Resources for Exporters and Importers
U.S. federal trade policy influences how Maine businesses are able to import, manufacture, and export goods and services. While tools such as Free Trade Agreements promote trade between countries, tariffs and non-tariff barriers often increase the cost of trade.
A tariff is a tax on imported goods and materials. Tariffs are intended to protect domestic industries by making foreign products more expensive or generate revenue for the federal government.
Typically, extra costs of tariffs get passed along to customers in the form of higher prices. When other countries retaliate with tariffs of their own on U.S. exports, the impact on prices is compounded. For small manufacturers that rely on imported products and materials, these tariffs could mean a significant increase in costs of production, reducing competitiveness domestically and internationally.
Tariff Mitigation Strategies
We recommend that you engage with an expert to ensure compliance with all U.S. Customs regulations. In attempts to minimize tariff liability, it’s crucial to avoid duty evasion. MITC can provide referrals to assist with your specific concerns and questions.
Common Strategies for Exporters and Importers
Diversify Supply Chain
During the pandemic many manufacturers realized they can no longer rely on just one location to source key goods. Diversifying the supply chain allows operations to become resilient to changes and can offer cost benefits as well. Maine companies have access to a national Supplier Scouting program through the Maine Manufacturing Extension Partnership (MEP). This free service provides domestic supply chain options for companies seeking additional suppliers. Maine MEP Contacts: Mariah Cunningham-Knaus and Daniel Pavitt
Duty Drawbacks
A duty drawback – or “drawback” as referred to by U.S. Customs and Border Protection (CBP) – is a refund process where certain duties, internal revenue taxes, and fees collected at the time of importation are reimbursed if the goods are exported or destroyed. Importers can file a claim jointly with an exporter to receive benefits. To apply for a drawback claim, you can choose one of the three options: self file, use a licensed customs broker, or use a service provider. All claims must be filed electronically through the Automated Broker Interface (ABI). See Claim Filing FAQ or contact CBP for Questions.
Stockpiling
Stockpiling refers to buying and holding extra inventory as a strategic approach for businesses to buffer the impact of planned tariffs. By purchasing and storing inventory before tariffs take effect, companies may be able to mitigate the immediate impact of the tariffs. This buys time and can provide flexibility to adjust to changing market conditions, offer competitive advantages by keeping prices stable, and mitigate risks associated with supply chain disruptions and price volatility. While it comes with challenges like storage costs, effective management of stockpiling can help businesses navigate the financial and logistical impacts of tariffs. Stockpiling may not be viable for companies struggling with cash flow.
Additional Strategies for Exporters
Duty Deferral: Free Trade Zone (FTZ)
Foreign Trade Zones are economically advantageous for importing and re-exporting goods. Under zone procedures, the usual formal U.S. Customs and Border Protection entry procedures and payments of duties are not required on the foreign merchandise unless and until it enters CBP territory for domestic consumption.
Maine FTZs:
Bangor #58 Counties served: Hancock, Penobscot, Piscataquis, Waldo and Washington
Waterville #186 Counties served: Lincoln, Cumberland, Sagadahoc, Androscoggin, Kennebec, Waldo, Knox, York and Somerset (partial)
Duty Deferral: Customs Bonded Warehouse
A Customs Bonded Warehouse is a secured area within U.S. customs territory, where imported goods can be stored without duty payment for up to five years. The goods can be repackaged, sorted, or labeled under the supervision of U.S. customs officials. The duty would then be paid prior to releasing the goods, but at the rate in effect at the time of withdrawal.
Additional Strategy for Importers
Exemption Process
Companies can apply through the Office of the U.S. Trade Representative (USTR) or the U.S. Department of Commerce for an exclusion for a specific tariff. The USTR established an exclusion process for each stage of tariff increases, allowing stakeholders to request exemptions for U.S. imports that would otherwise be subject to tariffs. It is important to note that most of the exclusion applications have been denied by the USTR.
Recommended Resources
Steps to Follow Along the 2025 New Trade Landscape
Trade Policy Updates
