A Breakdown of Tariffs and How they Can Affect your Business
Tariffs are taxes placed on imported goods. The purpose is to affect the flow of goods into the country. Tariffs increase the price of the goods in the domestic market, and domestic producers benefit due to higher prices.
There’s been a lot of discussion lately around tariffs, but what does this mean for your business?
What are tariffs?
Tariffs are taxes placed on imported goods. The purpose is to affect the flow of goods into the country. Tariffs increase the price of the goods in the domestic market, and domestic producers benefit due to higher prices.
How do they work?
Tariffs are based on the product and the country in which it was produced (COO- Country of Origin). It is NOT based on the product ship from country. Additionally, just because a product is assembled in a given country does not mean that is the country of origin.
Goods whose parts originate from different countries will originate from the country where the finished part underwent its last substantial transformation.
A transformation is defined by
- Resulting in a new and different product
- Different from its components
- Having a distinctive name, character or use
The product is identified by the Harmonized Tariff Code (HTS).
How do Harmonized Tariff Codes(HTC) work?
HTS is the basis for all trade compliance activity. Determination is a specialty requiring knowledge of materials and their use, and requires collaboration with engineers.
What is the Difference Between Components and a Finished Good?
For More Information:
US International Trade Commission
Tariff Impacts on NEMA Scope June 21
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