@CBPAttorneyJen on Twitter
- Nov. 21, 2019
-- Jennifer Diaz, Esq. released this quote:
Reverse tariff engineering is becoming a red hot topic thanks to Ford Motor Co, currently petitioning the U.S. Supreme Court to hear a controversial Customs classification case. China tariffs are putting increased pressure on importers to come up with creative options to lower the immense impact on their supply chains. Reverse tariff engineering is an option importers look to, especially if they have the opportunity to redesign a product to specifications that have the added benefit of being in a lower duty rate classification. This is legal. For example, in the Ford case, cargo vans are subject to 25% duties upon importation, whereas passenger vans are subject to 2.5% duty! That's a huge margin for any sized company. Ford changed the vans so that they were imported with seats, to comply with the classification heading "passenger vans". Importers should not have the expectation that Customs will follow the goods to the point of sale to ensure the goods are still in the same condition as imported. The intended use of the goods should strictly be judged at the time of importation.
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