KPMG Ireland’s Post

Transcript

The US tariff announcement is going to have a dramatic effect in terms of Irish industry, in particular for Irish exporters exporting directly into the US market, but equally for Irish businesses that are trading with the EU and elsewhere, where ultimately their goods are incorporated into final product that's exported into the US. The application of a 20% Judy cost on top of the normal MFN rates is going to be a significant burden for Irish exporters. Into the US market, the question for Irish businesses now is which sectors are going to be mostly hit by those particular measures. In that context, whilst the pharma sector has been excluded from the measures that were announced, though the the pharma sector is potentially going to be impacted at a future date, but for those not in that sector, they are directly impacted now in terms of what can Irish businesses do and what they should look out for. First piece to look out for is the Inca terms that have been agreed with your. Customer in the US that will determine whether you as the exporter or your customer is importer will actually be the one who's obligated to actually pay the customs duty. If the inco terms are that EU as exporter are required to pay that customs duty, you need to make sure that you've got sufficient funds in place or an agreement with brokers to ensure that those funds can be released in time so that there's no hold up at the for the goods at import into the US. Additionally, businesses should look at valuation methodologies. The US does apply a concept called first sale for export. That's a really valuable type of mechanism which can reduce down the actual amount that's subject to duty on import into the US. Equally, businesses should really look at data modelling, so look at their supply chain data and assess are there any strategies that can be put in place to manage the duty in position. Equally model different type of scenarios. That's going to be particularly relevant when the EU as expected in or around mid-april. Is going to announce a series of countermeasures. Those countermeasures are likely to result in the EU introducing duty on US origin goods brought into Europe. Businesses in Ireland really should pay close attention to potential customs solutions including inward processing as well as customs warehousing and on the US side look at free trade zones. These are really valuable opportunities by which businesses here in Ireland can reduce down the total duty cost associated with the imposition of the new duties. Announced.