Benesch Transportation & Logistics Vice-Chair Jonathan Todd was recently quoted in Vogue Business discussing the far-reaching effects of President Trump’s newly announced tariffs on China, Mexico and Canada. The executive orders, which impose a 25% tariff on Mexican and Canadian goods and a 10% tariff on imports from China, are set to take effect on February 4. The sweeping changes will impact a significant portion of the fashion and beauty industries, from supply chain logistics to pricing strategies.
In the article, Jonathan provides key insight into how brands may navigate the tariff landscape, particularly through the tariff exclusion process and duty drawback suspensions. He explains that while companies may seek tariff exclusions, the process presents challenges.
Amid the current tariff climate, some brands may seek to maintain sales growth by exploring international markets. This could involve exporting directly from the US, forging partnerships with in-country retailers and distributors, or establishing bricks-and-mortar stores abroad. “One of the top legal issues to consider is whether your trademarks and intellectual property are available and protectable in the market,” says Todd.
The article also highlights the suspension of the de minimis provision and duty drawbacks, which traditionally allowed companies to recover duties on imported materials used in exported goods. Jonathan warns that this change could introduce new financial burdens: “The current rules allow for some flexibility in record-keeping so that duties can be recovered in retail supply chains even if the exact product that was entered is not the same item exported,” he explains. “Eliminating the drawback means these duties will become a sunk cost no matter what eventually happens to those goods.”
As fashion and beauty brands strategize their next steps, legal and supply chain experts like Jonathan Todd continue to offer guidance on mitigating risks in an increasingly volatile trade environment.
Read the full article in Vogue Business.