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Permanent link for Three Key Considerations for Successful International Expansion on February 8, 2024

It seems like all over the internet there are guides giving advice on specific locations or countries. Some of their advice can range from very specific to extremely broad, making it all the more confusing as to what advice might carry over into a different country. But what advice do all these guides have in common?

Here are some general rules to apply when expanding your business to any country:

1. Understand the Market

Market research is absolutely vital when trying to reach a certain segment. When expanding internationally, this step is crucial. Markets vary widely by country and region, market research for a specific area/region is highly recommended.

Some things to consider while putting together market research:

  • Local currencies
  • Potential client base in your market segment
  • Number of local competitors currently in your target segment
  • Foreign competitors in the desired market segment

If performing business from your home country and shipping to a foreign country, ask yourself: Do they take my currency? Could I take their local currency? What kind of people am I trying to sell my product to? What type of people need my product? Which companies in that market are already selling a product similar to what I am trying to sell? Is that market oversaturated?

Asking and answering these types of questions can help verify that your business can become successful in your next venture.

2. Know the Regional Politics

On the outside, a venture might seem extremely viable, but if the political climate is not advantageous then everything can stop in its tracks. If governmental entities are unwelcoming to foreigners or certain types of businesses, then adjustments should be made accordingly.

 Things to look out for regarding regional politics include:

  • Recently passed legislation regarding the business sector your company is attempting to enter
  • Any tariffs or exceptional high duties
  • Past and present tensions between the country of origin and the country your business is attempting to expand to

Has the country you’re operating from been at odds with the country you are trying to perform business with recently? Have the respective governments responded by putting tariffs and other restrictions on each other? Such actions would make trying to get your product within that country extremely expensive and could potentially ruin the competitive advantage you once held over your foreign competitors.

Additionally, if the country residents are highly involved in these politics, they might boycott your product anyway. It is important to consider this a highly relevant factor when attempting to expand internationally.

3. Study the Culture

The culture difference can be a make-or-break point when introducing a new business within a foreign culture. Certain topics might be considered more taboo, other countries may hold more conservative values, and different countries might have almost no boundaries at all.

Here are some techniques to get an accurate grasp of a country’s culture:

  • Analyze Their Media - If a country’s media broadcasts highly controversial or offensive content, business in this country may not be good for business. Media analysis can also often give you an idea of what’s popular with your demographic and help you advertise abroad.
  • Look at Their Laws - Some countries might ban certain demographics from certain activities by the letter of their law. In that case, it would not be wise to release a product that would make those demographics legally vulnerable or unsafe.
  • Know Their History - Countries historically go through phases, yet many aspects of their culture remain constant over time. It’s important to understand major historical movements that have happened within your target country, how they affected or changed the culture, and whether are not some of those impacts are still lasting today. Additionally, it is vital to identify ongoing movements and build that into your brand identity for marketing within that country.

Also, understand that cultures within countries can also vary by region as well, so the more specific an analysis is to the target area the better. It is vital to know if your product or service would transition well within a country’s culture to gauge how successful it has the potential to be. For example, avoid selling products that go against a religious belief held by the majority or confront a cultural taboo in the country you are looking to do business in. It is vital to identify whether your product has a “fit” within the culture you are trying to sell to.

With all three of these major factors in mind, you are now ready to successfully expand your business abroad and find yourself a market with the perfect fit for your product or service and the Van Andel Global Trade Center (VAGTC) can help! Whether you are a company just starting to consider global expansion or have been at it for a few years, VAGTC can help you go global or expand into new markets. With funding opportunities available for small and medium-sized businesses from the Michigan Economic Development Corporation (MEDC) through the Michigan State Trade Expansion Program (STEP), there is no better time than now to start or expand your export operations!

For more specialized information on expanding your business internationally and getting connected to the MEDC and STEP, schedule a consultation with the Van Andel Global Trade Center to answer any questions and get connected.

