Navigating the everchanging tides of tariffs

By Jeanne du Buisson, Haidee Watkin & Manav Sharma
 

After the first announcements of the ‘liberation day’ tariffs and the numerous twists and turns of recent months, many exporters are focused on their supply chains in an unstable global trade environment. Exporters are looking to understand their customs obligations and develop strategies that are both flexible and robust enough to withstand the challenges of the global trade storm.

So, what ropes can exporters tighten to ensure a path to calmer waters?

Reconciliation Schemes

Most jurisdictions allow importers to provide a reasonable estimate of the value of an import entry when they cannot establish the Customs value at the time of import, followed by a window allowing importers an opportunity to reconcile their estimate value with the final value of the goods.

Enrolling for the New Zealand Provisional Value Scheme or the U.S. Reconciliation Scheme can help businesses manage the uncertainty of import values and possibly help manage cash-flow more effectively when importing and exporting goods.

Bonded Warehouses

A bonded warehouse allows businesses to store imported goods in a secure facility without the immediate obligation to pay customs duties or taxes. This arrangement enables them to defer payment until the goods are withdrawn for domestic consumption or exported. Like a reconciliation scheme, a bonded warehouse offers an alternative for exporters to manage customs compliance and help manage cash-flow more effectively when importing and exporting goods.

Deferred Payment Schemes

Deferred payments schemes allow businesses to defer the payment of Customs duties and GST until a later specified date. These schemes assist importers in managing cashflow requirements within jurisdiction.

Duty drawback

Duty drawback schemes allow organisations that import goods into a region and subsequently export the goods to claim back (some or in some circumstance) all of the duties paid on the import of goods.

Secondly, understanding Free Trade Agreements (FTAs), Closer Economic Partnerships (CEPs), and preferential tariffs is crucial for businesses engaged in international trade, as these agreements significantly influence costs of operating in a region.

Lastly, many businesses tend to rely on historical data in determining their Harmonized System (HS) classification codes. As products grow and evolve it is important to reassess if old classifications are still valid and if compliance with country of origin requirements are met.

Deloitte along with New Zealand Trade and Enterprise are assisting New Zealand exporters in navigating the everchanging global economy. Deloitte’s Tariff Navigator workshops help provide guidance to exporters in understanding customs compliance, transfer pricing and international tax considerations.

If you are an exporter and interested in participating in a tailored workshop for your business, reach out to your usual Deloitte advisor.