When cross-border logistics encounter “tariff surges,” cost shifting and compliance techniques can be used to address them.
In this article, Weefreight provides a detailed analysis, which we hope will be helpful.
Cost Shifting
Increasing Product Prices: For products with significant brand influence and market competitiveness, companies can appropriately raise retail prices to pass on the increased tariff costs to consumers. However, the price increase should be reasonable to avoid impacting the product’s market competitiveness. Furthermore, efforts can be made to improve product packaging and enhance product services to increase consumer acceptance of the price increase.
Optimizing Supply Chain Costs: Reduce reliance on a single market by deploying a global supply chain. For example, establishing production bases in Southeast Asia, Mexico, and other regions can leverage local policies and lower production costs to reduce overall product costs, thereby offsetting the cost pressures caused by tariff increases.
Adjusting Product Mix: Reselect products, eliminating low-margin products that generate no profit after tax, and focusing on high-premium, tax-resistant categories. For example, for high-value electronic products with low tariff sensitivity, promotion and sales efforts can be increased to mitigate the impact of tariff hikes on profits.
Compliance Tips
Leverage Free Trade Agreements: Monitor and leverage various free trade agreements, such as the RCEP. For electronic products (such as power banks) exported to ASEAN, if they meet relevant regulations, tariffs can be gradually reduced from 15% to 0. However, relevant documents such as a Certificate of Origin (Form E) must be provided to enjoy the tariff benefits offered by the free trade agreement.
Ensure customs clearance compliance: Establish a dedicated compliance team or partner with a professional customs clearance agent to optimize and standardize customs clearance processes. Integrate standardized ERP templates with blockchain document traceability technology to assist with qualification certification applications, reducing declaration errors and timeliness costs in multiple ways. For high-risk products, conduct pre-screening in advance, allowing a 3-5 day buffer period to ensure smooth customs clearance and avoid additional costs and losses due to customs clearance issues.
Follow policy updates: Subscribe to professional tariff databases, such as CustomsInfo, to obtain real-time information on tax rate changes in various countries, allowing you to promptly adjust your supply chain routes and logistics strategies. Maintain close contact with industry associations and government departments to stay informed of policy trends and relevant countermeasures.
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