Latest news with #HTSUS
Yahoo
28-05-2025
- Business
- Yahoo
Passport Global Secures U.S. Customs License, Expands Brokerage Across All U.S. Ports
PALO ALTO, Calif., May 28, 2025 /PRNewswire/ -- Passport Global, Inc. (Passport), a leading global ecommerce solutions provider, today announced it has been officially granted a U.S. Customs and Border Protection (CBP) Corporate Customs License and National Permit. This milestone positions Passport among a select group of providers authorized to act as permitted licensed customs brokers across all U.S. ports of entry—enabling the company to conduct customs business on behalf of ecommerce merchants and unlock a new era of regulatory control, cost recovery, and trade compliance. "With the rise of cross-border ecommerce, brands are navigating increasingly complex customs environments—and too often doing it without a safety net or guide," said Alex Yancher, Co-Founder and CEO of Passport. "Becoming a licensed customs broker strengthens our ability to protect our customers, proactively manage their risk, and ensure they stay compliant every step of the way." Expanded Authority, Streamlined Compliance With this license, Passport can now file customs entries, represent importers, facilitate duty drawback, and offer critical compliance advisory services. These are activities restricted to licensed brokerage organizations under federal law (19 CFR 111.1), and include: File formal and informal customs entries directly into ACE Represent importers of record (IOR) and manage Post Summary Corrections Submit duty drawback claims for goods exported in the same condition Facilitate bonded shipments to bypass U.S. duty for in-transit cargo These services add to the solutions that Passport's Global Trade team of Licensed Customs Brokers has already been offering, including: Product classification consulting under the Harmonized Tariff Schedule (HTSUS) Customs valuation strategies, including transaction value, the first-sale rule, and intercompany pricing models Origin declaration guidance for USMCA and other trade preference programs Support for Partner Government Agency (PGA) requirements such as FDA, CPSC, and EPA Interpretation of CBP rulings, enforcement trends, and notices of action These capabilities come at a critical moment for ecommerce brands. Under Trump administration trade policies, including ongoing de minimis reform and new Section 301 tariffs, international merchants face increased cost exposure and compliance risk. Passport is doubling down on its role as a trusted compliance partner—building on the recent announcement of its patent-pending Seller of Record model and daily tariff coverage at "Securing this license is a significant milestone for Passport," said Traci Fisher, LCB, CCS, and License & Permit Qualifier at Passport. "It reinforces our commitment to delivering trusted, end-to-end customs solutions while ensuring compliance with U.S. regulations at every port of entry. Our clients can now rely on us to streamline their import processes, reduce risk, and navigate trade changes with confidence." Duty Drawback Facilitation and Recovery Many ecommerce brands importing goods into the U.S. and subsequently exporting them—as returns, replacements, or global shipments—are eligible to reclaim up to 99% of duties, taxes, and fees. As a licensed customs broker, Passport can now work directly with CBP to manage the end-to-end drawback process, including: Eligibility screening and drawback program setup Application filing for drawback privileges Data reconciliation and CBP-approved claim preparation Advisory support to optimize drawback strategies in high-duty categories such as apparel, supplements, and footwear "With margins tightening and tariff volatility increasing, duty recovery is no longer optional—it's a competitive edge" said Thomas Taggart, VP of Global Trade at Passport. "Our Global Trade team will help ecommerce brands recapture millions in paid duties through a turnkey, fully compliant drawback process." Real-World Impact for Ecommerce Brands For growing DTC brands, Passport's broker license unlocks faster clearance, fewer surprise fees, and expanded margin protection through duty recovery and bonded shipping options. "Unless you want to hire an international logistics and operations team, which is a huge financial investment and time commitment, Passport has proven to be the most effective as far as getting our products to customers and supporting, acting as an extension of our company and enabling our growth," said Max Christman, Supply Chain & Operations Lead at OneSkin. Whether acting as importer of record or providing product classification consulting, Passport's license adds a powerful new layer of control to its cross-border infrastructure. The company is on a mission to make international shipping as seamless and compliant as domestic fulfillment. Combined with its global DTC logistics network, marketplace integrations, and in-country enablement solutions, Passport delivers the end-to-end support and unmatched regulatory depth to merchants worldwide. About Passport Founded in 2017, Passport is a global ecommerce solutions provider that empowers merchants—like Dolls Kill, Ridge, Ogee, OneSkin, and HexClad—to grow profitably and confidently in over 180 countries. Combining innovative technology, global logistics, and expert compliance and growth support, Passport delivers the right solutions for the right markets at every stage of global growth. With in-house licensed customs brokers and international trade specialists, Passport offers a seamless, flexible experience—from cross-border logistics and in-country enablement services to duty and tax compliance—to help D2C brands unlock their full global potential. Users can learn more at ContactSr. Director & Head of MarketingCasey Logo: View original content to download multimedia: SOURCE Passport Global, Inc. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
Trump Administration Slashes De Minimis Duties as Trade War Cools
In the wake of weekend negotiations that saw a drastic lowering of reciprocal tariffs between China and the United States, the White House announced that it would slash duties on de minimis shipments from China by more than half. The import tax on small parcels worth less than $800, previously set at a rate of 120 percent, has been amended to 54 percent. The change will go into effect on Wednesday. Meanwhile, a flat fee of $100 per parcel will remain in place, though a planned increase to $200 starting June 1 has been nixed. More from Sourcing Journal Long Beach Mayor Says It Could Take Months to 'Untangle the Backlog' at Nation's Busiest Port China Has 'Agreed to Open Up' Trade With US as Both Countries Suspend Aggressive Duties Temporary Tariff Truce to Trigger Import Surge of Chinese Goods The news came within hours of the Trump administration's announcement that China and the U.S. had come to a 90-day trade truce wherein triple-digit tariffs were reduced on both sides. President Donald Trump has previously said that closing the de minimis 'loophole' was an essential step in stemming the flow of illegal narcotics into the U.S. De minimis shipments have been used to 'hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices,' he said during his April 2 'Liberation Day' tariff announcement. For shippers of impossibly cheap goods—$6 shirts, $12 dresses—that are seeking to utilize de minimis, the lowering of duty rates on individual parcels won't be enough to keep prices stable. Both Shein and Temu, which have relied on the trade exemption as a lifeline to American shoppers, announced in April that they'd be 'adjusting' prices as a result of the added tariff burden. Shein shoppers on Reddit reported that they've already seen MSRPs creeping upward exponentially while experiencing delayed deliveries due to Customs processing. The president's previous de minimis edicts (the first attempt at eradicating the exception was made in February and canceled within days) had e-commerce titans like Temu and Shein scrambling for workarounds, like bonded warehouses in the U.S. where product can be stored duty-free until it's purchased by end consumers. The three-month pause on tariffs may afford such firms the opportunity to stock up on inventory stored in the U.S. The changes to de minimis have also saddled Customs and Border Protection (CBP) with considerable new responsibility. With 4 million packages a day passing through American gateways using the de minimis exception, and around half of those shipments hailing from China, CBP is now contending with a much more intensive entry process for small shipments than it's been accustomed to. Most packages that would have utilized de minimis are now subject to Type 11 informal entry, which requires that their contents are specified using a 10-digit HTSUS code. Most shippers that have utilized de minimis aren't versed in identifying or communicating this information. Shipments worth $2,500 or less are now subject to more rigorous examination, including more data requirements that help Customs determine the appropriate duty rate.
