Podcast: Understanding tariffs

by | Dec 20, 2018 | Blog, Member News, Podcast

“A tariff is basically a tax” …  “There’s are three lists of products that have been covered under tariffs, and a fourth list is threatened, that basically cover all of the additional goods that come out of China,” says Arthur Freierman, an attorney who serves as outside counsel to the ASCDI. Freierman has assisted the ASCDI with the organization’s ethics process, which seeks to maintain best practices for members and for the industry as a whole. Now, with tariffs as a new political and economic issue, Freierman has been offering advice to the organization and the organization’s members as they navigate through an unprecedented, in modern times, era of tariffs and potential “trade wars” with nations such as China. China is a major manufacture for much of the gear ASCDI members sell, buy and service. “The total of the first three lists is about $250 billion of product annually that would be subject to tariffs, bug the fourth list as an additional $267 billion, so it adds up?!”

In this podcast Freierman lays out what dealers and other channel partner companies need to know and understand about tariffs and the process that add or remove tariffs. He discusses what buyers and sellers should understand if they are trading across a border where tariffs have been imposed. A major takeaway is that tariffs view the products place of manufacture, and not where its being shipped from, as to what tariffs might be levied. A company importing used equipment originally made in China is likely going to face tariffs as if the gear was being imported from China, even if the used equipment is being sold and shipped from a country other than China. Freierman outlines resources available and ways for members to stay up to date on tariff status. Since many ASCDI members operate on buy and sell price differentials, tariffs can change the price or desirability of certain transactions. Freierman also points out that attempts to avoid tariffs by improperly processing declarations and other documents ca lead to still penalties and fines.  Keeping current and best practices are a sound way to proceed.

Freierman notes that the ASCDI has been working on public policy while keeping members up to date on the tariff situation unfolds.