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ABOUT THE CONTRIBUTOR

Natalie Bremmer is a Student Assistant at   GVSU’s Van Andel Global Trade Center . She is a Senior currently pursuing an undergraduate degree in Finance, Human Resource Management, and General Management at Grand Valley State University. She enjoys lifting weights, getting lost in a good video game, spending time with friends, and going on long hikes.

Edited by Parker Mackey, a student assistant at the Van Andel Global Trade Center. 

Original publish date 5/18/2023 - Updated 2/8/2024

Categories: Export
Posted on Permanent link for Three Key Considerations for Successful International Expansion on February 8, 2024.



Permanent link for Reaching Global Markets: A Small Business Guide to Funding Exports on February 8, 2024

How can small businesses grow their customer base and increase profitability? Export!

When local markets are facing tough times or simply not bringing in enough revenue, the next step in expanding a small business and increasing revenue is to start exporting goods to access new global markets.

Common Concerns about Exporting

Exporting, however, may seem quite daunting and expensive to the inexperienced individual. Fortunately, there are several financial resources, mentors, and consultants available for small businesses to utilize to create an export strategy and set up export operations unique to their business needs.

Setting up and maintaining export operations does require an investment of both time and money, but with 95% of the world’s consumers outside of the U.S., it has the potential to turn into a profitable investment. If traditional bank financing doesn’t fit your business needs, there are different types of loan programs that help in setting up and/or maintaining export plans and provide alternatives to traditional loan options to fund export endeavors.

Export Programs

Programs funded through the U.S. Small Business Association (SBA) that small businesses should be aware of include: 

SBA loans are provided through banks, but SBA guarantees a substantial portion of the loan – up to 90% – making it more likely to get accepted than a traditional, non-SBA-backed loan.

State Trade Expansion Program (STEP)

One of the most easily accessible financial assistance options available for exporting is the STEP program.

The State Trade Expansion Program (STEP) is a completely different category than the other loan program since technically it’s not a loan at all. Though the money given to the state government is awarded by SBA, it is ultimately the individual state’s economic development department that distributes these funds– no repayment is required.

State-level STEP assistance helps small businesses:

  • Learn how to export
  • Participate in foreign trade missions and trade shows
  • Obtain services to support foreign market entry
  • Develop websites to attract foreign buyers
  • Design international marketing products or campaigns

Roughly 46 of the 50 states were awarded STEP funds, including Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgie, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Michigan’s STEP program, MI-STEP, administered by the Michigan Economic Development Corporation, offers export assistance that covers up to 50% of export-eligible expenses. For more information on MI-STEP, check out our blog article Michigan Small Businesses Are Missing Out on Free Money: Why You Should Take Advantage of MI-STEP .

Coverage rates and total assistance varies by state, check your state’s STEP policy for exact export assistance information.

International Trade Loan Program

The most expansive of these would be the International Trade Loan Program. Companies can be approved to borrow a maximum of $5 million through this program with a processing time of roughly 5 - 10 business days.

These loans are available to help small businesses enter international markets and compete with businesses already present in the market. It works by combining fixed assets, working capital financing, and debt refinancing for the maximum amount of assistance.

Export Working Capital Program

The Export Working Capital Program is similar to the International Trade Loan Program in that there is a $5 million maximum borrowing limit and 5 - 10 day processing time, but the purpose is slightly different.

People applying for this loan already have a finalized sale or export contract in hand and just need the extra funds to seal the deal. This venture is ultimately a bit less risky than going into a market blind – like the prior program – which makes the approval process easier.

Export Express Loan Program

The Export Express Loan Program allows small businesses to get loans accepted within 36 hours with the trade-off of only being able to borrow $500,000 or less.

The reason turnaround time is so quick is that Export Express lenders can directly underwrite a loan without SBA prior approval.

Meet Your Export Mentors

For businesses interested in learning how to export their goods and explore funding opportunities and resources available for this endeavor, GVSU’s Van Andel Global Trade Center along with state and federal partners from the Michigan Economic Development Corporation (MEDC)Michigan West Coast Chamber of CommerceU.S. Department of Commerce - Grand RapidsMichigan Small Business Development Center, Export-Import Bank of the United States, Networks Northwest, U.S. Small Business Association (SBA), and more, are offering four opportunities to join us for our New to Export Workshops throughout the state of Michigan in 2024, visit our event page for dates and details!