Newsweek
09-05-2025
- Business
- Newsweek
Trump's Trade War With China Nears Shipping Deadline: Why May 27 Matters
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A critical trade deadline set for May 27 will end temporary exemptions from tariffs on Chinese and other foreign goods, as laid out in recent executive orders by President Donald Trump and customs guidance. The move is part of a broader expansion of the administration's reciprocal tariff policy. The exemption, referred to by Customs and Border Protection (CBP) as the "reciprocal tariff savings clause," allows certain goods in transit to avoid newly imposed tariffs. The protection will expire at 12 a.m. ET May 27. Goods arriving after that time will be subject to tariffs. According to CBP guidance released April 4 and April 8, the reciprocal tariff savings clause applies to goods that were loaded onto a vessel and in transit on their final mode of transport before 12:01 a.m. ET on April 5. These goods have been allowed to enter the U.S. without incurring the newly established tariff rates. Newsweek has reached out to the White House for comment. President Donald Trump speaks with reporters in front of the West Wing of the White House on May 8, 2025, in Washington. President Donald Trump speaks with reporters in front of the West Wing of the White House on May 8, 2025, in Washington. Alex Brandon/AP Photo Why It Matters Trump introduced the reciprocal tariff system to align U.S. tariff policy with perceived trade imbalances and foreign trade practices. Executive guidance and memoranda have said that the policy will be enforced comprehensively and without further delay unless otherwise amended by presidential action. What To Know Once the exemption expires, all applicable imports will be assessed the baseline reciprocal tariff rate of 10 percent or higher, depending on the country-specific or product-specific rate established by presidential order. For China, a 125 percent ad valorem tariff has been imposed on most imports as of April 9. CBP has also confirmed that the previous exemption—which had allowed shipments valued under a certain threshold to enter duty-free—was revoked effective May 2. As a result, even small-scale imports from China will be subject to new tariff obligations. With the removal of the savings clause, goods arriving from China and other countries that benefited from the exemption will now face full tariff rates. These include a wide range of items such as electronics, household goods, and textiles. CBP notices and executive orders stipulate that only limited product categories remain excluded under updated annexes to the executive orders. Those exclusions, updated through a presidential memorandum on April 11, now cover specific items including smartphones, computers, and certain components under designated Harmonized Tariff Schedule (HTSUS) headings. What Happens Next After May 27, any imports from China that do not qualify for an exemption will be subject to tariffs. CBP has advised importers that tariff refund procedures and HTSUS modifications to implement these orders will be published by May 16.
Yahoo
01-05-2025
- Business
- Yahoo
Could Changes to Customs Policy Undermine Trump's De Minimis Ban?
With just days to go before China's access to the de minimis trade exception is cut off, the Trump administration has quietly changed its policy on how shipments will be processed for entry into the United States. An April 28 Federal Register notice announced the waiving of Customs and Border Protection (CBP) rules that would require formal entry for goods classified within HTSUS Chapter 99 Subchapters III and IV, that are valued at over $250 and subject to President Donald Trump's International Emergency Economic Powers Act (IEEPA) duties. More from Sourcing Journal DHL Rides Out China-U.S. Turmoil: Supply Chain Shifts 'Good for Us' JFK Airport's New $270M Cargo Hub Opens Amid Customs Clampdown New York Leads 12-State Coalition in Suing Trump Over 'Illegal' Tariffs Had these rules remained in place, shipments of this kind being imported into the U.S. would be subject to either Type 11 informal entry (for goods worth up to $250) or Type 01 formal entry (which doesn't stipulate a value cap, but does require more data from shippers on package contents and origin). Now, CBP said it's pausing, for an unspecified period, the $250-dollar threshold for Type 11 informal entry, and allowing entries worth up to $2,500 to go through the informal entry process. Informal entry doesn't require the use of a Customs broker or the posting of a bond, or have the same stringent data requirements as formal entry. This suspension applies to all countries of origin—including China—and all modes of entry. This is an about-face for the administration and CBP, which had previously stated in its IEEPA FAQ explainer that informal entry would not be permitted, and that formal entry would be mandated for any shipments worth more than $250 that are classified under Subchapters III and IV of Chapter 99 of the HTSUS. That rule was deleted and replaced with the new mandate. Izzy Rosenzweig, CEO of global e-commerce shipping firm Portless, wrote in a social media post that the change would work in favor of both CBP and importers. 'This should allow for 10x the number of packages per entry, which will bring down the cost until it is negligible, but also vastly reduce the number of clearances CBP is handling,' he said. 'Perhaps the best news here is that it means someone at the CBP is thinking through these operational changes very clearly and wants to make sure they are as streamlined as possible, which is a really good sign.' But for those eager to see the end of the de minimis exception, the waiving of Customs rules subvert the efficacy of Trump's executive order closing the trade 'loophole' on May 2. 'Absent action in the next 36 hours to reverse the customs waiver or otherwise require the needed data and accountability to accurately and thoroughly collect tariffs, the Trump administration will have undermined its promised end of the de minimis loophole,' American Economic Liberties Project's Rethink Trade director, Lori Wallach, said in a statement. 