Tariff engineering has two aspects to it:
- What is being imported (let's call this 'classification')
- What is the value of the importation
Together, usually you will have a certain percentage applied to the value, and that will equal the tax that has to be paid as a tariff.
However, there are numerous tariff classifications that could change, depending upon the form in which a product is imported, and there are various ways to appraise the value of an importation, which can be structured accordingly to reduce the amount to the extent possible and thereby lower the tariff rate. This is what tariff engineering is all about.
Most recently, rather than hiring experts in tariff engineering, some importers simply declared fictitiously low values and used the device of shell companies which disappear when the Customs Service issues a civil penalty or even makes allegations of criminal violations of smuggling. Consignees figure that they have no liability when doing business with such unscrupulous traders, but both the Customs Service and bonding companies are wise to these fraudulent schemes and are reaching out to the involved consignees. Therefore everyone touching this merchandise in B to B transactions must be aware that only tariff engineering can help them ameliorate the magnitude of the Trump tariffs!