In today’s interconnected global economy, rapidly changing legislation in response to political and socio-economic shifts presents businesses with an increasingly complex landscape of customs regulations, tariffs, and trade compliance requirements. Efficiently navigating these challenges is essential for companies aiming to minimise delays and reduce costs in their international supply chains.
The importance of regular ‘health checks’
Given the complex and dynamic nature of global compliance requirements, it’s increasingly important that importers and exporters are putting in place strategies and technologies designed to streamline customs processes, ensure regulatory compliance, and optimise the movement of goods across borders. With an ever-evolving global trade environment, staying ahead of these changes is critical for maintaining competitive supply chains.
Changes in the US
Recent years have witnessed significant shifts in the United States’ tariff structure, driven by political and trade developments. Tariffs have impacted trade relations with key partners such as China and Japan as well as the European Union. Many nations have responded by diversifying export markets or challenging US tariffs through the World Trade Organization. More recent regulatory updates include stricter customs requirements for goods entering the US with vague cargo descriptions or insufficient information, rendering customs entries subject to rejection. Since September 2024, the US Customs and Border Protection agency (CBP) has enforced these standards for Air Cargo Advanced Screening (ACAS), requiring precise data to facilitate entry into, or transit via the US.
Implications of political changes
Following the recent US presidential election, new tariffs have been proposed, impacting trade with Mexico, Canada, and China, with a 25 percent tariff on imports from Mexico and Canada and an additional 10 percent tariff on Chinese imports being suggested by the incoming administration. Potential future actions may extend to the UK and Europe, adding further complexity and considerations to global supply chain planning from/to the US. Additional regulatory priorities include:
-Expanding export controls on advanced technologies, particularly semiconductor manufacturing equipment.
-Imposing stricter export licence denials for goods involving China.
-To mitigate the impact of tariffs, manufacturers are advised to evaluate their supply chains for dependence on imports from countries subject to tariffs.
-Diversification of sourcing strategies and exploration of alternative markets should be considered to minimise exposure to trade disruptions.
The Lacey Act
The Lacey Act serves as a prime example of how customs regulations are becoming increasingly intricate. Amended in 2008, it plays a pivotal role in regulating US imports of wildlife, fish, and plants and has had profound impact on global trade of such products. By holding importers responsible for ensuring the legality of their sources, the Act has increased pressure on exporting countries to implement and enforce sustainable practices. Kelly Morrison, Corporate Licensed Holder at Woodland Group, advised: “It’s vital that you know your products and what laws govern the global distribution of all of them. And that these laws can change and differ by country.”
Looking ahead
As regulations inevitably continue to change and evolve, global governments are expected to assess regulations in the following areas:
Green Trade and Sustainability Initiatives – As environmental concerns gain prominence, governments and businesses are focusing on “green trade” policies that incentivise sustainable practices. These initiatives include carbon border taxes, sustainable supply chain certifications, and reduced tariffs for environmentally friendly products. Businesses must adapt to these standards to remain competitive and compliant.
Data transparency and digitalisation – Blockchain, AI, and cloud-based platforms are increasingly being leveraged to streamline border operations, reduce fraud, and enhance security. These developments demand that businesses invest in digital readiness and data-sharing capabilities to navigate customs smoothly.
Ethical sourcing standards – Heightened scrutiny around human rights violations, including forced and child labour, has led to stricter sourcing regulations. Governments are implementing import bans on goods linked to unethical practices, requiring companies to demonstrate robust supply chain due diligence and ethical sourcing standards.
Changes to regional trade agreements – The global trade landscape is continually evolving with updates to regional agreements such as the CPTPP and USMCA. These changes can significantly alter market access, rules of origin, and tariff benefits, requiring businesses to adapt strategies to align with shifting trade dynamics.
Continued increase in customs audits and enforcements – Customs authorities are ramping up audits and enforcement actions to ensure compliance with trade regulations. Businesses face greater scrutiny on valuation, classification, and adherence to trade agreements, underscoring the need for strong internal compliance programmes.
Tariff adjustments and retaliatory tariffs – Geopolitical tensions continue to influence tariff policies, with countries implementing or adjusting tariffs in response to trade disputes. Businesses must stay agile, monitoring these developments and adjusting pricing, sourcing, and supply chain strategies to mitigate risks and costs.
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