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Natalie Bremmer is a Student Assistant at GVSU’s Van Andel Global Trade Center . She is a Junior currently pursuing a Bachelor in Business Administration degree in Finance, Human Resource Management, and General Management at Grand Valley State University. She enjoys lifting weights, getting lost in a good video game, spending time with friends, and going on long hikes.

Originally published 12/14/2022 - Updated 2/8/2024

Categories: Export MEDC
Posted on Permanent link for Reaching Global Markets: A Small Business Guide to Funding Exports on February 8, 2024.



Permanent link for The United States Mexico Canada Agreement (USMCA): Discovering North American Trade Opportunities in the Modern Era on October 16, 2023

In the ever-evolving landscape of global trade, staying informed about free trade agreements is essential for businesses looking to expand their international operations and seize new opportunities. One such significant agreement that has reshaped North American trade dynamics is the United States-Mexico-Canada Agreement (USMCA). For business professionals engaged in trade activities with Canada and Mexico, understanding the rules and provisions related to the USMCA is paramount. In this blog, we'll delve into four key provisions included in the 2020 update to the USMCA and the implications for North American commerce.

Modernizing Trade for the Digital Age

The USMCA, often dubbed NAFTA 2.0, was designed to adapt to the digital economy that has evolved since the original agreement took effect in 1994. The accord places a strong emphasis on digital trade, data protection, and e-commerce, creating a favorable environment for companies operating in these domains. Business professionals can capitalize on the increased digital trade provisions to expand their online presence, engage in cross-border e-commerce, and tap into a wider consumer base.

Navigating Rules of Origin and Market Access

Understanding the intricate rules of origin within the USMCA is vital for organizations seeking to maximize the benefits of the agreement. The new rules lay out specific criteria pertaining to Tariff Shift and Regional Value Content (RVC) rules, that products must meet to qualify for preferential tariff treatment. Preferential tariff treatment provides improved market access, allowing U.S. businesses to continue trade with Mexico and Canada with reduced tariffs and barriers. Meeting the standards of the USMCA allows businesses to maximize the benefits and succeed in their North American trade initiatives.

New Automotive Rules to Fostering Regional Growth and Fair Trade

The USMCA also brought about substantial changes in automotive rules within the region. One key alteration was the increase in the regional value content (RVC) requirements, mandating a higher percentage of vehicle components to be sourced from the region while eliminating loopholes used to undermine RVC thresholds. This shift aimed to incentivize the use of North American materials and labor, promoting economic growth and job creation within the member countries.  Additionally, the USMCA implemented rules promoting higher wages for auto workers, seeking to level the playing field and discourage outsourcing of production to lower-wage countries. These changes signify a reformed approach to automotive trade, emphasizing regional cooperation and fairness in the industry.

Strengthened Labor and Environmental Standards

Unlike its predecessor, the USMCA places more robust labor and environmental standards at the forefront of the agreement. This shift resonates with the growing global focus on sustainable and responsible business practices. For organizations participating in global trade, this means aligning business operations with these elevated standards to ensure compliance and create a more equitable work environment for all. Moreover, these standards can present opportunities for collaboration and innovation in sustainable technologies and practices.

Learn More about the USMCA

In conclusion, the USMCA has significantly modernized the North American trade landscape, offering both challenges and opportunities for businesses engaged in North American commerce. For organizations involved in trade with Canada and Mexico, it's crucial to know the rules of USMCA to make informed decisions that align with your company's growth objectives.

To delve even deeper into the nuances of the USMCA and maximize the benefits of trade with Canada and Mexico, we encourage you to attend our upcoming training session: The Basics of USMCA . Industry experts, Jean-Marc Clement, Principal at Clement Trade Law, and Mark Bleckley, Associate Director at GVSU’s Van Andel Global Trade Center will provide comprehensive insights into the applicable rules, equipping you and your business with the knowledge needed to leverage its advantages effectively. Generously sponsored by Clement Trade Law and Supply Chain Solutions you don't want to miss this opportunity to enhance your expertise and expand your knowledge of the USMCA!

