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In January 2018, import prices rose by 1% in the United States in contrast to a forecasted rise of 0.6%; the forecasted rise for December 2017 was 0.2% but turned out to only be 0.1%.

What caused such an unexpected hike in import prices in January 2018? There are two factors at play here: the cost of imported petroleum, and the weakening US dollar against foreign trade partners’ currencies.

In January 2018, the import price of petroleum saw a skyrocketing increase from 2.3% in December 2017, to 4.3%. If we omit the drastic rise in price of petroleum from the import price of goods and services, the latter still rose by 0.4%. A 0.4% increase equates to the highest rise in the price of imported goods and services that the US has seen since July 2016. The falling US dollar is partially to blame.

With the US dollar weakening, imports are becoming more expensive, and exports are being stimulated. The domestic currency is experiencing trouble because the US has an infamous trade deficit. This deficit is caused by the US importing more than it exports, which causes the exchange rate to weaken against foreign currencies.

There is not a whole lot of control that individual business owners have over rising import prices; It is in the economy’s nature to be constantly fluctuating. But while increasing prices can be of concern, it is best to make sure that the rest of your finances are in order.

When running an import/export business, the fine details are everything. Customs brokers specialize in knowing the fine details like the back of their hand.

U.S. Customs
Gone are the days of setting up shop at a brick and mortar store down the street. If you’re starting a business, making sales can be as simple as setting up a website. It’s no secret that having an import/export business can be extremely profitable — especially if you do it wisely and keep your costs down.

So, you’ve found a product you like, or know will sell, why not start an import/export business?

Here’s how:

1. Find your market

Your chances for success will improve if you do a thorough job of tracking and anticipating trends. In fact, being one of the first importer/exporters of a product that becomes a super-seller is what business dreams are made of!

Doing your homework and being knowledgeable of trends, both past and present, will work to your advantage. By researching the market, you will be able to locate the best potential foreign market for your product. There are multiple resources out there for you to get a good overview of the market, such as The World Bank and Global Edge.

2. Source a supplier

With a product in mind, you can now approach a reputable supplier like Alibaba, or Thomas Net Register (there are many other options as well).

When contacting a potential supplier, you’ll want to get an idea of a few things: product specifications, packaging, and company capacity. Ensure that the supplier you work with is professional, and poised to work within your needs.

Most importantly, make sure that the supplier is ready to keep up with the potential demand.

3. Determine price

The general business model for an import/export business is centered around two things: volume, and commission on that volume.

You will want to ensure that your markup on the product does not exceed what your customer is willing to pay, while still making it worth your while. Typically, a 10-15% markup is reasonable. As such, the more you sell, the more profit you make!

Hot tip: keep the product price separated from the logistical processes because those two will eventually be combined into the landed price per unit. Don’t worry– a solid transportation company can help you out here!

4. Start a website

Establishing an online presence for your business is necessary. Without one, you won’t have a platform for your prospects to get to know you and your product, and ultimately, press that “order” button. And setting up a website is easier than you might think, with a variety of do-it-yourself resources available.

Register your domain name, create a website, and create a blog. At this step, it may be advisable to consult with legal counsel and accountants in order to make sure that you are in a position to move forward. However, don’t worry about hiring a website designer/developer just yet! You can set up your own website and play with preset layouts with services like GoDaddy, Wix, and Squarespace.

5. Target your customers

Beyond basic marketing and SEO practices, you should always be on the hunt for customers! Use social media to your advantage by posting information about your product online, posing questions to your customers about your product and its benefit or use to them, and ultimately — keeping the conversation going.

Social media tip: create content for your target audience, don’t just talk about your product! (Ex: informational blogs, infographics, etc.)

Beyond this, trade organizations such as the Chambers of Commerce can connect you with consumers in the international marketplace, contact lists specific to your industry, and trade-shows that are taking place on the local and international scale.

