U.S. businesses and their partners across the globe are looking to make sure they comply with the highest import duties in decades amid a worldwide focus on President Donald Trump’s slate of tariffs.
Since retaking office, Trump has hit nearly every nation with new tariffs and is working to reshape global trade to give U.S. companies a home-field advantage.
Mike Sanders, CEO and co-founder of the sales tax automation company CereTax, told The Center Square that companies big and small want the lowest possible taxes while complying with federal laws. That can get complex quickly.
For example, minor changes to materials, dimensions, or compositions can justify placing products in lower-tariff categories. The practice is called tariff engineering. One example: Converse puts fuzzy fabric on the soles of its signature All Stars so they can be categorized as slippers rather than athletic shoes. The change comes at a significant tax discount.
Sanders said any justifiable reclassification that can save money is a top business priority.
Such changes are legal, but there are some gray and illegal areas, such as intentional misclassification, undervaluation and fraud.
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Author: Joe Weber
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