Learn more about the upcoming Basics of USMCA training here

Categories: Export FTAs Import USMCA
Posted by Katherine Dreyer on Permanent link for The United States Mexico Canada Agreement (USMCA): Discovering North American Trade Opportunities in the Modern Era on October 16, 2023.



Permanent link for U.S. Extends Section 301 Tariff Exclusions: What You Need to Know on September 7, 2023

In a recent announcement on September 6, 2023, the Office of U.S. Trade Representative Katherine Tai revealed that the expiration date for the Section 301 tariff exclusions has been extended. Originally set to expire on September 30, 2023, these exclusions will now remain in effect until December 31, 2023, as reported by Reuters. This decision impacts a wide range of Chinese imports. Here, we break down the key details you should be aware of regarding these tariff exclusions.

Impact on Imports

The continuation of these tariff exclusions impacts a total of 352 Chinese imports and 77 categories related to COVID-19 are affected. The categories encompass an extensive range of products, including industrial components like pumps and electric motors, automotive parts, chemicals, vacuum cleaners, and critical medical supplies such as face masks, gloves, and sanitizing wipes.

Understanding Section 301

To comprehend the context of these tariff exclusions, it's essential to understand the legal framework behind them. These exclusions are rooted in Section 301 of the Trade Act of 1974. This legislative provision empowers the President of the United States to impose tariffs on imports from countries engaging in unfair trade practices. The Office of the United States Trade Representative (USTR) is tasked with the authority to conduct investigations and take necessary actions to protect U.S. rights under various trade agreements, as outlined by the Congressional Research Service.

Origins of the China 301 Tariffs

The origins of these tariffs can be traced back to actions taken in 2018 and 2019 when former U.S. President Donald Trump imposed tariffs on a wide array of imports from China, totaling around $370 billion. These tariffs were implemented following a comprehensive Section 301 investigation. The investigation revealed that China was involved in the misappropriation of U.S. intellectual property and was pressuring U.S. companies into transferring sensitive technology.

These findings prompted the U.S. government to take action to address trade imbalances and unfair trade practices with China. (Source: White & Case)

In conclusion, the extension of the Section 301 tariff exclusions underscores the ongoing efforts of the United States to rectify trade imbalances and address unfair practices, particularly with China. Stay tuned for updates as the situation evolves.

Categories: China Export Import Sanctions
Posted by Katherine Dreyer on Permanent link for U.S. Extends Section 301 Tariff Exclusions: What You Need to Know on September 7, 2023.



Permanent link for Big Changes Are Coming: Huge Drop in the Monthly U.S. Trade Deficit on June 15, 2022

by Natalie Bremmer 

Big news rocked the trading world recently with the announcement of the monthly goods and services trading deficit dropping a staggering 19.1% for the United States.

April 2022’s numbers were just released on June 7th, 2022 stating that the $107.7 billion trade deficit from March 2022 had dropped by $20.6 billion down to $87.1 billion in April 2022.

More specifically, U.S. April exports were $252.6 billion, roughly $8.5 billion more than March, and about a 3.5% increase between those two months. U.S. April imports were $339.7 billion, which is a $12.1 billion or 3.4% decrease from the previous month of March.

Year-To-Date

Though April was a great month, in the big picture the United States is still feeling the effects of the Covid-19 pandemic. Between April 2021 and April 2022, the goods and services deficit increased by 41.1% totaling $107.9 billion.  This is essentially due to exports increasing by 18.8%, coming in at $151.3 billion, and imports simultaneously increasing by 24.3%, totaling $259.2 billion within this timeframe.

Three Month Trends

On a more positive note, the U.S. three-month trade deficit average is starting to look a lot more promising. Between February 2022 and April 2022, the average goods and services deficit fell by $0.3 billion, down to a total of $94.3 billion. During this time period, U.S. exports increased by $8.3 billion for a total of $242.2 billion, and imports increased by a marginal $8.0 billion totaling $337.4 billion.

