Duty Drawback Analysis Saves $3m+ for Automotive Client

Section 301 tariff exemptions created additional value for our client

Crane Worldwide Trade Advisory Services recognize tariff exemptions under Section 301

Our Automotive client was heavily impacted by Section 301 tariffs, which have been applied to imports into the United States of America on automotive parts sourced from China. The significant increase in purchasing costs became a financial burden to the client, impacting not only cash flow but also bottom-line results.

The Challenge

The China-USA trade war that commenced in July 2018 has resulted in significant tariffs being imposed on goods received from Chinese origin. Section 301 legislation, of the Trade Act of 1974, resulted in our automotive client struggling with increased costs when sourcing automotive parts from China. With a tumultuous international trade landscape for the foreseeable future, the supply chain challenges ahead for our clients were unpredictable, and a solution was required to identify how the impact of the increased tariffs could be addressed.

Our Solution

Crane Worldwide Logistics trade advisory experts set to work to analyze the Harmonized Tariff Schedule (HTS) of the automotive parts imported by our client. The team completed a full analysis of our client’s customs entries. Alongside our automotive logistics experts located in the Detroit station, the team identified potential harmonized tariff codes that could be exempt for our client’s Chinese sourced products. Duty drawback claims could be made to recover the additional costs that had already been paid.

“Changing tariff regulations under Section 301 heavily impacted our client. Analysis of HTS codes by our trade advisory experts allowed our automotive logistics client to recuperate over $3m in Duty Drawback.”

The Result

Using the in-depth HTS analysis provided by the Crane Trade Services team, Crane Worldwide Logistics identified that our client stood to recover $1.6 million through post summary corrections with CBP. With further analysis, another $1.7 million was classified under additional Harmonized Tariff Schedule codes that were eligible for Duty Drawback. This Duty Drawback recovery opportunity provided a solution to the client immediately and for future import requirements.

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