'Allowing Informal Entry of goods subject to penalty tariffs valued between $250-$2500 will also undermine enforcement of all Trump tariffs because without requiring importers to provide full tariff codes, it will be almost impossible to collect proper tariffs and without requiring involvement of a U.S. entity, like a Customs Broker, it's very hard to discipline against cheating,' she added. Members of the Coalition to Close the De Minimis Loophole—a collective of law enforcement groups, industry trade organizations and brands—are none too happy about the development. The group, which includes the National Council of Textile Organizations (NCTO), AFL-CIO, the Alliance for American Manufacturing, Families Against Fentanyl, the National Crime Prevention Council and New Balance, among others, wrote an open letter to President Trump on Wednesday urging him to stick to his guns and maintain strong Customs enforcement rules that stem the free flow of de minimis shipments into the U.S. 'We believe that robust customs rules will be crucial to end the damage and threats posed by this loophole as you terminate de minimis for imports from China and Hong Kong,' they wrote. 'We encourage your administration to require the necessary information to enhance duty collections and inspections so that CBP can properly screen imports and enforce the law.' 'We urge CBP not to suspend—even temporarily—regulations such as those requiring formal entry for all shipments valued over $250 subject to penalty tariffs to permit the agency to enforce your directive effectively,' the Coalition added. The group noted that when Trump's previous de minimis ban on China-originating packages was implemented, express shippers were able to pivot 'virtually overnight' to accommodate the new requirements, 'which demonstrates their ability to comply with the president's executive orders.' But DHL, one of the express shippers in question, has been working behind the scenes to advocate for a softening of the rules—and it took a victory lap after CBP's waiver was released. The group issued a statement saying the administration's decision 'follows constructive dialogue between DHL and the U.S. government, who demonstrated a strong willingness to understand our operational and technical challenges, and who agreed that it was imperative to act quickly in the interest of U.S. consumers.' 'DHL Express values the opportunity to have contributed to the development of this new regulation by the U.S. government in favor of our customers, who have been our focus,' the company added. 'It is our priority to effectively support your needs, and we view this development as a positive step forward in continuing the facilitation of international trade.' The shipper said customers might still experience delays as it navigates the reintroduction of the service and clears its package backlog.
Forbes
28-04-2025
- Business
- Forbes
AI For Product Classification: Can Machines Master Tax Law?
E-commerce, internet online shopping and delivery concept. Product classification may sound like an obscure, back-office task that only concerns customs officials or tax accountants. But in reality, it is a cornerstone of tax and customs compliance for businesses of all shapes and sizes, whether they sell goods, services, or both. Accurate classification ensures that the right tax rates, duties, and exemptions are applied, helping companies avoid costly errors, audits, and penalties. When we think about product classification, we often picture long spreadsheets filled with codes like "HS 8471.30" or "HTSUS 0101.21." These codes come from global systems such as the Harmonized System (HS) and its regional versions, like the Harmonized Tariff Schedule of the United States (HTSUS) and the European Union's Combined Nomenclature (CN). They create a common language for classifying goods in international trade and applying the correct import taxes and duties. But product classification is not only about international trade. Even domestic sales require assigning the right tax rate to products and services. Businesses that rely on tax engines or accounting systems often use tax codes—alphanumeric identifiers that tell the system whether a product is taxable, exempt, or qualifies for a reduced rate. In other words, classification is everywhere, touching every invoice and tax return, often without anyone outside the finance team noticing. Getting product classification wrong is not just a small technical mistake. It's more like planting a tiny bug in your company's software that quietly replicates itself until it's everywhere. A single misclassified product can flow undetected into invoicing, accounting, financial reporting, and tax filing systems. Each platform, trusting the information it receives, passes the error along until one day, the mistake is discovered—usually by a tax auditor, and often with a hefty bill attached. Errors in product classification can result in underpayment or overpayment of taxes, incorrect financial statements, and reputational damage. It can also mean years of retroactive corrections and fines. In short, it's a nightmare scenario that every CFO wants to avoid. Historically, product classification was done manually. Tax professionals would comb through product descriptions, technical specifications, and usage details, then use their knowledge of tax laws to assign the correct codes. This method required deep expertise, meticulous attention to detail, and endless patience. And unsurprisingly, it was slow and prone to human error. Enter artificial intelligence. AI systems today can analyze vast amounts of product data—including descriptions, specifications, and images—to suggest accurate tax classifications. Hybrid systems that combine text and image analysis have become especially effective, as pictures can help clarify ambiguities that plain text struggles