As US and Chinese firms rush for outside expertise on how to handle fallout from the escalating trade war between the two nations, consultants on everything from management to logistics say they have seen soaring demand for their services.
US imports from China that will be most affected by tariffs include cell phones, telecommunications equipment, toys and sporting equipment, while US exports to China that will be hit include civil aircraft, plane engines, cars and soybeans.
Firms like A.N. Deringer Inc in the US and ETCN International Inc (中國通關網) in China say they have been giving advice to clients ranging from which countries to turn to for alternative sources of supply to how to legally reclassify products to avoid tariffs.
“Our value has never been higher ... when I talk to people, they are desperate for the expertise,” said Robert Stein, vice president of Mohawk Global Trade Advisors in the US.
Mohawk, which provides international trade consultancy services from offices in five US states, has seen a 20 percent jump in consulting activity since the trade war began heating up, around the first quarter of this year, Stein said.
Amy Magnus, director of customs affairs and compliance at Deringer, said her firm had seen increasing appetite for its consulting services, with particular interest in so-called tariff engineering — structuring the production process to legally sidestep tariffs.
“A company might import components, partially assembled product, or change the final product in a way that changes the classification of the good to a new product — one that is not subject to the tariff,” Magnus said.
Deringer says on its Web site that it is the largest privately held customs broker in North America.
One medium-sized US gardening equipment supplier, which has just hired a logistics expert, is considering “complete knock-downs” for products that might be affected by tariffs, a person with direct knowledge of the matter said.
That would mean products sold by the firm that are usually made in China would instead be shipped to the US as individual components before being assembled there, thus avoiding tariffs on the finished items, he said.
Meanwhile, Chinese import and export consultancy ETCN in the first-half of this year saw a 40 percent year-on-year increase in US users of its Web site, which sets out compliance and customs information, the company told reporters.
Its US-registered members doubled in April from a year earlier, it said.
Supplier sourcing is also a hot topic, with companies potentially shifting to buy raw materials or components from nations not subject to tariffs.
“US companies that have China-based supply chains are exploring how they might incorporate other countries like Vietnam or Thailand into their network of vendors,” said Richard Morgan, chief executive of business advisory Equus Global Associates Ltd, which has seen an increase in billable hours as existing clients evaluate the effect of tariffs.
Consultancies in other countries are also seeing the knock-on effect of growing global trade tensions, especially in Canada.
“People are confused. People are ... not panicking, but we are definitely seeing an increase in [tariff] inquiries,” said Igor Chigrin, cofounder of small Canadian import and export consultancy Win Global Partners.
He said the firm had seen a 15 percent increase in business since trade tensions started to intensify and expects another 50 percent jump over the second half of the year.
Anticipating an influx of work in the next couple of months, some consultants have been considering expansion.
Mohawk might grow its so-called “duty drawback” department as a result of the recent spike in business.
Duty drawback allows for the recovery of duty on goods that are imported to the US before being exported.
However, advisory firms are aware that their boom times are precariously balanced on the back of political sentiment.
“To be very frank, he [US President Donald Trump] could tweet and an hour from now things would change,” Stein said.
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