Unless you have been vacationing on Mars using one of SpaceX’s spaceships, you would have been aware of the recent development in US foreign trade policy. Especially the use of the US International Emergency Economic Powers Act by the new US administration.
What is the US International Emergency Economic Powers Act and recent application?
As a short reminder (courtesy of Wikipedia), the International Emergency Economic Powers Act (IEEPA), is a US legislation “authorizing the President to regulate international commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has its source in whole or substantial part outside the United States.”
Making use of this regulatory provision, the US administration has decided in February 2025 to impose a 25% additional tariff on imports from Mexico and Canada (with energy resources from Canada having a lower 10% tariff), as well as a 10% additional tariff on imports from China. And is looking at potentially extending to other countries as well.
For more details, you can refer to the official communication: Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China – The White House
What are the consequences?
These new duties have to be considered for the classified products when being declared for Entry for Consumption, immediately. It can happen that now multiple additional duties represented by chapter 99 HS-Codes have to be considered.
If companies do not take immediate action their inbound supply-chain may suffer delays while importing.
How can SAP Global Trade Services safeguard your business?
Since the product world is constantly changing, the Harmonized System (HS) is also subject to regular changes. The World Customs Organization (WCO) revises the HS codes every five years, but nomenclatures that are based on the Harmonized System change at much shorter intervals. Thankfully, working with our partner ecosystem, SAP Global Trade Services is already equipped to help organizations react to these changes.
Data providers indeed closely follow these changes and make nomenclature available to their customers rapidly so that they can remain compliant. They provide this in a file form ready for upload in SAP Global Trade Services.
By accurately classifying products, companies can enable the customs authorities to control import and export of products through unique identification of those products with the matching customs tariff numbers. The customs authorities calculate the amount due to customs based on these numbers, as well as other relevant characteristics for customs control. And this applies of course to the new US requirements.
So the question now is, what do you need to do? Well, simply follow the three steps below:
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1. Upload new duty rate files from your data provider including the new duties resulting from the IEEPA to your SAP GTS system |
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2. Adjust your duty calculation scheme by adding another duty type for additional duties |
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3. Populate the value calculated for this new duty type to your message segments |
Where to find more information?
Whether you are new to SAP Global Trade Services or would like a few pointers, I would suggest having a look at the following resources:
- Overview page for SAP GTS, including a high level description of key features and use cases
- Help Portal for SAP GTS, and most specifically the section on Products and Classification
- Configuration Guide for SAP GTS, this is the central starting point for configuring SAP Global Trade Services, edition for SAP HANA and has a dedicated chapter on Classification
- Learning Journey Discovering the Basics of SAP Global Trade Services, especially the lesson on Classifying Products
All credits for this blog go to Torsten Stolz – Product Owner SAP Global Trade Services, who put this information together at short notice.
And if you are interested in learning more about SAP solutions for Governance, Risk, and Compliance, feel free to fill-in the demo request form!
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