to resolve. By learning from historical data and classification patterns, AI can help reduce human error, speed up the classification process, and handle enormous product catalogs with ease. It sounds like a dream, doesn't it? But before you envision a future where AI bots run the entire tax department, it's important to ask: Can AI truly master the complex, nuanced world of tax classification? Not every product fits neatly into a predefined category. Products that have multiple uses or complex components often fall into tax gray areas that require subjective judgment. Take smartwatches, for example. Should they be classified as wristwatches or as communication devices? If the primary function is telling time, they belong in one category. If it's making calls or sending messages, they belong to another. Similar dilemmas arise with multifunction printers, which could be classified either as printers or photocopiers depending on their main function. Even seemingly simple products can turn into legal puzzles. Different countries and regions have their own classification quirks, often leading to results that defy common sense. The "Subway" case in Ireland is a famous example: the Irish Supreme Court ruled that Subway's bread contained too much sugar to legally qualify as "bread" for VAT purposes. Meanwhile, across the Irish Sea in the United Kingdom, there's a £470,000 tax battle over a surprisingly squishy question: Are Mega Marshmallows sweets? This question matters because most food in the UK is zero-rated for VAT, but confectionery—sweets, chocolates, and the like—is taxed at 20%. According to the law, anything "sweetened and normally eaten with the fingers" counts as confectionery. Initially, the First-Tier Tribunal sided with the marshmallow company, arguing that Mega Marshmallows are so large that they are more of a barbecue ingredient than a snack you casually pop into your mouth. However, HMRC was not satisfied and continued to appeal up the court ladder. Eventually, the Court of Appeal weighed in, stating that the lower court had overlooked a crucial point: how people actually eat Mega Marshmallows. If most consumers simply eat them with their fingers straight out of the bag, then they qualify as sweets—and yes, the 20% VAT applies. Now, the case is heading back to the tribunal (once again) to resolve the big question: Are Mega Marshmallows normally eaten with fingers, or are they typically roasted first? These examples highlight a crucial point: product classification is not purely technical. It is a legal process that often depends on interpretation, usage, perception, and even cultural habits. While AI can process millions of data points faster than any human, it may struggle with the subtle, context-dependent reasoning needed to resolve such cases. Recent scientific research backs up these concerns. Studies have shown that zero-shot product classification—where an LLM tries to categorize without seeing examples beforehand—works reasonably well, but still struggles with ambiguous, or domain-specific product categories. Despite its impressive capabilities, AI is not yet capable of fully replacing human expertise when it comes to product classification. Complex legal interpretations and the need for nuanced judgment on intended use and function mean that humans are still needed at the controls. For instance, AI can easily classify a chair as a chair. But can it determine whether a reclining massage chair equipped with heat sensors should be taxed as furniture, medical equipment, or luxury electronics? That requires understanding the product's design, intended use, marketing claims, technical specifications, and often, the applicable case law. In short, AI can automate the routine—scanning descriptions, suggesting matches, flagging inconsistencies—but it cannot (yet) automate the judgment, interpretation, and creativity that human tax professionals bring to the table. Leveraging AI in VAT determination is much like using a navigation system during a storm. Technology offers vital assistance, but experience and intuition guide critical decisions. The future of product classification is not about choosing between humans and machines. It's about collaboration. AI can and should handle the heavy lifting: processing millions of product descriptions, highlighting likely matches, and spotting potential errors. This frees up human experts to focus on the challenging, high-value tasks that require experience, judgment, and an understanding of legal context. Let AI handle the volume, and humans handle the nuance. One promising development from recent research is the idea of blending AI models with external sources of information, such as knowledge graphs or retrieval-augmented generation (RAG) systems. Instead of expecting AI to "know everything," we help it access richer, curated domain knowledge. As AI continues to evolve, it will be fascinating to see just how far we can push the limits. But for now, when it comes to navigating the fiscal theme park that is modern tax law, it's still wise to keep a few experienced humans on hand—just in case the machines need a little help reading the menu. At the same time, it's worth asking a more fundamental question: before we rush to deploy increasingly complex AI systems to manage tax rules, are we addressing the root of the problem? Building layers of technology to manage an already overwhelming web of legal distinctions is, at best, a reactive strategy. It is like constructing a labyrinth and then inventing smarter and smarter tools to find the way out. Perhaps, instead, we should ask whether the labyrinth needs to be so complicated in the first place. If tax classification systems were simplified, standardized, and made more intuitive, we could dramatically reduce the need for technological aids—and maybe save a few Mega Marshmallows along the way. The opinions expressed in this article are those of the author and do not necessarily reflect the views of any organizations with which the author is affiliated.
