Solutions For The US Tax Increase Part 2

- Jun 26, 2019-

In the face of the US tax increase, we are helpless. Whether it is a factory or a small trading company, it has a great impact. Many US customers have indicated that they will cancel orders or suspend purchases from China... For our salesmen, personally, it is sad to watch him leave. So we need to think about a stopgap measure. The following suggestions may help us through the crisis.

— 01 —

Winning customers instead of making money

In the face of large customers or previous customers who are easy to lose, we can greatly benefit customers, help customers to tide over the difficulties, and also keep orders from being lost.

What is certain is that the current tax increase situation will not be deadlocked. I believe that China and the United States will negotiate the final solution.

We foreign trade people do not have to worry too much. The current difficulties are temporary. How to reduce losses and even increase profits for enterprises in the long run is something we need to consider now.

— 02 —

Partial profit, share of tariffs

For those who are negotiating, or intendted, it is better to share the tariffs for the customers. Retain customers and keep orders.

For example, we pay 5%-10% of tariffs, and the remaining tariffs are paid by customers. Communicate our cooperation attitude to customers: When the foreign trade environment is good, we will earn together. When the environment is not good, I am willing to share it with you. This will increase the customer's stickiness.

— 03 —

       Orders of around $800 are reasonably lower

US Customs regulations: Declarations below $800 do not require customs duties.

Therefore, as long as it is about 800 US dollars, the declared value can be appropriately lowered. However, it should be noted that a low declaration is easily judged as a false declaration and will be severely punished, so the adjustment needs to be within a reasonable range.

— 04 —

Recommendation 4: Transshipment exit

Since 2018, many freight forwarding operations have been carried out, mainly from Malaysia, Thailand and other places. Mature transshipment freight forwarding can achieve low cost and high controllability, and can be used as a local certificate of origin, such as Malaysian origin. certificate.


— 05 —

Set up a factory in Southeast Asia

A strong company can choose to build a factory in Southeast Asia, not only to take advantage of the local cheap labor, but also to avoid changes in the international situation. Set up a factory in Southeast Asia, so you can export from Southeast Asia, perfectly avoiding the US tax increase to China.

— 06 —

Use the tax-included double cleared

The use of tax-included double-cleared does not actually reduce any burden of tax increases. It is just another way for customers to receive goods comfortably, that is, the tax still has to be paid, but we can distribute the tax to each product. Going, in fact, is equivalent to a fare increase, but when the increased tariffs are spread over multiple products, it will not appear very much, and it will not be unacceptable, And, at the same time, give customers some discounts, which is easy for customers to accept. Including tax and double clear, the tariff is borne by the seller, paid by the freight forwarder, and does not need to be handled by foreign customers.

However, it should be noted that we can only use the tax-included double settlement if we receive the full amount and the risk estimate is small, otherwise the seller will suffer greater losses once the customs clearance fails or there are other disputes.

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