Monthly Export Trends

In April 2022, the U.S. export of goods increased by a substantial $6.1 billion to a total of $176.1 billion. The largest portions of this increase came from industrial supplies as well as food and animal feed, accounting for about $4.5 billion combined. Another large portion of the increase was due to the export of capital goods– namely civilian aircraft.

During the same month, the U.S. export of goods also increased by roughly $2.4 billion, totaling at $76.5 billion. The main categories that caused this increase were travel and transport which increased by $1.5 and $0.3 billion respectively.

Monthly Import Trends

In April 2022, U.S. imports of goods actually decreased in comparison to the prior month by $13.0 billion, with a sum of $283.8 billion for the month.

Some of the largest contributors to this decrease were consumer goods, industrial supplies, and capital goods which all decreased by $6.3, $5.4, and $2.6 billion respectively. However, U.S. imports of automotive vehicles rose by roughly $1.4 billion.

Alternatively, the import of services during the same month increased by $0.9 billion compared to the month prior, capping out at $55.9 billion. The largest contributors to this increase were travel, with a $0.6 billion dollar increase, and other business services at $0.2 billion.

For the full report, you can find the U.S. Census post here.

Keep up with VAGTC’s Trading Thoughts Blog for additional updates covering the trade deficit information released in July.

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Natalie Bremmer is a Student Assistant at   GVSU’s Van Andel Global Trade Center . She is a Junior currently pursuing undergraduate degrees in Finance and Human Resource Management at Grand Valley State University. She enjoys lifting weights, getting lost in a good video game, spending time with friends, and going on long hikes.

Categories: Export Import
Posted on Permanent link for Big Changes Are Coming: Huge Drop in the Monthly U.S. Trade Deficit on June 15, 2022.



Permanent link for Michigan Small Businesses are Missing Out on Free Money: Why You Should Take Advantage of MI-STEP on April 20, 2022

by Natalie Bremmer

Michigan Economic Development Corporation's MI-STEP

The Michigan Economic Development Corporation (MEDC) oversees Michigan’s State Trade Expansion Program (MI-STEP) to give financial assistance to small businesses to pursue exporting their products and gain access to larger global markets.

They have roughly $2.667 million worth of aid to give out to small businesses across the state. Up to 75% of pre-approved exporting expenses can be covered with a $15,000 maximum per business in a fiscal year when the Michigan company follows the MI-STEP eligibility criteria.

This program makes entering or expanding in new global markets viable for small or medium-sized businesses eager to expand while accommodating a more limited budget.

MI-STEP may seem confusing at first glance, so here are its three main objectives:

  • Increase amount of small and medium-sized businesses in Michigan that participate in exporting
  • Grow the dollar value of Michigan exports
  • Provide an avenue for Michigan small businesses to explore new trade opportunities

The eligibility criteria to secure aid from this program include:

  1. Being in accordance with SBA standards
  2. Demonstrate understanding of export costs and business with foreign markets; including freight forwarding, packing, shipping, and customs brokers
  3. Show potential for successful exporting as well as a positive impact on the regional economy
  4. Provide an EIN number that is linked to a Michigan address
  5. Must be in good standing with the Michigan Department of Treasury as well as any other regulatory agencies
  6. Must be a U.S. company that is prepared to export goods of U.S. origin with a minimum of 51% U.S. content

Once a business gets this aid, there are particular transactions that will be covered by MI-STEP funds. These include but are not limited to:

  • Participating in foreign-trade missions
  • E-commerce fees for advertisement and website design
  • Participation in international trade shows
  • Foreign sales trips (up to two people on an economy flight)
  • EXIM export credit insurance premiums
  • Participation in export training workshops

One company that benefitted greatly from an MI-STEP award was Armor Protective Packaging: a rust removal company that specializes in making clean, safe, and easily used vapor corrosion inhibitor packaging. Through MI-STEP, they were able to expand to provide to 90% of the Fortune 500’s industrial companies as well as several other countries across the world. More specifically, MI-STEP helped this company with having the funds to create a local website translated and customized for the different languages and cultures of the specific countries they were selling to– effectively expanding their digital footprint. They were also able to travel to some of these countries to network and secure international business partners which was another huge step for them to reach their global markets.