6. Transport your product

At this point, with an engaged customer base that loves your product, you must decide how you will move your product. First and foremost, hire a freight forwarder that is geared towards serving moving cargo, from factory door to warehouse.

Next, it is advisable to consult with a customs broker, in order to ensure compliance with regulations and handle the tricky documentation that comes with shipping across borders. A blunder here can result in costly fees, duties, and taxes.

Click here to contact a customs broker.

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It may or may not come to you as a surprise that the United States is party to many international free-trade agreements (FTAs). In fact, the US is a leader of the free-trade movement, and operates in accordance with the General Agreement on Tariffs and Trade (a legal agreement between 123 countries).

As of today, the US is party to 14 different free trade agreements, and is in negotiations for 18 more. This may not be exactly in line with today’s political climate, in which the Trump administration has been very open about their protectionist ideologies, and distaste for NAFTA.

FTAs are, of course, an effective method for opening up foreign markets to American exporters, reducing trade barriers, and enhancing the rule of law in the FTA partnering nation. Point blank, the reduction in barriers and the creation of transparent trading makes it easier and more affordable for US companies to export their products.

The currently enacted free trade agreements include (over half were signed during the George W. Bush presidency) :

Israel-United States Free Trade Agreement
North American Free Trade Agreement
Jordan-United States Free Trade Agreement
Australia-United States Free Trade Agreement
Chile-United States Free Trade Agreement
Singapore-United States Free Trade Agreement
Bahrain-United States Free Trade Agreement
Morocco-United States Free Trade Agreement
Oman-United States Free Trade Agreement
Peru-United States Free Trade Agreement
Dominican Republic/Central America Free Trade Agreement
Panama-United States Trade Promotion Agreement
United States-Colombia Free Trade Agreement
United States-Republic of Korea Free Trade Agreement

What is the difference between Unilateral, Bilateral, and Multilateral Agreements?

Unilateral – This kind of agreement occurs when a country chooses to impose trade restrictions, without the reciprocation of another country. This is rare, as it puts the country at a competitive disadvantage.

At times, developed nations use unilateral trade as a method of providing foreign aid. It helps smaller, emerging markets grow, and creates new markets for exporters.

Bilateral – This agreement occurs between two countries, when the duo mutually agrees to loosen restrictions on trade in order to expand markets.

Tariffs are lowered, and the nations are granted preferential trade status with each other.

Multilateral – The more the merrier is absolutely true in this case. Multilateral agreements are very powerful, covering a large area, and boosting the parties’ competitive advantage on the market.

The drawback? These agreements are incredibly difficult to negotiate, as different countries’ interests may clash.

In most forms, the enacted free trade agreements are instrumental in supporting the American economy. Today, the Trump administration faces the challenges of fostering public support for these agreements as the political climate shifts.

clearing customs

Clearing customs is probably not the first thing that crosses your mind when you are looking to grow your business by importing and exporting across borders. Expanding a business is undoubtedly exciting, but proceeding with a sharp attention to detail will be key to ensure that things go smoothly.

Sifting through the web of red tape in place can be difficult, but getting ready to ship products responsibly will be paramount in order to avoid delays, fees, and penalties. Of course, no one likes paperwork, but the reality is that there’s no avoiding it.

Get your papers in order

Make sure that you are clear on which customs forms you might need, and note that specific requirements can vary not only from country to country, but they may vary on a regional scale as well.

Additionally, it’s important to complete all required forms as accurately as you can, with high attention to detail. This will help reduce any possible delays or confusion caused by giving incomplete information to customs officials. The more easy you make it for an official to get information, the easier it is for them to send goods smoothly along their way.

Read the news

Simply put, keeping updated on all news related to trade will help in preparing for a shift in regulations and/or requirements. Our political climate is always in a state of change, meaning international shipping regulatory framework is constantly shifting.

Rules can even change overnight! There is typically much at stake, leaving you high and dry with delays, fees, and/or penalties.

e-Commerce is international

It is now easier than ever to start an online shop. With that, there’s been an exponential spike in first-time exporters. If your product is searchable by web, then its reach is international, and your products have the potential to move across borders.

