GHY International Trade Uncertainty and Tariffs Understanding the New Realities

Trade uncertainty and tariffs are impacting Canadian businesses like never before as manufacturers are having to suddenly deal with a new reality. 

Even when tariffs were in place back in the 1980’s, they were not as prohibitive or as varied as they are today, says  Alan Dewar, Executive Vice President at  GHY International, a leading trade and brokerage services provider that offers acclaimed support and guidance to North American companies that trade internationally. 

What is a tariff? A tariff is a tax or duty that is imposed by a government on imported or exported goods. 

“A tariff is supposed to protect domestic industries, it’s supposed to generate revenue, and it can be used in retaliation or trade negotiations,” says Dewar, who notes that until recently most things entering Canada have been duty-free. “We’re in an entirely unchartered territory right now.”

Increasing costs and rapid change 

The new tariff regime is changing things rapidly and companies are incurring costs that they’ve never seen before. 

“There is just a lot of uncertainty right now,” says Dewar, who oversees business development and regulatory affairs for the Winnipeg-based firm, which was established in 1901. “The whole cost of cross-border trade is escalating, and things are changing all the time.” 

In April, Dewar was at a conference in Phoenix. One of the keynote speakers was talking to brokers about trade and market uncertainty when U.S.-imposed tariffs on China increased. Even though he had fresh material when he started speaking, he had to change content midway through

“We’re having to adapt to things on the fly – that’s the world we’re living in right now,” says Dewar. 

It is important to work with a trade advisor who can explain the changing landscape and what it means for your business. That can be a customs broker, management consultant or a lawyer,  but it’s critical that it be someone knowledgeable about the import process. While companies have often worked with brokers on a transactional basis, now every sale needs to be looked at through a regulatory and legal lens first. 

There is just a lot of uncertainty right now, the whole cost of cross-border trade is escalating, and things are changing all the time.

Determining importer of record 

Because tariffs are largely a new challenge, there are a lot of misconceptions from importers. The most important piece is understanding who the importer of record is. That’s the party that bears the responsibility for declaring goods to customs. If you’re exporting something, Dewar strongly recommends that you shouldn’t be the importer of record as the liability lasts a long time, even after the product has been sold. 

How your goods are classified is another important factor to determine if tariffs apply to your product and, if so, at what rate.“It’s really important to step back and look at how your goods should be classified,” says Dewar. “Tariffs are as much of an art as a science sometimes.”

Keep up to date on new developments 

GHY has introduced a new, interactive tariff tracker on its website to keep people informed with real-time updates on the latest trade developments. The tracker lists the tariffs that have been imposed, the effective date and the amounts. 

“This is changing by the day,” he says, noting that this trade uncertainty isn’t expected to change anytime soon and likely not for the duration of the current U.S. administration. 

To navigate this period of volatility, Dewar says collaboration is critical. He says it’s important to be part of groups like the Agricultural Manufacturers of Canada (AMC), which can provide important connections and networking to hear about new opportunities and markets. 

“Groups like AMC have a voice politically and that voice can position you for lobbying or different types of relief,” says Dewar. “You need to have a united voice and strengthen relationships so you can work together in these uncertain times.