As geopolitical tides shift and international trade policies become increasingly complex, businesses engaged in global commerce face mounting uncertainty. Our recent webinar, led by trade experts Melissa Pinheiro, Corporate Compliance Manager, and Chian Voen Wong, Director, Asia Pacific Global Trade Management, offered clarity on these developments—particularly the renewed use of tariffs under the Trump Administration’s “America First” strategy—and how companies can stay informed, agile, and compliant.
Tariffs as a Policy Lever: A New (and Familiar) Frontier
Tariffs have long been a tool for shaping foreign policy and protecting domestic interests. Yet, the reassertion of this mechanism under the current U.S. administration—especially through the rarely invoked International Emergency Economic Powers Act (IEEPA)—marks a turning point. This legal framework enables the President to impose sweeping trade measures without Congressional approval, citing threats to national security.
This strategic pivot materialized in full force on Liberation Day, April 2, when reciprocal tariffs were levied on imports from more than 125 countries. These included:
As Melissa explained, these tariffs are “stacked”—they are in addition to existing Section 301, 232, and antidumping duties—and signal a radical recalibration of trade relationships.
Policy in Motion: Pauses, Protests, and Negotiations
Just hours after the higher tariffs went live, the administration issued a 90-day pause, citing good faith bilateral negotiation efforts from key trading partners. However, the 10% base tariff remains in force, and additional retaliatory measures are escalating.
Notably, China remains in the spotlight, with tariffs on Chinese goods rising to a jaw-dropping 125%, in addition to the Fentanyl 20% that was already in play. Meanwhile, nations like Canada, Mexico, and the UK are engaging in diplomacy, while others like India, Vietnam, and the EU consider their responses and trade realignments.
Regional Perspectives: Asia-Pacific in the Crosshairs
Chian Voen Wong, based in Singapore and a former trade negotiator, offered an eye-opening view of how Asia-Pacific economies are reacting. Sixteen APAC nations were targeted in the original tariff list, with Cambodia and Vietnam facing some of the steepest rates.
Among the notable regional developments:
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Australia and Singapore, despite not having significant trade deficits with the U.S., were included in the blanket 10% tariff, raising questions about the use of non-tariff barriers in U.S. assessments.
What Importers Can—and Must—Do Now
Both speakers emphasized that while policy is evolving, businesses cannot afford to take a wait-and-see approach. Proactivity is the best defense. Here’s what companies should focus on now:
1. Supply Chain Traceability
Traceability isn’t just good practice—it’s essential. With tariff exemptions for goods with 20% U.S. content, being able to accurately track and prove origin is vital.
2. Review Incoterms and Contracts
Determine who bears responsibility for duty increases. In DDP (Delivered Duty Paid) contracts, for instance, exporters may be on the hook for surprise tariff costs.
3. Reassess Country of Origin Strategies
Understanding rules of origin is critical, especially for leveraging exemptions or shifting production to mitigate costs. PSA BDP’s GTM team can help businesses optimize their sourcing and manufacturing strategies.
4. Engage in Advocacy and Monitoring
While IEEPA bypasses formal comment periods, companies should remain engaged through trade associations, and prepare to respond to future Section 232 investigations.
5. Leverage Duty Drawback and Foreign Trade Zones (FTZs)
Drawback options may apply to the 10% base tariff, and FTZs could help defer or reduce duties in certain cases.
The Road Ahead: Uncertainty, Opportunity, and Strategic Resilience
The final takeaway? Trade tension is far from over—especially between the U.S. and China. As Chian Voen Wong observed, we may be reaching a “point of no return” in bilateral relations. Other nations may step in to fill the vacuum, but this could spark further protectionist responses.
Yet, amid the volatility, there are actionable strategies that companies can deploy. PSA BDP is committed to helping clients navigate these headwinds with expertise, clarity, and practical solutions. Whether it's recalibrating supply chains, verifying origin content, or supporting customs compliance, our Global Trade Management team is here to help. We offer Tariff Impact Modeling, Free Trade Agreement & Alternative Sourcing Strategies, Regulatory Advisory & Compliance Support, Customs Valuation and Duty Drawback Evaluation.
Stay Ahead. Stay Compliant. Stay Competitive.
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