The European Union has recently announced a two-week delay on tariffs for US products, originally set to take effect in early April. This gives businesses more time to prepare for the expected price increases on products like bourbon, Harley Davidson motorcycles, and boats.
What are tariffs?
Tariffs are taxes paid by businesses importing goods, and these costs are often passed on to consumers, resulting in higher prices for certain products. The EU’s tariffs, introduced in response to US tariffs on European steel and aluminum, will impact businesses importing goods from the US.
What happens when products are listed in both Annex I and Annex II?
Some products are listed in both Annex I and Annex II of Implementing Regulation 2018/886. Annex II supplements Annex I, meaning the tariffs from both annexes must be added together. This applies, for example, to bourbon, which will now be subject to a 50% tariff (25% from Annex I and 25% from Annex II).
Why is this delay important?
The delay provides businesses with time to prepare for the expected impact and allows room for further negotiations between the EU and the US. The European Commission will vote on an extended list of affected products on April 13, and the tariffs will take effect 30 days later.
How can you minimize the impact of these tariffs?
One solution for businesses facing increased tariffs is the use of customs warehouses. Under this scheme, companies can store non-Union goods in approved locations under customs supervision. This allows businesses to delay paying import duties and other fees as long as the goods are not processed or sold within the EU.
What are the benefits of a customs warehouse?
- No import duties or other fees need to be paid.
- No obligation to comply with trade policy measures, unless the goods are entering or leaving the customs territory.
- Ability to use the warehouse as a distribution center, which can be cost-effective.
How to apply for a customs warehouse license?
Businesses wishing to use a customs warehouse must apply for a license via the EU Trader Portal. The application requires businesses to meet administrative and management conditions set by Customs. Applying for a customs warehouse license requires good preparation and expert expertise, which our consultants will be happy to assist you with.
