Flexport: Ship Now to Avoid In-Transit Exemption Uncertainties at End of 90-Day Tariff Reprieve
Although the reciprocal tariff for imported Chinese goods may have fallen to 10% for 90 days (see 2505130074), Flexport trade experts advised companies to not treat this action as if there will be an extension. Doing so will prevent companies from having to ask later whether they will have any in-transit exemptions as the 90-day period ends around Aug. 12, according to Angela Lewis, global head of customs for Flexport.
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"What I would suggest is ... to try to get the goods entered into the U.S. before that 90-day pause [ends]," and not assume that tariffs will be assessed based on the date of export, Lewis said during a May 15 webinar on trade and tariffs. "We've already seen this week, as a company, bookings have shot way up. Companies say, we had cargo that is ready to be moved. Let's get it moving. Hopefully the 10% will stay around longer on China, but 90 days is not a long time in case those rates do go back up."
Flexport experts also suggested that companies keep an eye on the tariffs aimed at those who import oil from Venezuela because, even though the tariff authority has been in effect for a month and a half without any actual tariffs imposed, its enforcement could be coming (see 2503250040).
"Enforcement is likely to gain traction, or may be gaining traction, in the next weeks or months ahead, so we want to be paying attention to that," said Steven Lunn, senior manager of customs for Flexport.
However, given that events are constantly in flux and changing, Lunn recommended that companies look for the Federal Register notice to know when things are actually happening.
The swift addition and implementation of various new tariffs have resulted in CBP sending CF-28 notices requesting more information from companies about entries.
For instance, some companies have encountered pushback because they haven't properly transmitted an entry in the correct order, Lunn said.
"Customs' system, when you transmit an entry, has the ability to reject if things aren't done properly. Basically, the system will tell the broker, hey, this hasn't been submitted right. Fix it before we'll accept it and allow it to come into commerce."
However, "what's happening is some of those rules aren't working properly, and so some things are getting through that shouldn't because they're not following the exact rules of the classifications. What's happening is we're seeing, one, some entries are being rejected after statement is already paid, which then causes additional work to have to be done. But the other part of it is we also know that CF-28s are now going out on this. So if they see that a tariff is done incorrectly, you'll get a letter from Customs," he said. Lunn advised companies to work with their broker to make the corrections.
Like others in the trade, Flexport has been receiving questions from importers who say that they have been solicited to move to a delivery duty paid setup (see 2505140056), according to Lewis.
Lewis urged companies to think twice about this arrangement because it's the ultimate consignee who may be held accountable, or any entry may be rejected if the importer on record doesn't have the right to make entry.
"If you were always set up as DDP and didn't know any better, that's one thing. But if you've been importing goods for a while and then suddenly it shifts to DDP, [CBP is] going to hold the ultimate consignee responsible there," Lewis said.