Mark Cuban tweeted this and I thought it was useful:
I think one major point the discussion of tariffs is missing is the time and cost to businesses, even the smallest single person company.
It’s a lot of work. It’s a lot of bureaucracy. It almost always required hiring a broker to deal with all of it.
And of course there is the ongoing record keeping that each business is responsible for.
Here is what @grok had to say (really growing attached to @grok @elonmusk)
When importing products that are subject to tariffs, here’s what you generally need to do:
1. **Determine the Tariff Rate**: Use the Harmonized Tariff Schedule of the United States (HTSUS) to classify your product and find out the applicable tariff rate. This classification involves determining the correct HTS code for your product, which can be complex and might require consulting with a customs broker or trade specialist.
2. **Calculate the Duty**: Once you know the tariff rate, calculate the duty you’ll owe. This duty is based on the customs value of the goods, which includes the cost, insurance, and freight (CIF) value. The formula typically looks like this: Duty = Customs Value * Tariff Rate.
3. **Customs Entry**: File a customs entry through the Automated Commercial Environment (ACE) system, usually with the help of a customs broker. This entry includes all necessary documentation like commercial invoices, packing lists, and possibly a bill of lading or airway bill.
4. **Pay the Duty**: You’ll need to pay the calculated duty, along with any other fees or taxes, to Customs and Border Protection (CBP) before or at the time of entry. If you’re using a customs broker, they might handle this for you, but you’re ultimately responsible.
5. **Compliance with Other Regulations**: Beyond tariffs, ensure compliance with regulations from other agencies like the FDA for food products, USDA for agricultural products, etc. This might involve additional certifications, inspections, or permits.
6. **Record Keeping**: Maintain detailed records of all transactions, including invoices, duty payments, and any other documentation. U.S. Customs and Border Protection (CBP) might audit these records, and you need to prove compliance with trade laws.
7. **Consider Tariff Engineering**: If possible, look into ways to reduce tariffs. This might involve changing the product’s design, sourcing materials from countries with lower tariffs, or qualifying for free trade agreements like the USMCA (for products from Mexico or Canada).
8. **Price Adjustment**: Since tariffs increase the cost of your goods, you might need to adjust your pricing strategy. This could mean raising prices, absorbing some of the cost, or finding ways to reduce other costs.
9. **Understand the Impact**: Be aware that tariffs might affect your competitiveness. Consider how these costs impact your market strategy, including potential price increases for consumers or the need for alternative sourcing.
10. **Stay Informed**: Tariff rates can change due to trade agreements, policy changes, or disputes. Keep abreast of any updates through official channels or trade publications.
Remember, while customs brokers can handle much of the paperwork and payment processes, as the importer of record, you’re responsible for ensuring all information is correct and all duties are paid. If your business involves frequent imports, investing in knowledge or hiring experts in international trade compliance might be beneficial.
#8 is especially relevant, don’t you think? It’s inflationary. But you knew that.
Any small business person who imports anything and votes for Trump is a fool. He’s talking about imposing tariffs on everything.