New Tariffs Bring New Headaches on Top of Higher Costs
September 24 2018 - 6:06PM
Dow Jones News
By Erica E. Phillips
As of 12:01 a.m. Monday, thousands of cargo containers stacked
on ships bound for the U.S. and pallets of Chinese products loaded
into the cargo holds of airplanes just got more expensive.
The 10% levy on the declared value of goods U.S. importers buy
from Chinese suppliers will add new complications, along with
higher costs, as buyers and sellers across trans-Pacific supply
chains complete the nuts-and-bolts of how and when the new tariffs
are handled.
Customs brokers said they were working overtime in the days
leading up to the new tariff deadline, filing entry paperwork for
shipments from China and hoping those electronic filings would be
processed before the midnight cutoff.
"This is all done electronically and has been for years," said
Marianne Rowden, president of the American Association of Exporters
and Importers. Once the tariffs go into effect, the funds are
withdrawn directly from the importer's bank account as soon as the
products enter U.S. commerce.
Customs broker A.N. Deringer Inc. handles the duty payments for
many of its customers via electronic transfer and bills the
importers later. But it has been encouraging its customers to set
up their own transfer accounts with U.S. Customs so the broker
doesn't have to front the funds.
As the U.S.-China trade dispute has heated up in recent weeks,
shippers and customs brokers have been scrambling to iron out such
details.
Ms. Rowden said shippers were working to get their goods on
ships and planes as quickly as possible before the tariffs were
imposed, and pushed their customs brokers to file the necessary
paperwork. In many cases, if the paperwork has been filed, goods
might be considered to be in U.S. commerce even before the vessels
they are traveling on have reached U.S. ports, Ms. Rowden said.
But if goods require additional screening by another government
agency -- for example, seafood products that require the U.S.
Department of Agriculture approval to clear the border -- that
could cause delays and those goods may not have made it in
time.
And it isn't just government screenings that can hold up
shipments, said Nina Luu, chief executive of supply chain software
company Shippabo. With big ocean carriers forming alliances to
consolidate shipments on larger vessels, some importers have had to
wait longer to find an available slot on a U.S.-bound ship,
possibly missing the tariff deadlines.
"It's been like, 'Wow' for everybody." Ms. Luu said.
Customs brokers say they already are looking at preparations for
the possible increase in the latest U.S. tariffs to 25% on Jan. 1,
an increase the White House has threatened if it isn't happy with
the progress of trade talks.
"With something like this coming, most companies that are
subject to it are sophisticated enough to be paying attention, and
they're going to make sure their goods get here," said Mike Lahar,
corporate compliance manager at customs broker A.N. Deringer
Inc.
Still, there are factors that can't be planned for.
One Shippabo customer had 50 containers aboard a ship that was
delayed by a typhoon in Asia last month. The goods, worth "at least
a couple million dollars," according to Ms. Luu, didn't arrive in
the U.S. until after Aug. 23, when an earlier round of U.S. tariffs
went into effect, and the shipper had to pay up.
"There's very little we can do," Ms. Luu said. "It's typhoon
season."
Write to Erica E. Phillips at erica.phillips@wsj.com
(END) Dow Jones Newswires
September 24, 2018 17:51 ET (21:51 GMT)
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