Why is transit trade the best solution to high tariffs in the USA ?
Transit trade – This is a strategic approach that allows goods to be diverted through third countries such as Malaysia to avoid punitive tariffs. As a freight forwarding company headquartered in Malaysia, TNS Logistics has extensive experience in forwarding and has helped numerous clients successfully cope with the challenges posed by high tariffs in the United States. In this article, we will explore why transshipment trade has become the lifeline of freight forwarders and importers, how it operates, and why Malaysia is an ideal country for cross-border trade logistics and transshipment transportation.
The impact of US tariff policies on global trade
These high tariffs and trade protection measures, while appearing to protect domestic industries in the United States, have brought enormous disasters to the global economy and significant obstacles to importers, including:
- Cost increase: High tariffs have raised the cost of goods arriving at the port, squeezing profit margins.
- Supply chain disruption: Importers face delays and compliance challenges.
- Market uncertainty: Frequent policy changes make long-term planning difficult.
For freight forwarders, these challenges translate into a demand for innovative solutions. Transit trade provides an effective way to bypass these barriers and ensure efficient and economical entry of goods into the US market.
What is transit trade?
Transit trade involves the route of goods passing through intermediate countries before reaching their final destination. In practice, this means that the goods are transported to hubs such as Malaysia, where they are processed, repackaged, or re recorded before being exported to the United States or other markets. The main benefits include:
- Tariff Avoidance: By changing the country of origin, goods may be eligible for lower or zero tariffs under trade agreements.
- Reducing anti-dumping duties: Appropriate documentation and handling can help avoid penalties related to anti-dumping regulations.
- Supply chain flexibility: Transshipment allows businesses to adapt to constantly changing trade policies without interrupting operations.
TNS Logistics is a freight forwarding company located in Malaysia that focuses on coordinating seamless transit processes, ensuring compliance with international trade regulations, and minimizing costs.
Why Malaysia is the perfect transit hub ?
- Strategic Location: Malaysia is located at the crossroads of major Southeast Asian shipping routes, making it easy to enter the global market. Port Klang and Penang are among the busiest and most efficient ports in the region
- Advanced infrastructure: Malaysia has world-class port facilities, warehousing, and logistics networks that enable fast and safe handling of goods.
- Preferential Trade Agreement: Malaysia’s free trade agreements with the United States and other countries allow goods processed in Malaysia to qualify for preferential tariffs.
- Regulatory expertise: The Malaysian customs authorities have extensive experience in handling transshipment goods, ensuring compliance with complex trade rules.
- Cost Efficiency * *: Compared to other hubs such as Singapore or Hong Kong, Malaysia’s competitive labor and operating costs make it an affordable transit option.
Our freight forwarding service team leverages Malaysia’s global freight advantages to provide you with tailored forwarding solutions, helping you save on tariffs while maintaining supply chain efficiency.
How Transit Trade Operates: A Step by Step Guide
- Origin shipment: The goods are shipped from the exporting country (such as China) to Malaysia. Our freight forwarding team coordinates logistics to ensure timely delivery.
- Processing in Malaysia: After the goods arrive, they are unloaded at Malaysian ports or bonded warehouses. According to the requirements, they may experience:
- Repackaging: Concealing the country of origin
- Re label: Complies with US Customs requirements.
- Value added processing: The minimum processing (such as assembly or packaging) that meets the Malaysian origin qualification.
- Prepare Documents: We prepare accurate certificates of origin, bills of lading, and other documents to ensure compliance with US customs regulations.
- Re export : The goods are shipped to the United States from Malaysia’s country of origin and meet the lower tariffs or exemption conditions stipulated in the trade agreement.
- Customs Clearance: Our team ensures smooth customs clearance of your goods at US ports, minimizing delays and compliance risks.
This simplified process significantly reduces operating costs and creates more business profits for you without affecting the delivery time agreed upon in the contract.
Why choose our Malaysia freight forwarding service?
- End to end solution: From origin to destination, we manage all aspects of the transportation process, including customs clearance and documentation.
- Regulatory Compliance: Our team is always aware of US tariff policies and international trade laws to ensure that your goods meet all requirements.
- Cost optimization: We design customized transportation strategies to maximize tariff savings while minimizing logistics costs.
- Trusted Network: Our partnerships with Malaysian ports, warehouses, and shipping companies ensure efficiency and safety.
- Good performance record: We have helped businesses from various industries avoid millions of dollars in tariffs and earned an excellent reputation.
By collaborating with us, you will gain a trusted partner in dealing with the complexity of global trade. We are committed to providing you with one-stop freight forwarding services, reducing the costs you need to pay to earn more profits.
Conclusion
With the continuous adjustment of US tariff policies, transshipment trade will be a powerful tool for global importers and freight forwarders. By leveraging Malaysia’s cross-border physical transportation services and our professional freight forwarding services, your business can avoid high tariffs and maintain competitive prices in the US market.
Don’t let tariffs ruin your business. Contact us immediately to explore how transit trade can save you money and simplify your supply chain. We will ensure the safe transportation of your goods to the United States without the need to pay high import tariffs
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