Trump Tariffs

STAY PREPARED
Trump Tariffs — All Mexican Goods

Dear Clients & Friends,

As you are aware, on Sunday July 18th, 2025, President Trump stated he would possibly be imposing a 30% tariff on ALL Mexican goods come August 1st, 2025, if an agreement is not made prior to that date. Please find the following link which provides a copy of the official notice for your review:
• https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/3597d90b-b9b6-5a2a-b463-91595712fdef/Trump_30_Tariffs_on_MX_Letter.pd
With that being said, if for any reason the Trump Administration decides to reintroduce the tariffs, we highly suggest being prepared for the future.

If the tariffs are implemented, having an ACH and ACE account already set up will make for a smoother transition by facilitating the entry process without interruptions of the day-to-day operation.

Below please find the links with information and instructions on how to apply for an ACH and ACE account:
• ACH: https://www.cbp.gov/trade/trade-community/automated/automated-systems/gs-automated-systems/ach/signing
• ACH Application Form: https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/db723385-3514-0e6d-5724-3ab764ca3ba4/CBP_Form_400_Apply_For_ACH.pdf
• ACE: https://www.cbp.gov/trade/automated/getting-started/portal-applying.

Please be sure to provide us with your PUN (Payer Unit Number) once your ACH account has been activated.

Additionally, please note you also have the option to apply for the PMS Program with CBP (Periodic Monthly Statement). This program allows you to shift the payment process from transaction-by- transaction process to an interest free periodic monthly process.

We highly suggest to read the documents we have attached which provide:
• Information on how the PMS program works
• How to apply
• Bullet points/simplified version on how to apply
• When payment will be deducted

PMS (Periodic Monthly Statement)
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/c46da1de-9ccb-08fe-07f0-ac0bac37e6c6/Participating_in_Periodic_Monthly_Statements_1_.pdf

Application Process:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/e5cb5773-7f6e-9ed6-428b-32e017b9ee48/ace_monthly_statement_capab_3.pdf

Bullet Points on How to Apply for PMS:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/c561e9ea-c7eb-b553-bf23-8e0438dd699b/HOW_TO_APPLY_FOR_P.pdf

PMS Deduction Dates:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/53ac0770-3a02-bfb7-b82d-23b884efce2f/periodic_monthly_statements_due_dates_for_2025_508c_0.pdf

You will also require a continuous bond that covers the duties your company will pay in a 12-month period.

Applying/Updating your Continuous Bond to cover the possible duties imposed:

A continuous customs bond is an ongoing financial guarantee required by customs authorities to ensure compliance with import and export regulations. All importers of record must have a valid continuous bond on file which is valid for a 12-month period from the date of issue; it can be renewed annually. When it comes to calculating your bond size/amount it is based on 12 months of duties, taxes, fees (DTF) paid on import transactions.

The calculation for a Continuous Bond amount is the estimated DTF for the previous or next 12 months (whichever is greater), multiplied by 10%. Round up to the nearest $10,000 to get the total bond amount. The minimum Continuous Bond amount for import bonds is $50,000. For bonds that the DTF for the 12-month period are more than $1,000,000, the bond amounts are rounded up to the nearest $100,000 value.

The chart below provides a simple demonstration of how the estimated DTF equate to a Continuous Bond amount. Please note that this chart is only to demonstrate the bond amount calculation. Bond amounts may be much higher. The important thing to understand is how to valuate and round up to the correct amount.

Total 12 Month Taxes, Duties, and Fees Bond Amount
$0 – $499,999 $50,000
$500,000 to $599,999 $60,000
$600,000 to $699,999 $70,000
$700,000 to $799,999 $80,000
$800,000 to $899,999 $90,000
$900,000 to $999,999 $100,000
$1,000,000 to $1,999,999 $200,000
$2,000,000 to $2,999,999 $300,000

If we are your broker of record (BOR) for your company’s continuous bond, please run the calculation listed above based on the 30% tariff. Provide us with the total bond amount you will need so we can get the process started with the surety company to raise your bond limit. If we are NOT the BOR for your continuous bond, please be sure to contact your BOR immediately to get this process started.

Furthermore, if you wish to apply for the reconciliation program, below please find the information regarding the program.

WHAT IS THE RECONCILIATION PROGRAM?

The U.S. Customs Reconciliation Program is a process that allows importers to submit certain required data to U.S. Customs and Border Protection (CBP) at a later date, rather than providing all of the information at the time of importation. This program is primarily used for importers who might not have all the necessary information available at the time of entry to determine accurate duties, taxes, or classifications. The CBP Reconciliation Program allows importers to correct or “reconcile” information in their entry summaries after the shipment has entered the United States, particularly when certain details like value or free trade agreement eligibility are not fully known at the time of entry.

