We’re starting this year with an impactful discussion on U.S. import tariffs, policy changes under President Trump’s second term, and the practical implications for global supply chains.

Our guest, Owen Hacke, co-founder of Supply Chain Shark, is a seasoned customs broker with years of expertise helping businesses navigate U.S. import regulations. This episode will provide actionable insights for startups, established companies, and international firms selling into America. From understanding HTS codes and country-of-origin rules to re-engineering products to minimize tariffs, Owen shares examples and strategies you can use today to optimize your import processes.

Listen to the audio here.

Here’s a summary of some main points, but remember to listen for the full episode…

HTS Codes: The Foundation of Import Tariffs

• What HTS (Harmonized Tariff Schedule) codes are and how they classify products for customs.
• The historical development of HTS codes and their role in global trade standardization.
• The importance of accurate classification to determine tariffs and avoid penalties.
• HTS codes apply not just to finished goods but also to components, enabling granular compliance.

The Importance of Country of Origin

• Defining “country of origin” and its role in determining tariff rates.
• Key considerations: where the product is made, where the most value is added, and applicable rules for assembly and materials.
• Examples of companies misinterpreting country-of-origin rules, leading to compliance issues.
• Why transshipment (moving goods through intermediate countries) does not alter the country of origin for tariff purposes.

Revisiting HTS Codes to Reduce Costs

• Regularly reviewing HTS codes can reveal opportunities for cost savings.
• Real-world example: reclassifying educational materials to a more specific category to reduce duties by 17.5%.
• Risks of relying solely on manufacturers for HTS classifications and the importance of importer responsibility.
• How U.S. Customs rulings provide clarity on ambiguous classifications and can guide compliance.

Tariff Engineering: Redesigning Products to Save Costs

• What is tariff engineering? Using material changes or product redesigns to shift tariff classifications.
• Example 1: Replacing metal in rodent traps with plastic to reduce duties from 25% to 0%.
• Example 2: Designing collapsible traffic cones with textile exteriors to save on freight and tariff costs.
• Collaborative efforts between design teams and tariff consultants for innovative solutions.

The De Minimis Program: Opportunities and Risks

• Overview of the $800 de minimis exemption and its impact on small parcel shipments.
• How platforms like Amazon and Temu leverage this model to avoid bulk import duties.
• Risks of abuse, including under-invoicing and non-compliance with safety regulations.
• Anticipated changes to the de minimis threshold under U.S. policy reforms and their implications for businesses.

Conclusion

As 2025 begins, businesses face a changing landscape in U.S. import regulations. Owen reminds us of the importance of staying informed, compliant, and proactive.

Key Takeaways:

• HTS Codes: Review classifications regularly to ensure accuracy and reduce unnecessary costs.
• Country of Origin: Understand the rules and avoid missteps that could lead to penalties.
• Tariff Engineering: Innovate your product designs to optimize duty classifications and reduce costs.
• De Minimis Program: Anticipate policy changes and develop strategies for long-term sustainability in global trade.

Related content…

• Get assistance from Sofeast with our various supply chain management services
• Get in touch with Owen Haacke on LinkedIn
• Visit supplychainshark.com
• Trump’s Second Term: Tariff Talks Ignite Global Tensions [Podcast]