GVSU's Van Andel Global Trade Center

The Van Andel Global Trade Center is an easily accessible resource with various export training programs and workshops that are eligible for MI-STEP coverage that teaches small businesses how to find success similar to how Armor Protective Packaging did. VAGTC’s incredibly knowledgeable team has been working with businesses across Michigan for over two decades in both one-on-one and group settings– entirely depending on their clients' needs. Throughout their time at GVSU they’ve worked with over 10,000 companies and have assisted more than 31,000 business professionals. Not only do they have a wealth of experience with exporting, but they also assist companies of all sizes with importing concerns.

VAGTC consults with companies in the following areas:

  • Exporting/Importing
  • Export & Import Procedure Manuals
  • Compliance (export and import)
  • Free Trade Agreements such as USMCA
  • Global Supply Chain Logistics
  • Export Controls Training: ITAR & EAR
  • Cultural Training
  • Market Research
  • Foreign-Trade Zones
  • Global Risk Factors
  • Harmonized Schedule/Classifications, Export Control Classification Numbers
  • and more!

Their website has a variety of helpful resources like guidebooks, available programs, trade zones, and Worldwide Credit Reports. VAGTC memberships are also available for discounts on workshops and more individualized assistance.

With an ever-expanding global market, there has been no better time to enter it than right now. Check out MEDC's MI-STEP website with full details on the program and begin taking full advantage of all that MEDC has to offer! Companies can also learn more about VAGTC’s services and how we can get you connected to the MI-STEP program by contacting us today! Now is the time to grow your small business through increased export sales, let us help!!

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About the Author

Natalie Bremmer is a Student Assistant at  GVSU’s Van Andel Global Trade Center . She is a sophomore currently pursuing an undergraduate degree in Finance and Human Resource Management at Grand Valley State University. She enjoys lifting weights, playing video games, spending time with friends, and going on long hikes.

Categories: Export MEDC
Posted on Permanent link for Michigan Small Businesses are Missing Out on Free Money: Why You Should Take Advantage of MI-STEP on April 20, 2022.



Permanent link for What is the Harmonized System and Why is it Important? on April 8, 2022

What is the Harmonized System (HS) and the HS Classification?

The Harmonized System (HS) is a globally recognized way to identify goods being imported and exported by assigning a standardized classification. The HS classification is used for declaring goods at the time of export in export declarations and for the purpose of filing customs entries at the time of import in the country of destination. The HS classification is used to determine duty rates and collect duties, taxes, and fees for the imported products.

The Harmonized System (HS) is something every importing and export company will need to understand so proper HS classifications can be assigned to their products. Companies need to take great care in assigning HS classification and understand the compliance risks associated with their HS classification decisions.  Exporters and importers alike have a legal responsibility to properly claim and classify goods/products.

The Harmonized System (HS) Breakdown

The Harmonized System (HS) is a very structured classification system made up of sections, chapters, notes, headings, and subheadings.

The United States has two published versions of the Harmonized System (HS).  For imports, the U.S. publishes the Harmonized Tariff Schedule (HTS) of the U.S. for the HS classification of imported products and the assignment of duty rates.  For exports, the U.S. publishes the Schedule B for export HS classifications and the collection of statistical data.

The Harmonized System (HS) is broken down into 22 sections which act as groupings of similar chapters.

There are 97 chapters of products that are organized from least manufactured to more manufactured and logically group classifications by make or by use. The first two digits of each HS classification are the chapter number. Within each chapter, the Harmonized System (HS) provides a four-digit heading with the primary legal definition of what is to be included in that heading.  Those headings are further broken down into six-digit subheadings. The heading and subheading legal definitions are universal and all countries agree to use the same legal definitions.

While the globally recognized headings and subheadings remain constant, each country can further break down the subheadings with country-specific suffixes. In the U.S. two digits (digit 7 and 8) are added as the duty rate suffix and two digits (digit 9 and 10) are added as a statistical suffix – making the U.S. classification a 10-digit number.
See the photo above for an example using Coffee.

