The federal administration announced reciprocal tariffs which impose a baseline tariff of 10 percent on all imports, effective April 5. A second layer of country-specific tariffs were supposed to take effect on April 9, but were paused temporarily.
About Tariffs
A tariff is a tax or duty imposed by a government on goods (not services, generally) brought into a country. The importing business pays this duty to its government. The business may then pass this cost on to the customer, even if there is a contract in place with an agreed upon price (treated in the contract as an unforeseen condition). If the university buys straight from a manufacturer, the university must pay the duty to the shipping company, such as UPS, FedEx, or DHL.
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 equipment imports may be eligible for a duty exemption. JAS can help departments apply for a duty exemption on scientific instruments or equipment if there is no similar product made in the United States.
- Before buying foreign-made scientific equipment, consult with JAS before you place your order. While you don't need to apply for an exemption when placing an order, you might find it helpful to do so. The process can be complicated and time-consuming.
- Application: Form ITA-338P, Request for Duty-Free Entry of Scientific Instruments or Apparatus
- Mail your completed application to the address for U.S. Customs and Border Protection on the form.
- 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.
External Resources
- Office of the United States Trade Representative: Presidential Tariff Actions
- Contains links to latest Annex schedules of tariff rates and a list of products
- Reed Smith: Trade Compliance Resource Hub
- Supply Chain Drive: Trump’s tariffs: Tracking the status of international trade actions
