Partner Mark Aiello was quoted in a Crain’s Detroit Business article, “Suppliers look for ways around tariffs,” about how some auto suppliers are trying to sidestep the impact of the recent tariffs on steel and aluminum products. As the trade war with China escalates, some smaller auto businesses are seeking risky alternatives to passing through their higher materials costs to their customers. Some are trying to reclassify products and, thus skirt tariffs, without permission from customs and taking the risk that customs officials will later agree with the reclassification or not notice the change.
“I can’t tell you I’ve never seen a company (knowingly violate classification rules), but the penalties are very stiff,” Aiello said. “No one has come to me to ask if they should do this, as I’d actively recommend they do not do it, but I guess if someone was going to take this route they wouldn’t go ask their lawyers.”
Nonetheless, suppliers are all combing over their product classifications to determine whether they are coded accurately in the event they could be changed to avoid tariffs, Aiello said.
“There are a lot of questions coming in (to the firm) about classifications,” he said. “It’s part of a multifaceted strategy to really determine their exposure to these tariffs and future tariffs.”