Geopolitical, economic, and social forces are changing global trade and customs. Trade tensions, protectionism, and technology concerns are affecting trade relationships. Ecommerce, just-in-time-delivery, and complex production chains have impacted trade flows. In this webinar, Daniel Kiselbach and Louis Amato-Gauci provide guidance on developments that could have significant implications for your business, including:

  1. US import tariffs (i.e., customs duties). The new US Trump Administration may bring about significant changes, including increased tariffs on imported goods. These changes may be imposed by way of an Executive Order or with Congressional approval. Countries considered high-risk from an increased US tariff standpoint include Canada, China, the EU, and Mexico. Increased US tariffs may disrupt supply chains, create uncertain business conditions, and strain trade relationships. Businesses are now scenario planning and considering potential options for dealing with increased US tariffs.
  2. Retaliatory measures targeting US goods. The imposition of increased US tariffs could result in widespread retaliatory measures. Canada, China, the EU, and Mexico could take various steps to target US exports, complicating supply networks, and increasing duty costs. Canadian retaliatory countermeasures may include surtaxes on specified goods. The result may be a general thickening of tariff and non-tariff barriers at international boundaries.
  3. Global e-commerce and de minimis thresholds. De minimis refers to a threshold under which goods may enter free of duty and import taxes, and with minimal customs review. Under CUSMA, Canada agreed to maintain a de minimis threshold of at least CAD$150.00 for customs duties, and CAD$40.00 for taxes, at the time or point of importation of goods shipped by courier from the United States or Mexico. In the US, the de minimis threshold is relatively generous at $800 USD. There have been discussions concerning potential US de minimis restrictions (i.e., reducing or eliminating the de minimis threshold).  The result could be increased duty costs and customs clearance requirements.
  4. Increased customs enforcement.  Canada has announced new security measures and the allocation of up to $1.3 billion to secure its international border. This announcement was part of a fall economic statement and appears to be designed to address concerns identified by president-elect Trump.  A focus on bolstering the Canada Border Services Agency’s capability respecting the inspections is designed to ensure that Canada is not used to illegally divert Chinese goods into the US.
  5. Risk management strategies.  Many businesses are preparing for an uncertain future by assessing their options and potential next steps. Areas of focus include: monitoring regulations, identifying which inputs and finished goods might be most at risk for tariff increases; possible contract adjustments to address tariff fluctuations; supply chain diversification; and making tariff exclusion applications.  Firms that review their circumstances now may be best able to deal with changes in the future.