Tariff Turbulence? Data Integration Is Your Safety Net 

What’s a Tariff?

A tariff is a tax on goods coming into a country. For example, if a U.S. store (let’s call it Big Mart) buys t-shirts from Italy, the U.S. government may charge a fee when those shirts arrive. Here is how it works:

• The shirts are made in Italy and shipped to the U.S.
• When they land, U.S. Customs checks their value.

Big Mart (the buyer) or their agent pays the tariff to get the goods.

Common Myths About Tariffs 

Myth #1: “The other country pays the tariff.”

Nope. The U.S. buyer pays it, not the seller in Italy or China. That cost is usually passed on to consumers, meaning higher prices for you and me.

Myth #2: “Tariffs are only for finished products.” 

Wrong again. Raw materials like steel, lumber, or grain also face tariffs. Even the materials used to make products are taxed.

Myth #3: Customs and tariffs are the same thing. 

Customs is a government agency like the IRS. Customs processes and controls goods crossing the border. When goods cross the border, they are subject to a category of taxes called, “customs duties or fees.”

Tariffs are a subcategory customs taxes.

Myth #4: “You don’t have to worry about calculating the tariff, Customs figures things out for you.”

Not true. Importers must report all the details—what the product is, where it’s from, how much it’s worth—and do the math. The government officials will check it, but if something’s wrong, you could owe back taxes and get fined.

Think of it like filing taxes: you fill them out; the IRS checks your work to see if you owe anything after filing them.

The Role of EDI in Tariffs

With EDI (Electronic Data Interchange), businesses share info with Customs electronically. It’s like filling out a digital version of paper forms.

For example, CBP Form 28 (Request for Information) is one such form—used when Customs needs more details about your shipment. Submitting it electronically through EDI helps avoid delays.

How Data Can Save the Day and Save You Money

1. Answering “When”

Let’s go back to Big Mart. Say the U.S. announces a 20% increase in clothing tariffs starting Monday. Big Mart’s shipment left Italy on Friday and should arrive next Tuesday.

Are they stuck with the new tariff?

Not necessarily. A form called CBP 3461 – Entry/Immediate Delivery shows when the shipment left and when it’s due. If it proves the shirts shipped before the new rule, Big Mart might avoid the extra charge.

Real-world Scenario

In 2019, the U.S. imposed higher tariffs on imports from China.

Nike was able to avoid tariff increases on goods that were already in transit before the tariffs were introduced. They did this by ensuring their shipping documentation was up to date, proving that the goods were already en route when the tariffs took effect.

2. Answering “When and Where”

Sometimes, tariffs depend on the invoice date instead of shipping. If the Italian seller delays sending the invoice—or sends the wrong date—Big Mart could be hit with the 20% fee anyway.

Where the goods come from matters too. Say Big Mart orders laptops made in Vietnam, but some parts come from China. The U.S. charges different tariffs for each country. If the paperwork doesn’t clearly show where the goods are made, Big Mart might pay more.

The key document here is CBP Form 7501 – Entry Summary. It includes:

• Where and when the goods arrived
• Where they were made
• What’s inside (with descriptions and quantities)

Making sure this form is accurate is vital to avoid overpaying.

Real World Scenario

In 2025, Apple has airlifted millions of iPhones from their supplier, Foxconn in India.

Exporting the iPhones early before U.S. tariff regulations hit and using India as the country of origin compared to countries that will face higher tariffs such as South Korea, China, Vietnam, and Taiwan.

Maintaining accurate records of the iPhone’s origins is necessary as Apple continues mass exports from India to offset the financial impact of tariffs based the goods’ origin.

3. Answering “Why”

If Big Mart suddenly gets a $50,000 tax bill, they’ll want to know why. Here’s how that might play out:

• Big Mart checks their CBP 7501 and Commercial Invoice to review what was reported.
• If Customs wants more info, they send Big Mart – CBP Form 28 (Request for Information).
• If Customs makes changes—like reclassifying items under a different tax rate—they issue CBP Form 29 – Notice of Action.
• If Big Mart disagrees, they can file CBP Form 19 – Protest, with all documents showing their case.

Real-World Scenario: A company, Cyber Power Systems, manufactured and shipped uninterruptable power supplies and surge protectors.

Cyber Power Systems claimed the goods were manufactured in the Philippines whereas U.S. Customs disagreed arguing that the main circuit board component was made in China. This difference of opinion led to a lawsuit.

The court sided with U.S. Customs, but part of making this determination was reviewing all the documentation that went back and forth between Cyber Power Systems.

Reviewing the documentation, the court found that there wasn’t enough evidence in the documentation to argue that the manufacturing facility in the Philippines did not “substantially transformed” the products enough to have the Country of Origin listed as the Philippines rather than China- where the main component was made.

Electronic Data Interchange Helps You Establish a Digital Paper Trail

An EDI VAN (Value-Added Network) helps keep everything coordinated—suppliers, brokers, Customs, and carriers. It ensures:

• Your forms are sent and received on time
• Errors from typos or missing info are minimized
• You have a solid digital paper trail for audits or disputes

Using a trusted partner like Kleinschmidt helps automate and secure your data so you don’t face delays, fines, or surprise bills.

The Bottom Line

Tariffs affect everything from raw materials to the finished products we buy. Knowing how they work— ensuring that the right descriptions, time stamps, and other data are complete and accurate in your management system—can protect your business and your wallet.