By Wade Gerdemann
– WTF: We all know it’s primary meaning, but for this piece let’s put in different context and use it as ‘What The tariFF’. Tariffs are a hot topic these days, impacting bottom lines across every business and every sector. Even my Big Gulp went up 30%, ok, it was only $0.75, but that’s a big deal to me. With the increased tariffs come a greater spotlight on the trade compliance space, not only due to the higher costs of importing, but now companies are looking at what they can do to minimize the impact, adopting both ethical and somewhat questionable practices; really taking a look at the risk vs. reward and see how far the envelope can be pushed. Let’s take a look at some WTF FAQ’s that have come up over the past 11 months.
Top 5 WTF FAQ’s
Q1: 232/301, IEEPA, Reciprocal Tariffs and diminishing Diminimus: Will it ever end and how can a business plan in an environment like this?
A1: Ah, the age-old question, when will it end? Just as in life, and the most honest answer is, nobody knows. Do we have another three years of this until Trump’s out of office? Will The President ever be satisfied? It’s a crapshoot, and the hardest part is not being able to plan. As a business owner I love to put a process in place, turn the auto-pilot button on and leave it alone, but unfortunately that is not the case here. When we specifically look at IEEPA, although the SCOTUS heard the case last month, the judgement won’t be released until Spring/Summer of 2026, and even then there’s no strong feeling one way or another, the best practice is to remain conservative and plan for the worst. That said, there are tools available to allow businesses to better plan and forecast and be able to compare against past and present impacts and how the business may need to adjust; these platforms will allow companies to better prepare and make possible changes if the fruit is big enough and low for the picking.
Q2: The only things consistent in life are death, taxes and change; does that mean we should change our supply chain footprint?
A2: It’s certainly not a bad idea, but what could that look like? Onshoring? Nearshoring? Partial operations or all? WTF could all blow over before we could even break ground on something new! One thing to consider is making a temporary move and engaging 3rd parties to support you in your interim operations. Fixed costs of the facilities and labor rates could be an immediate savings vs. current tariff rates depending on your situation.
Q3: Tech will fix this! AI it. What do we need? Let’s go!!
A3: Certainly, there are technical solutions that could benefit your trade compliance operations, but unfortunately it won’t be your be all, end all answer to this issue. An off the shelf Global Trade Management solution is always nice to have, and even a well-managed ERP system could get you further along, all assuming your data inputs are accurate, but what is more critical is having a roadmap in place to see what your trade compliance systems journey is. Where you are at, what programs are you currently taking advantage of, what risks do you have and where are the opportunities that a system will be able to support you along the way. Implementing AI in the trade compliance space is an option; it’s a risk, but also an option. Through product classification and solicitation, AI could save hundreds of man hours that could be better utilized elsewhere.
Q4: WTF (the original) trade person! Can’t you do your job and fix this? Do you need more people? How about we get you a Co-Op to help, that should get us by?
A4: Back in the day as a Global Trade Compliance Director for one of the Big Three during Trumps first term, I hated not being able to provide a concise answer or not having the most up to date information; it made me feel incompetent as a professional. And even today, I know many of my colleagues feel that same way, so will an extra person really be able to help? The answer is a legal one: it depends. The skillset is a crucial factor in this space, along with technical capabilities and business process knowledge. Another factor could be your organizational structure. What function does your trade compliance department sit in? Logistics? Manufacturing? Legal? Compliance? Depending on how your company is structured, along with internal company values and ethics, this could all drive how additional people support could help or hinder trade compliance operations.
Q5: How about we change our ‘processes’ on how we bring our products in; reduce the imported value, say it’s coming from England vs. China. We’re a small importer, CBP will never catch us.
A5: Mirë fat. For those of you that are Liam Neeson fans, that’s ‘Good Luck’ in Albanian. There are countless cases against companies, their officers and executives who have chosen to go against the practices of abiding by the letter and spirit of the law. Companies both big and small, have been caught and the parties involved are now doing their best to look good in an orange jumpsuit. Now, having said that, when it comes to changing processes, that doesn’t mean that you can’t look into where your 232 steel and aluminum are truly sourced and start to better refine your traceability practices in order to more accurately reflect the origin source to minimize the duty impact. This is a notable example of what companies need to be doing to look for opportunities for process modification and improvement.
WTF?! That’s a lot! Yes it is, and if there’s anything that we can do to support you in your trade compliance journey, no matter what the task, no matter where you are at, we’re here to help.
