How to Stay Compliant with U.S Tariffs and Reduce Duty Costs

The landscape of international trade is evolving rapidly, and recent shifts in U.S. customs duties are among the most significant changes influencing global supply chains. The introduction of new or higher duty rates, along with tighter enforcement, can substantially increase landed costs, disrupt sourcing strategies, and weaken the competitiveness of companies importing into the United States. 

In this environment, businesses are actively exploring cost-saving strategies to mitigate financial impact while maintaining strict tariff compliance. 

With the right strategies, organizations can not only reduce their cost burden but also strengthen the resilience and agility of their supply chains. The approaches below outline the main actions to remain compliant and optimize operations in response to U.S. tariff measures.  

1. Verify HS Coding to Apply the Correct Tariff Classification and Duty Rate

Every product imported into the country must be assigned a 10-digit code under the U.S. Harmonized Tariff Schedule (HTS), which determines the applicable duty rate. Errors can lead to overpayments or penalties. 

With a detailed analysis of the product and in line with regulations, it is possible to propose tariffs adjustments resulting in significant savings. 

Case Insight: 25% Cost Saving for Packaging Manufacturer

Following the introduction of new tariffs, a European packaging equipment manufacturer temporarily suspended exports to the U.S. market. GEODIS conducted an in-depth review of the company’s product to ensure full compliance with customs regulations. As a result of the reclassification, the company resumed exports and reduced its duty costs by more than 25%. 

2. Manage U.S. Customs Bond Requirements and Adjust Duty Deferrals

In the United States, bonds are financial guarantees required by U.S. Customs and Border Protection (CBP) and calculated based on duties paid in the 12 months. A sudden increase in tariffs can quickly exceed existing coverage, potentially causing delays or disruptions during the clearance.

It is therefore essential to regularly review and adjust the bond amount to avoid clearance bottlenecks and ensure smooth import operations. GEODIS can assist companies to monitor their import volumes and duty levels and make the necessary updates in accordance with CBP bond requirements.

3. Leveraging US Foreign Trade Zones (FTZ) Benefits

US Foreign Trade Zones offer a way to improve cash flow by deferring duties, allowing importers to delay payment until goods enter U.S. commerce for consumption into the commerce of the USA. It can also support Merchandise Processing Fee reduction, creating a meaningful lever for lowering operational costs.

FTZs are often most advantageous for high-volume operations or manufacturers with complex supply chains. For globally active businesses, this structure can deliver substantial financial and operational benefits when trading with the U.S. market.

4. Apply the “First Sale” Rule to Reduce Customs Valuation

Customs valuation methods play a central role in determining the duties owed on imported goods. Under specific circumstances, U.S. importers can apply the “First Sale” rule, which allows the declared value to be based on the initial transaction between the manufacturer and the first intermediary rather than the higher resale price paid by the importer. This can significantly lower the dutiable value and consequently the total import charges.

Case Insight: Duty Savings for an IT Firm 

Following the implementation of new U.S. tariffs, GEODIS supported a technology company in applying the First Sale Rule to its imports. 

The firm reduced its declared import value and overall duties paid.

5. Diversify the Supply Chain to Reduce Exposure

Diversifying sourcing and production locations is a long-term strategy to mitigate exposure to U.S. tariffs. Many companies are now exploring nearshoring and sourcing in countries with favourable trade agreements to rebalance their supply chains and minimize reliance on highly taxed countries. Although these shifts may take 12 to 24 months to implement, they help decrease dependency on a single origin country and limit exposure to targeted tariffs.

6. Leverage USMCA Rules of Origin for Reducing Import Cost

In trade with Canada and Mexico, the United States–Mexico–Canada Agreement (USMCA) offers opportunities for duty reduction or exemption if products meet specific rules of origin. 

Understanding how to evaluate USMCA eligibility for products typically involves reviewing the product tariff and ensuring the compliance to the customs origin criteria. Proper documentation is essential, and businesses must comply with certification requirements to validate their eligibility for preferential tariff benefits.

Turning Tariff Preparation and Compliance into a Strategic Advantage

Every company must analyze its supply chain, product portfolio, and trade strategy to identify the most effective levers for managing customs duty exposure and preparing to any changes in US tariffs. A proactive, compliance-driven approach - supported by expert guidance - can transform challenges into opportunities. 

By implementing legally compliant optimization measures, organizations can manage costs more efficiently, improve cash flow, and strengthen their overall competitiveness. 

At GEODIS, we support businesses at every stage of this journey, from risk assessment and strategic planning to the execution of efficient and compliant customs solutions. With the right expertise and visibility, companies can navigate evolving trade environments with confidence and achieve long-term, sustainable growth.