Notice: Tariff Surcharge

As you may know, recently announced tariffs on various goods imported into the United States from China and Canada, and all imports of iron and steel, have now gone into effect, and more rounds of tariffs are forthcoming this week and possibly again in April. US Customs & Border Protection (CBP) manages these additional tariffs by assigning an additional HTS for each 301, 232 or IEEPA Tariff, plus an additional HTS for any applicable exclusions or quotas. Some items often require up to 5 unique HTS.

Effective immediately, the following surcharge will be effective for all imports to the United States cleared by Future Forwarding Company.

Tariff Surcharge: $3.00 per HTS after 5 HTS free per entry.

Note that this surcharge is in addition to existing entry fees, ISF, and any other handling fees.

As always, we will continue to evaluate our position as this dynamic situation continues to evolve and keep you informed of any changes. We are also committed to continuing to explore strategies to minimize the impact for your organization.

We thank you for choosing to do business with Future Forwarding Company and we value your partnership and continued support.

Implementation of Section 232 Tariffs on Steel and Aluminum Derivative Articles

As of March 11, 2025, the U.S. government has enforced Section 232 tariffs on certain derivative articles of steel and aluminum, expanding the scope of duties beyond primary metal imports. These measures aim to protect national security interests by mitigating circumvention risks associated with modified steel and aluminum products.

Understanding Derivative Articles and Their Impact

Derivative articles refer to goods that incorporate steel or aluminum as a primary component and have undergone limited processing or modification to evade direct tariff application. Common examples include:

Steel nails, tacks, and fasteners
Aluminum stranded wire, cables, and conductors
Certain types of tubing, piping, and mechanical components

The extension of tariffs to these products ensures that manufacturers and importers cannot sidestep Section 232 duties by making minor modifications to raw materials.

Compliance Challenges for Importers

The expansion of Section 232 tariffs presents challenges for importers, particularly in properly declaring derivative value for customs entry. Many derivative articles involve multi-component goods, where steel and aluminum may account for only a portion of the overall product value.

Customs valuation for these products must align with reasonable allocation of dutiable value while ensuring compliance with CBP regulations. Failure to declare accurate values may result in penalties, audits, or import delays.

Reconciliation Entry as a Temporary Reporting Mechanism

To address the complexity of derivative value reporting, importers may consider using reconciliation entry as a temporary solution. The CBP Reconciliation Program allows importers to file estimated values at the time of entry and later submit a final value adjustment. This approach provides:

Flexibility in determining the steel/aluminum proportion of a derivative article
Compliance assurance while adjusting declared values post-import
Reduced risk of penalties due to inadvertent undervaluation

Steps for Importers to Implement Reconciliation

Flag Entries for Reconciliation – When filing an entry, importers should flag it for value reconciliation in ACE (Automated Commercial Environment).
Estimate Dutiable Value – Report a preliminary steel/aluminum content value, subject to later verification.
Monitor Adjustments – Gather supporting data post-import to determine accurate derivative value.
File the Reconciliation Entry – Submit the final reconciled value within the allowed CBP timeframe to adjust Section 232 tariff obligations accordingly.

Looking Ahead

With the Section 232 tariff enforcement on derivative articles now in effect, importers should ensure proper classification of derivative articles, assess their supply chains, and utilize reconciliation entry as a strategic compliance tool.

Future regulatory developments may further refine the valuation process, but in the interim, proactive planning will help mitigate risk and ensure uninterrupted trade operations.

For more guidance on Section 232 tariff compliance and reconciliation strategies, reach out to Future Forwarding today.

USTR Seeks Public Input on Trade Measures Against China’s Maritime Dominance

The Office of the United States Trade Representative (USTR) is requesting public comments on proposed trade actions in response to China’s growing control over the global maritime, logistics, and shipbuilding industries. Following a Section 301 investigation, USTR determined that China’s policies have disadvantaged U.S. businesses and workers, prompting potential countermeasures.

