As a Southern California-based customs broker and freight forwarder, Stephen Dedelo, co-owner and chief information officer of Dedola Global Logistics, finds himself on the front lines of the ongoing U.S.-China trade war.
The customs brokerage industry clears billions of dollars of imports that arrive in the U.S. from China each year. Most U.S. importers rely on customs brokers like Dedola Global to interface with Customs and Border Protection to clear their goods, pay any duties and maintain compliance with cross-border trade regulations.
The Trump administration first began imposing tariffs on Chinese goods in February 2018. Multiple rounds later, that tariff amount has compounded to an estimated $550 billion on Chinese products. China has retaliated in kind with its own tariffs on U.S. goods.
“The thing we’ve had to do more than anything else is to become much more acquainted with duties and tariff laws,” Dedola said during a FORUM Fireside chat with FreightWaves’ Sirius XM Host John Kingston at FW LIVE in Chicago on Nov. 13. “Before, we had customers that had been declaring their freight in a particular way for many years and haven’t had a reason to look at it.”
Dedola said this is where a customs broker’s experience and knowledge of the import industry pays off.
“Yes there is a problem, but how do we help our customers?” he said. “It’s an opportunity for customs brokers to come forward and be the hero for their customers.”
He said customs brokers “thrive on chaos” in cross-border trade.
“We’ve actually seen a boom in business because we’re able to offer our customers insights into how to do things that they really never had to worry about before, and that is on how they’ve been declaring their goods,” Dedola said. “Are they using the most advantageous classification? Usually this would be left to the customs broker.”
Before the wide-scale imposition of U.S. tariffs on Chinese goods, some imported products had little to no duties assessed on them, but now those duties may be 10-25% on the value of the imported goods.
“So now you have to dig deeper into the tariffs,” with the objective of finding classifications that are still correct but may be subject to lesser duties, Dedola said.
“There’s definitely this feeling that people are trying to educate themselves and to understand what their options are,” he added.
Since the U.S. tariffs have been in place, Dedola has not seen a major shift away from China as a source of U.S. imports for his customers, although some larger companies are exploring manufacturing in Vietnam and Malaysia.
In July, Dedola visited his company’s Shanghai office. He said the Chinese people feel like they’re being attacked because the U.S. tariffs are negatively affecting their businesses and their customers. However, “most of what I’m hearing is that companies are waiting it out… They feel that this is something that will pass,” he said.
Dedola remains “pretty bullish” about the U.S.-China trade in general for 2020.
“We’re doing things as a company that are more dynamic and looking at different ways of marketing ourselves,” he said. “Because people have a lot invested in these trade lanes, they’re not going to abandon them.”