PwC Clients Getting Some Trade War Relief Through Exclusions, Customs Value Structuring

Although PricewaterhouseCoopers expects trade will not return to normal with China for more than three years, experts on a Dec. 20 webcast said clients are mitigating increased tariffs through a variety of strategies, including lowering customs value, bonded warehouse use, modifying tariff codes and negotiating with suppliers or customers. "Probably 20 percent can be mitigated without making any changes to the supply chain," said Scott McCandless, a trade policy specialist for the firm.

American exporters to China also can find some relief, according to Sky Shao, a customs specialist. Shao said that while China's customs agency is giving heightened scrutiny to importers altering shipment values or Harmonized Tariff Schedule codes, the government is also granting more interim duty rate requests. Last year, 822 were approved, and this year so far, 948 have been accepted. "It's probably not a coincidence," he said. Shao said that in recent months, the Chinese government has twice increased the value-added tax refund rate for exporters, which can also offset higher taxes on imports. Maytee Pereira, a customs specialist, said no exclusions have been granted for Section 301 tariffs yet, but that PwC clients who have applied for exclusions to steel and aluminum tariffs have a more than 50 percent success rate.