How ONESOURCE Free Trade Agreements reduce tariff impacts
This blog post is the first in a series of four, examining product solutions that can help specialists and strategists master tariff compliance.
President Donald Trump’s levying of tariffs is creating massive uncertainty for companies that do business in or with the United States. The inability to know how things will progress makes it extremely difficult to put strategies in place to mitigate or avoid adverse impacts.
As a result, organizations are seeking tools that give them the flexibility to quickly respond to change, minimize added costs across their business and supply chains.
One tool that can help lessen the impact on costs and complexity is ONESOURCE Free Trade Agreement (FTA) Management, a software solution that enables corporations to identify opportunities to qualify goods under FTA-specific, rules of origin and manage compliance with those agreements.
The importance of free trade agreements in minimizing tariff impact
“Free trade agreements can limit the negative impact or minimize what the tariff is going to be,” says Karen Lobdell, Senior Manager, Product Management at Thomson Reuters. |
“It won’t eliminate the tariff impact, because most of the tariffs with President Trump, at least to date, have had no exemptions and no exceptions. When they are implemented, they will apply to all. If there is already a free-trade agreement in place, it will help to reduce the cost of the agreement by providing a lower base tariff. If the underlying product had a duty rate of 10 percent without the FTA, when the 25-percent tariff is added to it, companies are looking at a 35-percent duty rate. However, if the underlying product had a duty rate of 10 percent without the FTA, when the 25 percent tariff is added, companies are looking at a 35 percent duty rate.
That 10 percent savings can really add up for companies of all sizes, so it’s more imperative than ever that companies examine the source of origination for the items in their supply chains.
Identify opportunities to qualify goods under FTA-specific rules of origin
ONESOURCE Free Trade Agreement Management can help organizations
uncover those free-trade opportunities:Its unique architecture can accommodate any existing, changing, or future free trade agreements, including USMCA, CFTA, SFTA, AFTA, ILFTA, JFTA, UKFTA, CAFTA, and TAFTA, among others–covering a wide range of bilateral and multilateral free trade agreements across the globe. Users can indicate which specific agreement(s) they’re currently taking advantage of, as well as those they are interested in exploring.
- The accurate application of FTAs allows companies to attain a competitive advantage and maximize profit through reduced customs duties. Dashboards allow users to easily track FTA savings, utilization rate, and other key metrics. Automated alerts, notifications and notifications streamline the process of certificate management and supplier solicitation. Supplier Certificate of Origin Validation gives suppliers a secure portal to perform a bill of materials (BOM) without divulging confidential cost information. After the analysis, only the results are shared with the parties, allowing for a more accurate exchange of information. In addition to the FTA
- Management solution, Analyzer helps teams uncover where the greatest savings potential lies–making it an ideal tool for guiding strategy, building internal business cases, or validating ROI assumptions before scaling further.It delivers analytics and up-to-the-day reports highlighting which sourcing countries, trade lanes, and trade agreements offer the greatest return on investment – based on your organization’s actual trade data. Like all ONESOURCE solutions, it is based on Thomson Reuters’ deep and trusted content. This includes the rules, regulations and data that support global trade compliance. Reduce supply-chain costs with FTAs.
- Once the opportunities under free trade agreement have been identified,
- ONESOURCE’s Free Trade Agreement Management provides companies with the tools to take advantage of them. It reduces compliance risk by streamlining trade workflow, eliminating manual tasks, and ensuring compliance with the latest regulatory changes. An audit trail is built into the software to document diligence and provide evidence in the event that proof of FTA qualification was ever requested.
- Thomson Reuters system based document retention enhances compliance monitoring, making verification easier. It also tracks and updates FTA origin status to ensure ongoing accuracy. In addition, the solution also streamlines the creation of Certificates of Origin for customers when needed.While ONESOURCE Free Trade Agreement Management is designed to maximize savings, it also integrates a wide range of data sets – such as risk indexes and partner government agency information, to deliver a more holistic view of tariff compliance.
- Face an uncertain geopolitical future with confidence
In a time of uncertainty–uncertainty that may soon extend to opportunities available under free trade agreements–corporations must be able to quickly evaluate every option to
reduce costs across products and supply chains. ONESOURCE Free Trade Agreement Management is a practical way to achieve this. Thomson Reuters understands that navigating the complexities associated with tariff compliance in global commerce requires a multifaceted strategy. Our suite of products
are designed to address the most important areas. Free Trade Agreement Management is just one of the many tools available to help you stay ahead.
ONESOURCE Free Trade Agreement Management
Software that identifies opportunities to qualify goods under FTA-specific rules
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Come back next month and learn how ONESOURCE Global Classification simplifies accurate product classification while supporting compliance.
