Navigating Tariff Turbulence: Mitigating Trade Remedy Tariffs

IEEPA Refund Calculator Investor Relationship Financial Overview Company Overview Financial Overview Corporate Governance Overview Board of Directors Committees Internal Audit Regulations Shareholder’s Insights Shareholder’s Insights Shareholder’s Report Investor Contact Investor FAQ Contact MyDimerco English繁中简中 Home » Navigating Tariff Turbulence: Mitigating Trade Remedy TariffsNavigating Tariff Turbulence: Mitigating Trade Remedy Tariffs by Dimerco | May 9, 2025 In recent months, trade remedy tariffs imposed by the new U.S. Administration have taken center stage. They are reshaping global trade dynamics and the way U.S. importers and exporters manage their supply chains. All of this change can seem overwhelming! Trade remedy tariffs are special duties the U.S. imposes to protect domestic industries from unfair imports. These include: • Section 301: Targets unfair trade practices, mainly used against China • Section 232: Protects national security (e.g., steel and aluminum) • Antidumping / Countervailing Duties (AD/CVD): Penalizes goods sold in the U.S. at unfairly low prices or with government subsidies If you are navigating this complex landscape, we’re here to help you understand how these changes impact your business, and to help you find ways to mitigate the financial and operational impacts on your business. Let’s look at some tips you can leverage to stay ahead of the game. 1.) Diversify Your Supply Chain: Avoid relying solely on one country like China. Many companies have adopted a “China Plus One” strategy, which involves adding suppliers from other countries such as Vietnam, India, or Mexico without fully abandoning Chinese operations. Others are diversifying their supply base across Southeast Asia. This helps balance costs and reduce tariff exposure, especially given the lack of certainty in today’s environment. Need help navigating the options? Dimerco’s global footprint gives you “boots on the ground” and a team of experts in all of these key markets. 2.) Engineer Products for Tariff Reduction: Tariff engineering involves modifying a product’s design or packaging to classify it under a different Harmonized Tariff Schedule (HTS) code that carries a lower duty rate. For example, a company might alter materials or components in a product to shift it to a category with a lower duty rate. Through tariff analysis, importers sometimes find the HTS code they’ve been using isn’t the most compliant. For example, one importer recently discovered that a new, more accurate HTS code for their product falls under the steel and aluminum tariffs but exempts them from the very high reciprocal tariffs on Chinese goods. These strategies must be U.S. Customs and Border Protection (CBP)-compliant but are a great way to help you optimize duty payments. Reach out to an expert for help! 3.) Shift Product Origin Strategically: Origin engineering allows importers to partner with their foreign suppliers to move a portion of their manufacturing to a new, more duty friendly location while still enjoying the cost and qualify benefits of sourcing key components in more traditional locations. For example, a supplier may source some key components in China but manufacture them into a final product in Vietnam. If the product meets CBP’s rules of origin for substantial transformation, the country of origin of the product could be Vietnam even though some of the components were sourced in China. Again, you don’t want to go it alone. Partner with an expert for help to ensure your plans meet CBP’s requirements for an origin shift. 4.) Utilize Foreign Trade Zones (FTZs) or Bonded Warehouses: FTZs and bonded warehouses allow importers to delay or reduce duty payments, but recent regulatory changes have made the rules more complex. As of April 9, 2025, all goods subject to trade remedies must enter FTZs under Privileged Foreign (PF) status, locking in duty rates at the time of entry. This change may work in your favor—or not—depending on future rate shifts. Bonded warehouses, by contrast, assess duties at the time of withdrawal, offering more flexibility when rates are likely to decrease. 5.) Explore Trade Agreements – Especially USMCA: Companies can reduce costs by leveraging existing trade agreements with countries not subject to tariffs. Unfortunately, recent trade remedy tariffs imposed by the Administration have rewritten the rules and only one free trade agreement (FTA), the USMCA, remains somewhat duty free. Still, manufacturing goods in Mexico or Canada gives companies a significant edge in the market. If the final product meets HTS code shift rules, most tariffs can be avoided—even when using some foreign components. 6.) Negotiate Shared Costs with Suppliers or Customers: Some businesses have renegotiated contracts to share the burden of tariffs with suppliers or end customers. This might mean cost-sharing arrangements, discounts, or price increases that are transparently tied to tariff hikes. 7.) Advocate Through Industry Groups: Companies can also join industry associations or lobbying efforts that advocate for tariff relief or exemptions. Collective action often has more influence in shaping future trade policy or securing exclusions. For example, the automotive industry was recently successful in pushing the administration to reduce the tariff burden on their imports. 8.) Track Your Supply Chain Data Closely : Explore budget-friendly trade compliance and supply chain technology that enables good visibility into your supply map down to the component level. Get data from your brokers and sign up for CBP’s free ACE portal. You need data to stay nimble. The new landscape is going to require you to act quickly to stay ahead of the competition. You’ll need data from your Customs entries including countries or origin, HTS codes and value trends to make good, quick decisions about how to navigate the future. Data from your broker will also help you to analyze potential missed opportunities for duty exclusions or other tariff reductions. 9.) Outsource Logistics Services: Until the trade policy landscape is clear, leverage your service provider’s assets, intelligence and expertise to help manage your business through these changes. Be wary of committing your own resources to a particular market as trade policies in that region could shift quickly. 10.) Move Slowly: Announcements by the President, and frequent pivots on tariff policy indicate no source location offers safety from new tariffs, and tariffs that are here today could change tomorrow. Proceed carefully to ensure sourcing shifts make sense, your new source country isn’t the target of new tariff measures, and logistics costs, lead time or quality issues don’t outweigh duty savings. Speak with trusted advisors who understand the market and the trade policy landscape to get advice before making any big changes. 11.) Make the Most of Existing Exclusions: Partner with your service providers to explore opportunities for exclusions from the new tariffs. For example, Dimerco offers a handy tariff tool to estimate how new tariffs could affect your business. In just three days, you’ll receive a custom report with financial impact scenarios and mitigation suggestions, no obligation required. 12.) Stay compliant: The Administration, alongside several Congressional committees, will continue to place pressure on CBP and DHS to strictly enforce compliance. The trade has already begun to see enhanced enforcement and inspections on cargo. Expect increased scrutiny on compliance practices and enhanced fines and penalties. Collaborate with trusted advisors to perform a gap analysis on your internal compliance and be sure you have written policies and procedures in place to avoid any regulatory pitfalls. 13.) Engage Trusted Advisors: Engage trusted advisors, like Dimerco, to help test out new markets, move your goods seamlessly on new trade lanes, and leverage opportunities to mitigate the impacts of the new tariffs on your business. Trade compliance consultants can keep you up to date on the latest tariff changes, let you know what might be coming next, and share best practices importers are currently employing to gain an edge against the competition. Taking Control of Your Supply Chain While this Administration’s trade remedy tariffs place an enormous burden on importers, adopting a diversified strategy that includes compliant supply chain tactics and effective long-term planning can help mitigate the impacts of these additional costs on your business. It’s easier to come out ahead with a best-in-class partner by your side. Ready to Reduce Your Tariff Exposure? Dimerco’s experts are here to help. Our no-cost Tariff Impact Calculator lets you assess how trade remedy tariffs affect your business in just a few days. Upload your trade data and get a clear, actionable report, so you can make informed decisions with confidence. Have questions? Get in touch with one of our specialists to explore custom strategies that fit your unique supply chain. Post Tags: Asia Pacific | China | Customs Clearance and Compliance | Economic Challenges | Freight Forwarding | Supply Chain Solutions | USA We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.ACCEPT Cookie settingsManage consent Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience. 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