Since launching our monthly webcast series this year, “BDO Talks Tariffs,” attendees have submitted more than 80 questions. While we aim to address these questions during each webcast or through follow-up communications, the number of questions we receive each month reflects the fast-changing nature of the trade and tariff landscape. Below, you’ll find our answers to the 10 most common questions we’ve received, offering clarity on key trade and tariff topics.
In the U.S., the importer of record is responsible for paying tariffs and has the compliance burden. The importer must exercise reasonable care with respect to its importations. And unlike other countries, the U.S. allows nonresident companies to register as the U.S. importer of record; thus, foreign companies can be responsible for paying the tariffs, but never foreign governments.
U.S. tariffs and customs compliance requirements apply uniformly to all importers, regardless of the size or structure of the business – and even to individuals, who can also act as importers of record. There are no general exemptions based on entity type, though some imports may be eligible for certain special trade programs.
Tariffs can be cumulative or "stacked" in certain cases where the base duty rate under the Harmonized Tariff Schedule (HTS) code is applied and additional duties—such as those under Section 232 or Section 301—may be added on top. The biggest area of confusion centers on steel and aluminum derivative tariffs where the Section 232 tariffs are applied at 50% of the metal content, but the IEEPA rate(s) are applied to the non-metal content, in addition to any Normal Relations duties, Section 301 “China tariffs,” and antidumping/countervailing duties.
Yes, exemptions and reliefs exist for products imported temporarily for repair, warranty work, or re-export, often under HTSUS Chapter 98. However, these are specific provisions that require a careful review of their applicability and compliance with strict documentation requirements.
Changes in free trade agreements like USMCA may impact specific rules of origin, which determine if a product is considered originating from a member country based on criteria such as regional value content and/or a “tariff shift.” For instance, changes to USMCA now being contemplated as part of the mandatory congressional review in 2026 may require higher North American content for preferential treatment in various sectors.
Tariffs significantly impact transfer pricing and related party transactions because the customs value of imported goods from related parties is based on the transfer price. Tariffs typically directly impact the Cost of Goods Sold (COGS), thus affecting profit margins for both the importer and its related foreign seller, which may then result in periodic or year-end transfer pricing adjustments. For royalty payments, if they are tied to the imported merchandise (e.g., if they are a condition of sale), they may have to be added to the dutiable value, leading to higher tariffs. Any proposed changes to transfer prices or transfer pricing models require compliance with both IRS and U.S. Customs arm’s length rules.
Yes, duty drawback is a key mitigation strategy. Eligible tariffs include most standard duties, Merchandise Processing Fees, Harbor Maintenance Fees, Section 301 and Section 201 tariffs, and IEEPA reciprocal tariffs. However, Section 232 tariffs, antidumping/countervailing duties, and IEEPA fentanyl/trafficking tariffs are not eligible for duty drawback. Other strategies, such as first sale for export, bonded warehouses, foreign-trade zones, etc. are available to mitigate all tariffs, but there may be some limitations and require strong internal controls.
Tariffs are determined by the country of origin of the finished product, i.e., whether a “substantial transformation” has occurred in the final country of processing/manufacturing prior to export. However, except for goods that are considered natural resources (e.g., timber, fish, minerals and mining products), this is a complex determination with numerous factors to consider.
Tariffs are subject to frequent change due to policy updates, trade disputes, and legislative actions. There are ongoing investigations and actions regarding new or increased national security tariffs on pharmaceuticals, commercial aircraft and jet engines, heavy duty trucks, semiconductors, critical minerals and derivatives, polysilicon, drones, wind turbines, and furniture. Specific rates and product lists can change rapidly, often requiring continuous monitoring of official sources for the latest updates.
To access customs data through CBP’s Automated Commercial Environment (ACE), importers must register for an ACE Secure Data Portal account with CBP. ACE allows the importer of record to obtain primary access for specific shipment data given that the importer of record is the party legally responsible for the import and can authorize brokers or third parties to view or manage information on their behalf.
If you would like more information, or have additional questions about our Customs and International Trade Services, please contact us.