If you wish to participate in the program, please note there will be strict requirements for recorded keeping, all reconciliation reports would need to be submitted in a timely manner, there will be increased service fees, and upon request CBP will need to have full transparency of your company’s financials. Please review the following links that provide detailed information on the program:

• What is the Reconciliation Program: https://www.cbp.gov/trade/entry-summary/reconciliation/reconciliation
• Reconciliation Frequently Asked Questions: https://www.cbp.gov/trade/programs-administration/entry-summary/reconciliation/ace-reconciliation-frequently-asked-questions

Additionally, we are receiving a lot of questions regarding what value the duties will be calculated from. The following are the five (5) approved CBP valuation methods; please review to make sure you are utilizing the one that is best applicable to your operation.

1. Transaction Value Link CFR
   o https://ecfr.io/Title-19/se19.2.152_1103
2. Transaction Value of identical merchandise and similar merchandise Link CFR|
3. 9 CFR § 152.104 Transaction value of identical merchandise and similar merchandise – Code of Federal Regulations
4. Deductive Value Link CFR
5. https://ecfr.io/Title-19/se19.2.152_1105
6. Please note that Deductive Value is what is most likely to be used on consigned based shipments, and what we feel most of our clients will utilize for appraisement purposes to CBP. This contains all the details for your review in order to verify if your company may fall under this scenario. We have also attached a binding ruling issued by CBP on a case very similar to what may apply to consigned produce from Mexico and have been provided by very well-respected law firm a copy of a settled court case from the U.S. Court of International Trade on a similar matter and proper calculations. Please review attachment.
7. Computed Value Link CFR
8. 19 CFR § 152.106 Computed value – Code of Federal Regulations
9. Fall Back Method Value Link CFR
10. 19 CFR § 152.107 Value if other values cannot be determined or used – Code of Federal Regulations
    Please find a notice from CBP which provides information on how to determine the customs value for fresh produce (Informed Compliance Publication):
    • https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/c43bd41b-fbc2-727a-fa9d-c5ae32e92704/Informed_Compliance.pdf

Based on the above, we are providing a sample formula attached that may help your company calculate an appraised value to CBP on consigned shipments utilizing the “Deductive Value Method.” Please note that this is merely a sample, and not all listed deductions may fit your individual scenario; each sales contract and/or grower contract may differ on a per case basis. Before you proceed with any calculation, we strongly suggest that you consult with your legal counsel and accountants to ensure that you utilize the best method based on your individual situation. We will be more than glad to assist with any information and/or questions that your lawyers or accountants may have. If you do not have a lawyer or CPA, we strongly recommend that you hire one.

We would also like to emphasize that this exercise is merely for US Customs “Appraisement” purposes and is different from the actual liquidation process you may have with your clients and growers. Again, we strongly suggest you review the liquidation process with your legal counsel. With that being said, please review the valuation exercise attached:

DEDUCTIVE VALUE SAMPLE:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/426298b0-564f-78a2-d85a-703cb063848c/Copy_of_Trump_Tariff_Deductive_Value_Math_FOB_Price_Updated.xlsx

EXECUTIVE ORDER:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/ec71a4f2-7b69-65f6-2a5d-0b27656ff4b8/Executive_Order.pdf

SIMILAR CASE:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/c760259f-8d5e-79c1-60ee-451de7bdd7d8/Similar_Case.pdf

BINDING RULING:
https://mcusercontent.com/d769bef9e880bc35a1d185cfb/files/5b77006c-9c7e-5ab4-f264-b59d2eeeb3a2/Binding_Ruling.dot.pdf

Please also note we have been advised that you may have to segregate the calculation of duties by line item on the sales invoice to your clients. Or, on the “comments” section of your invoice you may list the duties that are included in your sales price. Again, we strongly suggest you review this matter along with your liquidation procedures to your growers with your legal counsel to ensure that you are abiding with CBP valuation laws.

In conclusion, although this is disappointing news, please note negotiations are still in progress and we are hopeful a new agreement will be reached that will be satisfactory to all parties involved. As your U.S. Customs Broker we feel obligated to advise you of what the future may hold and the actions you can take to be proactive and well prepared ahead of time should the 30% tariffs take effect.

Please don’t hesitate to contact our office with any additional questions or concerns.

Thank you,

Copyright © 2015 K&K International Logistics, LLC, All rights reserved.

Our mailing address is:
group@kk-intl.com

Our telephone number is:
(520) 287-3550

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