Published on October 2, 2019
The European Union has been in the media lately, as details about illegal subsidies and loans provided for years to airplane manufacturer Airbus have come to light. Given these recent developments, the World Trade Organization gave the U.S. a proverbial ‘thumbs up’ on slapping an additional $7.5 billion of tariffs annually to goods imported from the zone. These new tariffs are meant to counteract or offset the illegitimate influx of cash Airbus received, which allowed them to become a massive global player and a direct competitor to U.S. airplane manufacturer, Boeing.
This battle is just getting started, and, in the next few months, the same World Trade Organization is going to be weighing their decision on what to do about the levy request that the European Union had made against the United States for its similar aid in funding Boeing. The Office of the U.S. Trade Representative has already compiled a list of goods that will be in the crosshairs of this new set of tariffs, which includes various pork meats, milk and cheese goods, dairy products, olives, and coffee imports as well as salts, metal composites and even types of whiskeys aren’t safe. The list is exhaustive, spanning multiple industries and touching on dozens of economic sectors and, ultimately, impacting business worldwide. The first dispute filed was in October of 2004, long before the current trade war became a media talking point.
Your business is going to be impacted by these tariffs, either now or in the near future and it’s up to you, the American business owner, to take proactive steps to ensure you are not blind-sided when the tariff bill comes due. Trade deals from the past, current political and economic relationships and arrangements or organizations in the future, will all have a bearing on how you run your business and how much of your bottom line is eaten away at rising and falling tariffs.
This is a moving target with a bullseye that gets smaller every day, and if you are not making the decisions needed, or having conversations around how to get ahead of these wild swings in costs, then you are not paying attention and your business will fall behind. You owe it to your clients, to your employees, to your family and to yourself to begin taking advantage of Foreign Trade Zones as a strategy of offsetting or lowering these profit eroding taxes, so you can bring peace of mind to your everyday operation and restore some level of predictability in a world where everything is unpredictable.