CARM: What all importers need to know about CARM

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Duty drawback eligibility for goods subject to Trump tariffs

Here is what you need to know about imports into Canada, imports into the U.S. and U.S. tariffs on Chinese exports.

Imports into Canada

  • Goods imported into Canada from the USA and subject to the additional countermeasure duty may be recovered upon export under the following scenarios:
    • Same condition goods, i.e. goods imported and re-exported with no additional processing in Canada – 100% drawback available
    • Manufacture and re-export to USA/Mexico – under this scenario the goods are subject to a “lesser of” calculation, however, if the goods entered Canada with a valid NAFTA Certificate they will be subject to full drawback
    • Manufacture and re-export outside North America – goods subject to full drawback

Imports into USA

If you have imported goods into the USA, subject to Trump tariffs, and subsequently sold those goods for export, you may be able to recover the tariff paid upon import by way of a duty drawback claim.  Here is how that process works:

  • Merchandise is imported into the U.S..
  • Duties are paid on the merchandise.
  • Merchandise is resold and exported to a foreign buyer.
  • U.S. Customs refunds 99% of the duties previously paid.
  • Tariffs imposed against Steel and Aluminum (Section 232 Tariffs) are not subject to duty drawback upon re-export from the USA, however, those tariffs imposed on goods originating in China (Section 301 Tariffs which exclude the Steel and Aluminum Tariffs) may be recovered upon export.

U.S. tariffs on Chinese exports

The China tariffs have been issued in three stages, each of which qualify for duty drawback upon sale and re-export out of the USA:

List 1- $34 billion
List 2 –  $16 billion
List 3 – $200 billion

If imported goods were used in manufacturing or subjected to additional processing prior to export, different rules apply.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Quick Tip #5
Clarifying the limitations of Incoterms

Don’t make the mistake of assuming Incoterms define anything other than the terms of delivery. For example, Incoterms do not cover:

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