The federal administration announced tariffs which impose a baseline tariff of 10 percent on all imports, effective April 5. As of Aug. 7, new tariffs on imports from more than 90 countries became effective. 

About Tariffs

A tariff is a tax or duty imposed by a government on goods (not services, generally) brought into a country. The business often passes this cost on to the customer. The business often passes this cost on to the customer. If buying straight from a manufacturer, the shipping company, such as UPS, FedEx, or DHL, may pay the duty to the government and invoice the customer for this additional cost.

Does a customer have to pay a tariff if they already have a contract?

Legal responsibility to pay a tariff will depend on whether the contract or quote:

  1. specifically address tariffs,  
  2. specifically addresses shipping and handling fees,
  3. specifically addresses reimbursable expenses related to a service that may also provide goods, and
  4. when the contract or quote was in force.  

If you have questions about how tariffs may impact your contract or quote, please contact the Financial Support Center.

Best Practices and Guidance

As the university navigates the changing landscape surrounding tariffs and their impact on procurement, it is important to safeguard Stanford’s resources and ensure their advancement of its mission. Below are some of the best practices for the Stanford community.

  • Leverage Stanford’s customs broker
    • When an international shipment is sent to Stanford, customs forms and fees as well as freight forwarding services will need to be provided by a customs broker. JAS, the designated customs broker for the university, will need to be paid directly for any of their services, plus duties or taxes. Schools or units should send a copy of the purchase order for the product that required clearance into the country to JAS to ensure prompt delivery and invoice processing for any import services. Contact Information for JAS (formerly TIGERS), phone: (650) 581-7230
  • Apply for duty (tariff) exemption when applicable
    • Scientific instruments or equipment imports may be eligible for a duty exemption if there is no similar product made in the United States. Please note that there is a higher volume of exemption requests due to the significant increases to the effective rates and scope of items that would be covered by the higher rates. This higher volume is causing a delay in processing the exemptions, in some cases, resulting in the purchaser being required to pay the tariffs to get the equipment first and attempt to claim a refund if and when the waiver is granted.
    • Stanford departments are responsible for completing the exemption application Form ITA-338P, Request for Duty-Free Entry of Scientific Instruments or Apparatus, and mailing the completed application to the address for U.S. Customs and Border Protection on the form. Departments are also responsible for paying the tariffs if equipment is needed before the exemption is processed and approved.
    • JAS can support standard paperwork handling in these cases, but cannot offer expert advice.
  • Validate supplier pricing and costs
    • Generally services are not subject to tariffs. If the supplier is providing services only, there needs to be additional justification for the added tariffs.
    • Never broadly accept any "tariff" without transparency. Departments can tell suppliers that the university is scrutinizing all claims of tariffs and is seeking partnership with suppliers to prevent all costs being passed on to the university.
    • If a supplier should indicate that they must charge tariffs, require them to provide proof. The supplier should provide you with the country of origin and composition for tariffed commodities for products being ordered. Documentation would demonstrate “Proof of Origin,” establishing that the goods being imported originate from a specific country or region. These documents may also be referred to as Certificate of Origin (CoO), a Declaration of Origin, Tariff Schedule, or Bill of Lading.
    • It is possible that while they did not provide this information on the quote to you they will have additional fees or "tariffs" related to shipping costs. Ask to see all shipping charges associated with the order and confirm all shipping deadlines.
    • In cases where a supplier indicates that final charges including tariffs will not be clear until the date of shipment due to the changing percentages, departments should plan on the tariff aligning with the current percentage (see resources below). In these specific cases departments could see less or more than the current percentage based upon the proof of origin country.
  • Make advance purchases to leverage pre-tariff inventory: Proactive ordering of goods that have a predetermined need and timeline for usage can support departments in paying less for goods that will be used in the future.
  • Confirm delivery timelines: One impact of tariffs can be a slower supply chain for imported goods. Additionally, suppliers faced with increased costs for imported goods may reduce their onsite inventories, which could limit their ability to provide on-demand fulfillment. Departments should confirm and document delivery schedules for orders and request periodic updates.
  • Tariff-Related Price Adjustments: Prior to Stanford agreeing to any tariff related price increase, the Contractor must provide documentation, satisfactory to Stanford, that:
    • Defines the products or raw materials used to furnish the goods or services under the agreement,
    • Identifies the applicable schedule of import duty or tariff to the stated products or raw materials, and
    • Demonstrates the Contractor’s payment of associated import duty or tariff for the stated products or raw materials. 

External Resources

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