Trump's customs policy is forcing German companies to rethink: This is how you save!

Trump's customs policy is forcing German companies to rethink: This is how you save!

The return of Donald Trump to the White House has significant implications for US trade policy, which is becoming increasingly protectionist. German companies are faced with the challenge of dealing with rising costs and new trade barriers. This leads to higher taxes for German exporters, especially in certain product groups. In view of this development, it is essential to use legal options to reduce customs costs systematically and competently.

One of the key tariff reduction strategies is the “first sale for export” principle, which allows companies to use an earlier and cheaper price within the supply chain for customs value. This approach is particularly attractive because the customs value determines the level of duty when importing goods into the USA. For example, if a manufacturer in Asia assigns a price of $6 to an intermediary in Switzerland, but the latter sells the goods to the USA for $10, the customs value can be set at $6 by applying the “first sale” principle. This leads to significant tariff savings, which can make the difference in a well-structured supply chain.

Important strategies for tariff reduction

To counteract customs costs, experts recommend various strategies:

• Die Trennung von Preisbestandteilen, um Gesamtpreise in zollpflichtige und nicht-zollpflichtige Teile aufzuteilen.
• Die Optimierung deklarierter Werte durch die Anwendung interner Verrechnungspreise, die den Grundsätzen des Fremdvergleichs entsprechen.
• Eine regelmäßige Überprüfung der Zolltarifklassifizierung durch Fachleute.
• Eine strategische Anpassung von Lieferverträgen zur Senkung des Zollwerts.
• Die Betrachtung von Freihandelsabkommen und -zonen sowie einer Umstrukturierung der Lieferkette.

For companies, efficient customs management is an essential part of a comprehensive international tax and supply chain strategy. In the current situation, companies must act actively and apply professional management of US customs law to adapt to the new conditions.

Keep an eye on regulatory requirements

US Customs Enforcement (CBP) has strict requirements for recognizing First Sale value. Transactions must be at arm's length and the first sale clearly intended for export to the United States. In addition, consistent documentation of orders, invoices, contracts and payment flows is required, which the importer must present upon import. Companies that regularly export to the USA should therefore carefully examine the requirements for applying the “first sale” principle.

The “first sale” model, which is not permitted in the EU and Switzerland, offers a legal and business-advantageous way to save on customs duties in the USA. Larger corporations are already successfully implementing this strategy. The goal remains to create long-term, legally secure structures in order to meet the challenges of current trade policy.

In summary, the challenges posed by Trump's protectionist policies present German companies with the need to proactively find solutions to reduce tariff costs. The legal use of the “First Sale for Export” principle is one of the most effective strategies.

Those interested can find more information here: Haufe and Douana.