The trade environment has never been so fraught. In addition to the ongoing tariff rollercoaster that pits production countries against one another, the last year has brought the end of de minimis, increased Customs enforcement as well as proposed changes to importers of record, among others.
In a discussion with HGI founder Edward Hertzman for HGI Now, Salvatore Stile II, co-founder and co-chairman of customs broker Alba Wheels Up, characterizes this new trade environment as “a monumental shift.”
Along with the added costs, the upheaval has been accompanied by additional scrutiny as the U.S. government doubles down on customs fraud. As a result, everyone in the system has to be much more buttoned up when it comes to verifying their products’ place of origin, contents and classifications. Even for those companies that think they’re doing everything right, Stile said it’s time to run a fire drill to scrutinize every step in the process. He advises his clients that that level of due diligence could save headaches in the long run—and not just related to tariffs.
“A lot of importers do not realize Customs expects you, at the shipment level, to be able to provide documentation from the raw material through the bill of material on any component for those goods. [You’re expected] to justify and present them in the format that they request so that your goods are not subject to a forced labor act,” he said.
And for any company looking to get creative with their paperwork, Stile said good luck.
“CBP and the other government agencies have very sophisticated software and technologies to measure what’s going on analytically by every importer to the U.S.,” he said, adding he anticipates the government to begin extending enforcement beyond importers of record. “Section 1592 states any person or entity that causes a shipment to violate customs law or government law that would have a negative impact on the U.S. to be held accountable.”
As the U.S. leans into Section 122 tariffs and pursues 301s, Stile advises apparel firms to model different scenarios, whether it’s production location, tariff engineering options or others to ensure they’re paying the best rates and avoid unnecessary expense.
In addition to advising clients on these matters, Alba Wheels also collaborates with traceability companies that analyze shipments on the front end and help get goods released if they are detained. The company also leverages tech to catch misclassifications across SKUs for shipments — past and present — which has proven to be a major advantage that’s benefited clients to the tune of millions of dollars.
These days, Alba Wheels is also consulting on the IEEPA refund process. In this discussion, Stiles outlines the specific steps importers must follow and the timeline of when he expects the government to begin releasing funds.
Here, Stile shares where millions of dollars are being lost (and recovered), how technology is becoming a bigger part of compliance and enforcement, and why the winners in this new trade environment will be the ones who treat customs strategy as a core business function—not an afterthought.
Watch the full discussion here.
