A Letter from KRIEGER Worldwide President, Robert Krieger, as we head into 2025!

Everyday, we are all bombarded by the looming news of tariffs. One day, it’s 10% from one country; the next day we hear it may be 100% . It seems like we won’t even know the start date, until the tariffs start, or shortly before they start. What do we do? How can our businesses survive? How can we thrive in such an environment? While we can’t guarantee that the measures that I’m outlining below will be a “silver bullet” that ameliorates or fixes everything that looks like will potentially happen in regards to increasing tariffs in 2025, I believe some of our suggestions might get you thinking more about your own circumstances and businesses.

Diversify?

First, kudos to those of you who were able to diversify your supply chain in the last few years. While threats exist against a diverse group of foreign origins and products, having a diverse supply chain has mostly proven to be a good thing. It’s possible, but unlikely that the same tariffs will be enacted against all foreign countries without some of them caving to U.S. demands of various sorts. Either way, you and/or your competitors are likely to face higher tariffs on some goods, with possible concentrations on goods that originate in China. So here’s what we know…

Tariff increases could be announced as early as inauguration day, and implemented shortly thereafter. You might ask, is this legal? In the short term, it probably doesn’t matter. Are you prepared for this? Are your clients or customers prepared? Here are some suggestions:

Review with us your classifications, your terms of purchase and valuations. We may find that there are lower valuations and tariff rates with lower duty rates on your products.

Prepare for tariffs (USMCA, CAFTA, and possibly other Free Trade countries) or increased tariffs from many other countries.
So let’s make an action plan!

The CFO/Controller/Treasurer/etc. needs to be an important part of your preparation. Involve them now! Make sure your financial statements are available (and updated). *More on this to follow below*
Notify your company’s investors, shareholders, and owners of what might be happening. Notify your bankers (have lunch with them). Make sure your company has the cash to pay the duties.
If you don’t have your own ACH account, apply for one quickly, we will help you!
If you have an ACH account and are not using periodic monthly statements, apply for one. We will help you!
Note, It is our policy not to pay duties on behalf of our customers. We will only do so with an advanced arrangement and will charge an advancing fee for this if we agree on this path.
Be prepared for supply chain issues. These include delays and higher rates. While we can’t pinpoint exactly when this will occur, it is likely to occur if/when everyone wants to land goods before tariffs take effect. Consider using air freight, accelerated ocean freight (when available), sea/air services, air/sea services and more.
Be aware of the still potential ILA actions on the East and Gulf Coasts.
Be aware that the steamship companies have announced a change in their alliances beginning in February. Historically, the alliances changes have caused service disruptions.
Be prepared to get a new customs bond if your duties increase. This will vary based on your bond rewards date, the seasonality of your imports, the ability (or lack thereof) of CBP to provide you with a timely notice that your bond will be maxing out. Depending on the financial status of your company, and the amount of the new bond, you may have to provide financials to insurance companies. In some cases, they may want a cash deposit, line of credit, or other financial insurance to get the new bond. So if CBP notifies you that your bond amount is inadequate, you will be able to move smoothly and swiftly to get your new bond. If your bond becomes inadequate, your imports will be shut down and this could happen quickly!

In conclusion, we are here to help you! Plan for the worst, hope for the best. Most importantly, have a plan! All of us at Krieger Worldwide are happy to assist you!

Best,
Robert Krieger

KRIEGER Worldwide will continue to monitor current events and trends within the logistics industry and keep our clients informed of breaking news, insights, and opportunities. Our experts are ready to answer any questions you have and offer solutions to even your most challenging logistics needs.

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