Why is HS Classification Important for your Business?

First of all, for importers, the HTS classification determines the duty rates and the duties paid at the time of import so it has immediate revenue implications. Non-compliance can result in fines, penalties, and the back payment of additional duties owed.

Paying duties is a non-negotiable, so proper classification can reduce your compliance risk in the short and long run. The result will never be good when using the wrong classification. If your misclassification caused you to overpay in duties, you won’t receive a refund. If you are underpaid in duties, you are required to pay the difference, and customs will decide if you will need to pay interest, and whether or not fines and penalties will be imposed.

For exporting, HS classification is used in:

  • Export documentation (ex. Commercial Invoice)
  • Export Declaration
  • Import customs entry in a country of destination

For importing, HS classification is used in:

  • Customs and Border Protection (CBP) for customs clearance and entry

All in all, use the HS classification to your advantage. Generate proper classifications and importing and exporting will be smooth sailing.

Are You Interested in Learning More? 

GVSU's Van Andel Global Trade Center offers a yearly Fundamentals of Harmonized System (HS) Classification Training. Check out our Events page to register for this upcoming event!

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About the Contributor

Jenna Hoover is working as a student assistant for GVSU’s Van Andel Global Trade Center. She is a junior at GVSU currently studying Finance and Supply Chain Management within the Seidman College of Business. You can find her visiting local coffee shops as she studies for classes or checks in on her Roth IRA. In her free time, she enjoys walking her dog, Gertrude, and hanging out with friends along the beautiful beaches of West Michigan.

Categories: Export Harmonized Tariff Classification Import
Posted on Permanent link for What is the Harmonized System and Why is it Important? on April 8, 2022.



Permanent link for Harmonized System Updates Your Company Needs to Know on October 27, 2021

The 7th edition of the Harmonized System (HS) nomenclature will enter into force on January 1, 2022.

Why is this important to your business?

The Harmonized System (HS) nomenclature allows for goods to uniformly be imported and exported to/from countries around the globe, 211 economies participate in this system. The Harmonized System allows for customs tariffs international trade statistics to be tracked and reported as goods flow throughout the global supply chain.

The 7th edition of the HS will include 351 amendments to the current system according to the World Customs Organization.   

Some of the major changes include classifications that deal with advancing technology, health & safety equipment, and society protections.

Advancing Technology

Technological advances are occurring daily. Thus, current heading classifications and provisions are not able to properly track new technology that is being created and traded around the world. Updated 2022 HS provisions and classifications will include e-waste, tobacco products, drones, smartphones, and other multifunctional devices.  

Health & Safety Equipment

Recent years have highlighted the need for a quicker and more streamlined way to deploy tools that help diagnose and treat infectious diseases. Classification for these tools has been simplified and provisions have been put into place in the 7th edition for supporting medical research occurring on a global scale.

Protecting Society from Dual-Use Goods

The World Customs Organization has increased its efforts to combat world terrorism. Subheadings within the HS have been created for dual-use goods that could potentially be converted to an unauthorized use product such as an explosive device.

Conventions & Clarifications

A number of goods controlled by global Conventions such as chemicals controlled under the Chemical Weapons Convention and the Rotterdam Convention to name a few, have also been updated and reflect clarifications of verbiage to ease the process in classifying products correctly.

Van Andel Global Trade Center recommends companies review the United States HS for 2022 and be ready for any changes that may be implemented on January 1, 2022, that could impact the products your business buys and sells globally. Communicate 2022 changes to suppliers, export customers, dealers/distributors, customs brokers, and international freight forwarders. In some cases, it may be beneficial to obtain binding rulings from Customs to ensure there are no issues/delays moving goods around the world.

The official announcement from the World Customs Organization of amendments effective January 1, 2022, can be found here.

Categories: Export Harmonized Tariff Classification Import
Posted on Permanent link for Harmonized System Updates Your Company Needs to Know on October 27, 2021.



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