If your company sources materials, parts, or products from outside the United States, you’re probably already tracking the latest on tariffs—and if you’re feeling overwhelmed by the constant updates, you’re not alone. Keeping up with shifting policies can feel like a full-time job.
Fortunately, resources like Reed Smith’s Trade Compliance Hub are monitoring these developments in real-time.
Tariffs are taxes imposed on goods imported into the U.S., paid by the Importer of Record (IOR) to U.S. Customs and Border Protection (CBP). If your company is the IOR, you’re responsible for paying these duties directly. As tariffs evolve, understanding their impact on your cost structure is critical. Learn more from Investopedia.
Many manufacturers already designate someone to lead on customs and international trade issues—and if you haven’t, now’s the time. A Global Trade Manager (GTM) oversees the flow of goods across borders and helps your company respond quickly to political changes, shifting tariffs, and compliance requirements. They play a vital role in mitigating risk and protecting your margins. Learn more about the GTM role.
A licensed Customs Broker can help your team navigate the complex rules and paperwork that come with importing goods. While fees are typically charged per shipment, the value they provide goes far beyond cost—they help you avoid costly delays and compliance issues. Be sure to evaluate brokers based on their experience, responsiveness, and fit with your company’s needs. Tips on choosing a broker from Atlantic Project Cargo.
The ACE Secure Data Portal is a powerful tool that lets you track your import/export history, including HTS codes, supplier information, country of origin, and duties paid. When applying, request both Importer and Exporter access so you have a complete picture of your global trade data. This information is essential when assessing tariff impact and exploring mitigation strategies.
Every imported product must be assigned a Harmonized Tariff Schedule (HTS) code—a 10-digit identifier used to calculate duty rates. The first six digits are universal across countries, while the final four vary. Misclassification can lead to overpayment or compliance issues. Your ERP
system should maintain an updated Part Master with accurate HTS codes. The Global Trade Manager or their team should regularly audit this data. Learn how to read the HTS.
Once you’ve reviewed your import data and classifications, it’s time to consider mitigation strategies:
Can you shift to a domestic supplier? While domestic goods may carry higher unit costs, you may benefit from shorter lead times, reduced shipping risk, and lower inventory carrying costs. Make sure your procurement team evaluates total cost of ownership, not just price.
If your company imports goods (or components), uses them in manufacturing, and then exports the finished product—you may qualify for Duty Drawback. This program reimburses up to 99% of duties paid on re-exported goods. It’s a technical process that often requires support from a specialized firm. Explore options with Charter Brokerage.
This approach involves redesigning a product to qualify for a lower duty rate—for example, adjusting the materials used or how it’s assembled. Marvel famously reclassified its action figures to reduce tariff rates from 12% to 6.8%. Even Santa suits are tariff-sensitive: with Velcro, they’re classified as duty-free “festive wear,” but with zippers, they’re taxed as clothing. Read more from NPR and Shapiro’s guide to tariff engineering.
If you’re considering tariff engineering, it may be worth requesting a formal ruling from CBP. You can search past rulings in the CROSS system.
Catalyst Connection is here to help manufacturers across southwestern Pennsylvania navigate global trade and develop smart strategies to manage costs. If you’re looking to set up an ACE account, explore Duty Drawback, or review opportunities for tariff engineering, reach out to our team.
Stay tuned for our upcoming white paper with a deeper dive into these topics—and as always, we’re here to grow manufacturing.