The regulatory environment that a company may face in the process of exporting its products can be very complex, mainly due to the specific tariffs and regulations that these may be subject to in each market. These factors have a direct impact on costs, logistics and legal compliance, so knowing how to deal with these requirements is key to guaranteeing export success without surprises.
What are tariffs?
Tariffs are taxes that countries apply to imported products. These taxes are applied in order to protect national products and companies, as well as to generate tax revenue. By imposing these taxes, manufacturers are forced to increase the final price of their product in the destination market, which can affect their competitiveness.
There are different types of tariffs:
- Specific: based on a fixed amount per unit
- Ad valorem: this is a percentage of the value of the product
- Mixed: this combines both, charging both a percentage of the value and a fixed amount per unit.
In order to anticipate the taxes to which we will be subject in the target market, it is necessary to correctly identify the tariff code (TARIC) of our product. An error in this classification can even lead to sanctions, delays or the improper payment of tariffs. For this reason, it is advisable to rely on consultants or specialists to validate this information.
List of tariffs supposedly applied to the United States (blue and white) and the new tariffs applied by the United States (yellow).
Trump White House Official Rapid Response Account 47 in X.
Regulations at destination: technical and legal requirements
Beyond tariffs, each country has its own technical, sanitary, phytosanitary or labelling regulations (among others) that must be complied with in order to market foreign products within the country. These regulations can be very disparate, even within trading regions.
Taking the European Union as an example, it is common for certifications such as the CE (Conformité Européenne) marking to be required, which guarantees that the product complies with safety, health and environmental protection standards. In the United States, permits from the FDA (Food and Drugs Administration) or other federal agencies may be required, depending on the type of product.
Compliance with the regulations and requirements of each market is necessary so that the product, and therefore the company, is not subject to customs detention of goods, fines or prohibition to sell the products in the target market. For this reason, it is essential to carry out a prior analysis of the specific requirements in the country of destination and to prepare all the documentation in advance.
The advantages in tariffs and regulations of trade agreements
Trade agreements can include free trade clauses, tariff preferences and more streamlined export procedures. In this way, these agreements between countries can reduce or even eliminate tariffs.
So, taking Spain as an example as a member of the European Union, it can benefit from the agreements signed by the EU with external countries such as Mexico, Canada, Japan or Chile, among others. These agreements allow European companies to access markets with reduced tariffs and preferential conditions.
In order to benefit from these agreements, it is necessary to demonstrate the preferential origin of the product, which requires compliance with specific rules of origin. This may imply that a certain part of the production process is carried out within the exporting country.
Essential documentation for exporting
In order to pass customs clearance without problems, it is necessary to have the appropriate documentation. Some of the most common required documents are:
- Certificate of origin
- Packing list
- Commercial invoice
- Technical or health certificates
- Transport documents (bill of lading, airway bill, etc.
In addition to this information, each country may require certain specific formats or additional information, so it is advisable to check the specific requirements with the customs authorities or a customs agent before sending the goods.
Practical tips to avoid surprises in the process
Some of the recommended advice to apply and thus foresee and avoid possible inconveniences are:
- Correctly classify your product with the corresponding tariff code.
- Check in advance the tariffs and regulations to which the import of the product is subject in the destination market.
- Check if there is a current trade agreement in place that could be beneficial in reducing costs.
- Make sure you comply with the technical and legal regulations of the market.
- Prepare the required documentation before shipping the goods.
- Rely on specialised consultants or customs agents who have in-depth knowledge of the relevant legislation and procedures.
Successful exporting is not only a question of offering a quality and competitive product in a specific market, but also of carrying out appropriate legal and customs planning. Understanding tariffs and regulations is essential to avoid unexpected costs and delays that can affect the competitiveness of your company and products.
Exportest shows the tariff applicable to your product in each potential export market, as well as analysing your company’s situation in terms of knowledge of entry barriers; you can contract Exportest through this link, and if you have any questions, you can fill in the form below this article or call +34 965 651 725.
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Writing of the article: Álvaro Ramírez, Export Manager at Oftex