International shipping has plenty of benefits, but also requires attention to detail. However, recent moves by U.S. President Donald Trump have added another layer to the process, one that could end up reducing the U.S. GDP by almost 1% over the long run. First, what are tariffs? Simply put, it is a tax that is added to the cost of imported goods as part of a country’s trade policies. Those tariffs are paid to the customs authority of the country who imposed the tariff.
International freight forwarders can be a key part of the commercial shipping process, because they can help you make sure all appropriate fees and tariffs are paid on your goods. Here are 5 ways the newly implemented tariffs are going to impact your commercial shipping.
Your Costs Are Going to Increase
One of the immediate side effects of tariffs is that the cost of imported goods increases. For importers, that means you will have to sell your products for a higher rate to cover the tariffs. Thus, foreign goods lose their appeal because they cost more, and domestic products get a boost.
More Tariffs Are Coming
When President Trump announced his plan for tariffs on imported goods and raw materials, many countries indicated that they would be initiating tariffs of their own. The U.S. issued increased tariffs on aluminum, steel, and imported Chinese goods. Since then, China has put their own tariffs in place and indicated that they will be restricting access to their markets for U.S. goods. As tensions grow and talks continue to be unproductive, it is likely that more tariffs will be put into place.
Focus on Managing Cash Flow
The reality is that tariffs are going to impact your supply chain. You might be facing higher costs, ones that cannot easily be passed down to customers. Be open to renegotiating current supply chain agreements to help manage these cost increases. Additionally, you need to make smart pricing decisions to avoid driving away customers and to keep your business profitable.
Manage Your Inventory Effectively
If you are importing goods, it is important to remember that holding inventory that is not moving could negatively impact your cash flow. Since cash is key to the health of your business, you need to make sure you are only replenishing inventory that is moving to avoid tying up cash unnecessarily.
Manage Your Shipping Costs
Another way to handle increasing tariffs is to look at your overall shipping costs. Can you do business with a country closer to yours, thus decreasing the cost of shipping? Working with a qualified shipping partner can also help to reduce costs, because they can avoid costly mistakes on paperwork.
Working with our team of professionals, we can help you manage your international shipping, avoiding the mistakes that end up costing your business a significant amount of cash. While you might not be able to avoid the increasing costs associated with tariffs, the reality is that you can manage your shipping process to reduce the impact on your business. Contact us to learn more about how our services can help you.
Atlanta Customs Brokers is one of the oldest and most trusted customs brokerage and shipping firms in Atlanta. Established in 1985, our company has been a fixture in and around the Atlanta airport and Savannah port for more than 31 years. We enjoy working with our international partners and enjoy what we do. If you are a first-time importer or exporter or a large corporation, we can handle your needs.