Have rising tariff costs impacted your business operations? Does the complexity of customs regulations leave you perplexed? Ben Bidwell, North American Customs Compliance Director at global logistics leader C.H. Robinson, sheds light on hidden opportunities within tariff policies that could enhance competitiveness through strategic refund claims.
The Refund Windfall: Are You Capitalizing?
Following the expiration of all tariff exclusions last year, the U.S. Trade Representative (USTR) solicited public comments regarding potential reinstatements. After extensive deliberation, USTR ultimately reinstated 352 exclusions, effective through December 2022 with retroactive application to October 21, 2021. This creates a significant opportunity: importers of qualifying products not only avoid Section 301 tariffs through 2022 but may also claim refunds for duties paid since October 2021.
Bidwell observes that many businesses remain unaware of this refund potential. One C.H. Robinson client stands to recover nearly $20 million in refunds, with others eligible for seven-figure reimbursements.
Streamlining Compliance Through Technology
C.H. Robinson has developed a specialized U.S. tariff search tool enabling shippers and importers to efficiently verify eligibility. Users simply input relevant tariff codes to determine exclusion qualifications and access precise exemption language for refund evaluation.
The company actively communicates these opportunities through its trade portal, conducting comprehensive reviews for clients. However, market awareness remains surprisingly low regarding this substantial financial potential.
The Future of U.S.-China Tariffs
Amid ongoing discussions about potential tariff reductions, Bidwell characterizes the current environment as a "wait-and-see" period. The U.S. government is conducting a mandatory four-year review of Section 301 tariffs, assessing their effectiveness and economic impact.
Three potential outcomes emerge from this review:
1. Full Elimination: Complete termination of tariffs deemed no longer necessary.
2. Status Quo: Continuation of existing tariff structures.
3. Modified Framework: Retention of tariffs with new exclusion processes or reinstated exemption provisions.
Exemption qualifications typically follow public comment periods where businesses submit product-specific justifications. Approved exemptions apply industry-wide rather than to individual importers.
The Ripple Effects of Tariffs
Since implementation in March 2017, tariffs have profoundly influenced U.S. business operations and supply chains. The National Retail Federation maintains that tariffs essentially function as additional business taxes.
Bidwell notes an unexpected consequence: enhanced focus on customs considerations during strategic planning. Previously overlooked—particularly by small and mid-sized shippers—customs implications now receive earlier evaluation in operational decisions.
U.S. Customs and Border Protection data confirms this shift, with collected duties soaring from $35 billion in fiscal 2017 to $85 billion in 2021—more than doubling within five years.
Production Relocation Challenges
While some manufacturers considered relocating operations to countries like Vietnam or Malaysia to circumvent tariffs, Bidwell observes limited actual transitions due to the substantial investments required for such moves.
Assessing Tariff Effectiveness
With tariff revenues dramatically increased, questions persist about whether original policy objectives have been achieved. Bidwell suggests the ongoing review will provide critical insights, though its conclusion timeline remains uncertain.