties during audits and enforcement proceedings.
Effective tariff engineering strategies allow businesses to legitimately minimize import costs by utilizing existing tariff provisions and free-trade mechanisms:
- Leveraging Free Trade Agreements (FTAs):
Companies should evaluate and restructure their sourcing and manufacturing operations strategically to qualify for preferential tariff treatment under updated FTAs (e.g., USMCA, KORUS, and U.S.-Singapore FTA). Legal guidance underscores the importance of adhering strictly to rules-of-origin requirements, as violations can result in penalties and loss of FTA benefits. - Strategic Product Classification and Modification:
Businesses can employ strategic tariff classification practices, known as tariff engineering, to lawfully alter product attributes, allowing imports to qualify for more favorable HTS classifications. According to legal practitioners, proactive review of tariff schedules combined with minor product modifications can significantly reduce tariff exposure without triggering enforcement risks.
To minimize exposure to tariff volatility and geopolitical risks, businesses should actively pursue diversification and risk mitigation through:
- Geographical Diversification:
Reducing dependency on a single country or region by diversifying sourcing and manufacturing locations helps businesses mitigate risks associated with targeted tariff actions. Legal experts recommend companies regularly assess geopolitical trade dynamics, identifying viable alternatives in tariff-friendly jurisdictions such as Vietnam, Mexico (for certain goods), and ASEAN member states. - Alternative Sourcing and Production Networks:
Businesses should explore alternative suppliers and manufacturing partnerships, leveraging regional trade agreements or duty-free zones. Establishing manufacturing or assembly operations in regions covered by favorable trade agreements can significantly lower tariff burdens and provide stability during volatile tariff periods.
On April 2, 2025, President Donald Trump announced a sweeping escalation in U.S. trade policy, declaring a national economic emergency and implementing a baseline 10% tariff on all imports, regardless of origin. This universal tariff, set to take effect on April 5, marks a significant departure from prior country- or product-specific strategies and applies across all sectors. In parallel, the administration introduced “reciprocal tariffs” on dozens of countries with significant trade surpluses with the U.S., including an additional 34% tariff on Chinese goods, raising total duties on some items to 54%. This universal tariff in part requires a different approach to our commonly recommended course of action.
What This Means for Your Business
These developments present new and immediate cost pressures—especially for companies with global supply chains or high import volume. The universal tariff affects even low-risk categories, meaning previous exemptions or strategic sourcing zones may no longer offer relief. Industries such as electronics, automotive, apparel, and food services are expected to see cost volatility, inventory disruptions, and delivery delays. With retaliatory measures now being floated by several countries, U.S. exporters may also face increasing friction abroad.
Businesses should reassess how these new tariffs interact with existing trade programs, as many free trade agreements may no longer shield goods from additional duties. Importers relying on prior classifications or valuation methods should expect heightened scrutiny, especially as CBP ramps up enforcement. Exporters, meanwhile, should be alert to retaliation risk in key markets and consider whether current sales contracts, licensing structures, or distribution channels remain viable under escalating foreign countermeasures.
Recommended Strategies Now
- Update your tariff exposure map: Recalculate landed costs under the new 10% universal tariff and any applicable reciprocal duties. Use the Harmonized Tariff Schedule and cross-reference affected SKUs and suppliers.
- Review customs classifications and valuation methods: The broad scope of these tariffs makes documentation accuracy even more critical. If you're unsure about eligibility or coding, consider seeking a binding ruling from CBP.
- Renegotiate contract terms: Force majeure, change-in-law, or tariff passthrough provisions may now be triggered. Align with vendors and logistics providers on cost-sharing and contingency options.
- Explore sourcing alternatives: Countries not yet affected—or benefiting from bilateral agreements—may become more competitive. Regions such as Southeast Asia and Latin America are expected to see increased attention.
- Plan for retaliation risk: If you're exporting to targeted countries (especially in tech, agriculture, or heavy industry), monitor foreign tariff announcements closely and build flexibility into your sales contracts.
As with prior tariff waves, early preparation and a coordinated compliance strategy are key to minimizing business disruption. Stay informed, engage counsel, and adjust fast—because tariff regimes are changing faster than ever.
Authors: Spencer Viator and Daniel Koburger
