Here’s a question for business owners who import or export: Do you have a tariff strategy?
Shelly Bernal is an expert in international business and business strategy and she’s a consultant at Florida SBDC at FIU, the small business development center within the university’s College of Business that offers no-cost business consulting to small businesses in Miami-Dade and Monroe counties. Bernal shed some light on this topic of tariffs with a timely webinar that addresses how to navigate tariff changes and their impact on import compliance, operations and commerical approaches. Her guidance provides a framework for how to streamline and efficiently and effectively address what is happening right now.
There have been so many changes on the tariff front, and it’s possible that that the plans we had before the changes may not be functional anymore – there is likely a need now to adapt new paths due to these changes, she said, referring to the best-selling book Who Moved My Cheese?
“The goal with this webinar and the content I am providing you is really to provide you with a framework, a process to move through to make sure you can address what needs to be addressed in your business,” Bernal said. To that end, the webinar focused on import compliance, import operations, strategic management, and commercialization.
Bernal emphasized the importance of understanding tariffs by Harmonized Tariff Schedule (HRS) codes and country of origin, and the role of customs brokers. Her key points included the necessity of accurate product classication, the benefits of the ACE system for duty tracking, and the potential for duty drawbacks for businesses exporting significant volumes.
Let’s dig a little deeper. On the topic of import compliance, Bernal emphasized the importance of using a customs broker and selecting the best one for your business, based on your risk tolerance, comparing them to CPAs for tax filings. Of course, using a customer broker does not relieve the importer of their responsibilities, and the business owner needs to have enough knowledge to ask the right questions. Bernal also discussed the Harmonized Tariff Schedule code, country of origin, and valuation as core import compliance areas.
Bernal advises businesses to verify their codes, understand the general interpretive rules, and use customs rulings for clarification. It’s very important that small business owners understand the USMCA Free Trade Agreement and the impact of Section 232 tariffs on aluminum and steel.
As for operations, Bernal discussed the importance of understanding record-keeping, recommending businesses to keep records for at least five years. She introduced the ACE (Automated Commercial Environment) system, which provides visibility to the running balance of duties and communications between customs brokers and CBP.
She also explained the benefits of bonded warehouses, duty drawbacks, and Foreign Trade Zones for businesses importing significant volumes.
Bernal emphasizes the need for a comprehensive system to manage multiple variables and make informed decisions based on changing information.
As for market strategy, Bernal advised businesses to consider the impacts of tariffs on their customers and suppliers, and to rethink the competitive landscape from a country of origin perspective. She also discussed the importance of understanding the relationship with fulfillment centers and exploring new channels and markets.
Her recommendation: manage inventory, accounts receivables, and cash flow projections to improve profitability. It’s also important to maintain relationships with banks, and small businesses might consider foreign currency forward contracts.
Bernal and the SBDC at FIU team can help small businesses navigate these waters. Also, here’s information on an upcoming meeting that could be beneficial to you.
Bernal goes into more detail on all these topics, so you can learn more by tuning into this free webinar Tariff and Trade: Understand the Impacts on on Small Business Operations below.