That means it’s important to have an understanding of the regulations in countries you are doing business in. The growth of e-commerce businesses also means a spike in people looking for guidance. It has never been easier to get shipping advice. Customs agents are available to chat with you at the click of a button here.

Working with a customs broker

Shippers that would rather not deal with the small, gritty details of exporting should consider appointing a customs broker to do so on their behalf. A customs broker’s job is to help the release and account of goods imported to the US, all while assuring compliance.

More importantly, a customs broker saves you valuable time and money. Working with Clearit USA is efficient, you can live chat with agents on demand, to process your shipments and answer any questions. The best part? There are no hidden fees. We have easy, flat fee clearance charges.

Click here to get started.

Talks between the participating countries in the North American Free Trade Agreement (NAFTA)–The United States, Canada, and Mexico– have already begun, as of August 2017. President Trump has been very obvious in stating his distaste for the agreement, and has pledged to repeal it as a part of his campaign promises. Since then, the President has shifted his views slightly, and has agreed to renegotiate the deal rather than scrapping it in its entirety.

On the other side, Canada and Mexico have been in favor of updating NAFTA, in addition to business lobbying in favor of preserving the agreement, as it covers a total of $1 trillion in trade in North America– in a wide range of products and industries across the countries.

US Perspective

As with any deal, there are pros and cons. For the US, NAFTA has been fruitful for many US industries, like the agriculture industry. However, President Trump persists that the agreement can be linked to the decline in manufacturing jobs. Of course, this is consistent with the protectionist rhetoric that has sprung up in the nation recently.

Ultimately, the US’s goal in this is to lower the trade deficit overall. In addition, the administration has also stated that they wish to strengthen regulations to correctly identify the country of origin.

Canada Perspective

Canada’s position has been in favor of NAFTA, as the agreement has generally benefitted the economy since its activation in 1994. Indeed, the Canadian economy has grown a total of 2.5% more annually than it would have without the agreement being in place.

Canada will be going into the negotiations with the intention of making it more progressive, with benefits for all three nations.

Mexico Perspective

Mexico has been clear that NAFTA has widely contributed to the development of manufacturing plants, and has boosted many industries, such as the agricultural industry, helping them become more internationally competitive. Mexico will be entering negotiations with the goal to ease seasonal workers’ regulations and the integration of telecom markets.

As negotiations go forward, we will get a more clear idea on how this will affect a range of business practices in the three countries. For now, all we can be sure is that the US, Canada, and Mexico will be pushing for NAFTA to further reflect their interests.

U.S. Customs

If you’re a US importer, no matter the scale of your business, it’s more likely than not that Customs and Border Protection (CBP) will audit your operations and your transactional compliance at some point. They may look for a history of compliance errors, poorly defined and documented internal control procedures, or other red flags. It’s important to take it seriously. This is a process that should be handled with the same attention to detail and comprehensiveness as a tax/IRS audit. An unprepared importer can suffer greater penalties, up to and including the loss of import privileges.

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U.S. Customs

Even though there’s no law that says you need to hire a customs broker to get clearance for your goods, there’s a reason so many do. The fact is, navigating import brokerage can be intimidating no matter who you are. Not only is there a lot to learn, but the information is always changing. To avoid a lot of stress and possibly penalties, you’d do well to realize you’re not alone in this process! The right customs broker can benefit your business and make your life easier in more ways than one.

Here are several real-life benefits of appointing a licensed customs broker:

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U.S. Customs

Commercial customs brokers exist to facilitate international trade and to oversee your affairs with an efficient, effective, and hassle-free strategy in place.

Licensed by U.S. Customs and Border Protection, it’s a customs broker’s job to make sure that importers and exporters meet federal requirements for international shipments. They’re responsible for compliance with trade laws and regulations. They advise clients on proper procedures.

In more detail, here are five important things a customs broker can accomplish for you:

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