Background of the Investigation

The investigation began in April 2024 after several U.S. labor unions filed a petition citing China’s long-standing efforts to dominate the shipbuilding and logistics sectors. Over the past three decades, China has significantly expanded its control, increasing its global shipbuilding market share from under 5% in 1999 to over 50% in 2023. Additionally, China now produces 95% of the world’s shipping containers and 86% of intermodal chassis, strengthening its influence over global trade logistics.

According to the USTR’s findings, China’s industrial policies have created unfair competitive conditions by displacing foreign businesses, limiting commercial opportunities, and posing economic security risks. As a result, USTR has determined that action is necessary under Section 301 of the Trade Act of 1974.

Proposed Trade Actions

To address China’s competitive advantage, the USTR is considering several measures:

Service Fees on Chinese Shipping Operators – A fee of up to $1,000,000 per vessel entry into U.S. ports for operators with Chinese-built vessels.
Tariffs on Operators Using Chinese-Built Ships – Additional fees for companies that operate or have pending orders for Chinese-manufactured vessels.
Incentives for U.S.-Built Vessels – A system of fee reimbursements for operators using U.S.-manufactured ships.
Shipping Restrictions on U.S. Exports – A phased-in requirement that a portion of U.S. goods be transported on U.S.-flagged and U.S.-built vessels.
Security Measures Against Chinese Logistics Platforms – Possible restrictions on the use of LOGINK, a Chinese-developed logistics data platform, due to security concerns.

Public Comment Period and Hearing Details

The USTR is encouraging stakeholders to provide feedback on these proposed actions. The key deadlines are as follows:

February 21, 2025 – Public comment period opens.
March 10, 2025 – Deadline to request participation in the public hearing.
March 24, 2025 – Deadline to submit written comments.
March 24, 2025 – Public hearing at the U.S. International Trade Commission in Washington, D.C.
Seven days after the hearing – Deadline for post-hearing rebuttal comments.

Comments and requests to participate in the hearing can be submitted via USTR’s online portal at https://comments.ustr.gov/s/ using docket numbers USTR–2025–0002 (for written comments) and USTR–2025–0003(for hearing requests).

Thriving Amid Equipment Shortages: The Power of Strategic Partnerships

Equipment shortages in China are becoming increasingly severe due to high export demand and disruptions to long-haul and intra-Asia services. Vessels are avoiding the Red Sea, leading to longer transits to Europe and North America. This results in delays for Asian shippers receiving the containers they need to transport their cargo.

Impacted Ports and Regions

The Chinese ports of Ningbo, Dalian, and Guangzhou are among the worst affected, facing significant shortages. Inland hubs like Wuhan and Chongqing are also experiencing shortages, particularly for 40-foot and 40-foot high cube containers. This issue extends beyond China, affecting ports in Taiwan and Singapore as well. Additionally, carriers are omitting calls to Indian and Middle Eastern ports to reduce transit delays, leaving empty containers uncollected at ports like Colombo, Sri Lanka.

Rising Export Demands and Their Implications

The increase in containerized exports has exacerbated the issue. Asian exports rose by 13.2% in the first quarter, and U.S. imports from Asia climbed 24% year-over-year in the first four months. Carriers prioritize their biggest customers and long-haul routes over intra-Asia routes, imposing surcharges, restricting containers, charging premiums, and adjusting allocations in response to equipment shortages.

Early Peak Season Disruption

The early peak season has further tightened capacity and driven up spot rates on Asia to North Europe and Mediterranean routes. This peak season, typically seen in May and October for seasonal cargo, has been brought forward by four to six weeks. Carriers are managing the capacity crunch by limiting allocations through blank sailings, rollovers, weight limitations, new cancellation policies, and prioritizing lucrative spot rates over fixed-rate bookings in the Trans-Pacific region.

Topocean Partnership Advantage

Despite these challenges, Future Forwarding’s long-time Asian partner, Topocean, is a beacon of reliability. As one of the top five largest forwarders, Topocean secures space when carriers prioritize their biggest customers. This ensures that we can offer our clients the dedicated, “boutique” customer service typical of small to medium-sized forwarders, while still benefiting from the advantages of a large forwarder.

Strategic Insights and Future Outlook

It is crucial to note that the current surge in demand, particularly from sectors like solar panels, EVs, and batteries, is driven by efforts to avoid new tariffs. However, much of this demand is expected to drop off in the coming months, offering some relief to the strained logistics network.

By leveraging our partnership with Topocean, we can navigate these challenging times, providing our clients with reliable service and strategic advantages. Reach out to us today to learn more.

European Union and New Zealand Sign Trade Agreement

In a significant development for international trade, the European Union (EU) and New Zealand recently finalized a comprehensive free trade agreement. The agreement, signed on Monday, is expected to foster economic growth and strengthen bilateral ties between the two regions. Both parties anticipate a substantial boost in trade volume, with projections suggesting an increase of up to 30% within the next ten years. This article delves into the details of the agreement, highlighting its potential benefits for New Zealand and the EU.

Increased Export Opportunities for New Zealand

New Zealand stands to gain significantly from this historic trade agreement, with projected annual exports to the EU estimated to reach 1.8 billion New Zealand dollars (approximately $1.1 billion or €1 billion). The deal, which took five years to negotiate, is set to eliminate duties amounting to NZ$248 million ($153 million or €140 million) per year, according to a statement released by the European Commission. This removal of trade barriers will create favorable conditions for New Zealand businesses, allowing them to expand their presence in the lucrative European market.

Tariff Reduction and Market Access

A key aspect of the agreement is the gradual reduction of tariffs on New Zealand’s goods exported to the EU. Initially, duties will be removed on 91% of New Zealand’s exports, and this figure is expected to rise to 97% within seven years. The phased elimination of tariffs will significantly enhance market access for New Zealand products, enabling a wider range of industries to benefit from the trade agreement. This is particularly promising for sectors such as agriculture, dairy, wine, and forestry, which are vital to New Zealand’s economy.

EU’s Indo-Pacific Partnership

Highlighting the strategic importance of New Zealand as a partner in the Indo-Pacific region, European Commission President Ursula von der Leyen emphasized the significance of this free trade agreement. With the aim of bringing the two regions closer together, President von der Leyen hailed the agreement as a crucial step towards fostering stronger ties and capitalizing on shared economic opportunities. The EU’s commitment to deepening partnerships in the Indo-Pacific reflects the region’s increasing economic significance and potential for growth.

Legislative Ratification and Future Prospects

Although the free trade agreement has been signed, it is yet to be ratified by the parliaments of both New Zealand and the EU. Once ratified, the agreement will come into effect, marking the beginning of a new era of trade cooperation. This landmark agreement between New Zealand and the EU demonstrates a commitment to open markets, economic integration, and the benefits of globalization.

The free trade agreement between the European Union and New Zealand represents a significant milestone in strengthening economic ties between the two regions. By eliminating tariffs and facilitating market access, the agreement opens up new avenues for trade and commerce. New Zealand’s exporters stand to benefit from expanded opportunities in the EU, while the European market gains access to high-quality New Zealand goods. As both parties move forward with the ratification process, the agreement sets a positive precedent for future trade agreements and reinforces the importance of international cooperation in fostering economic growth and prosperity.

When it comes to navigating the ever-evolving landscape of international trade, having a reliable and experienced partner by your side is crucial. Future Forwarding is your trusted ally in the world of shipping, offering a wide range of services tailored to meet your specific needs. With our expertise, global network, and commitment to exceptional customer service, we ensure that your goods are transported efficiently and securely to their destination. Reach out to us today to find out more.

Tag: tariffs

CBP Issues Guidance on Reciprocal Tariffs

Key Highlights of the Reciprocal Tariff Guidance

New Tariff Classification Requirement

Core Duty Rate: HTSUS 9903.01.25

Exceptions to the Tariff

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