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Understanding Import Tariffs: Who Pays Them?

Anna Thompson
Anna Thompson
Discover the content team
5 min read
graphic image GPS, packages and shipping activities
This article covers
Who pays tariffs on imports and how these costs affect SMEs
The impact of US import tariffs on international shipping and logistics
Actionable strategies for SMEs to reduce risk from foreign import tariffs

US tariff updates are changing rapidly, creating uncertainty for Romanian businesses shipping to the United States. However, there’s no need to worry—this guide provides essential insights to help SMEs navigate evolving trade policies and keep international shipments running smoothly.

What are tariffs and how do they work?

Tariffs are taxes or duties imposed by governments on imported goods. They are a key tool in international trade policy and directly affect the cost of bringing products into a country.

Tariffs serve two primary purposes. First, they protect domestic industries by increasing the price of foreign goods, making locally produced products more competitive. Second, they generate government revenue, which is especially important for economies that depend heavily on international trade.

In the United States, tariffs are collected by Customs and Border Protection (CBP) at ports of entry nationwide. The amount owed depends on several factors, including the product’s classification code (HS code), declared value, country of origin, and applicable shipping or freight costs.

Who pays tariffs?

In most cases, the responsibility for paying tariffs is determined in advance between the shipper and the recipient. This agreement is defined by the shipment’s Incoterms®—a standardized set of international trade rules that specify responsibilities for shipping, insurance, export and import procedures, and the payment of duties and taxes.

Incoterms® also clarify when the risk transfers from the seller to the buyer, ensuring both parties understand their obligations. By clearly defining who pays tariffs and handles logistics, these terms help streamline international shipping and avoid unexpected costs.

 

The Impact of US Tariffs on Small Businesses

In recent months, the United States has introduced a series of tariffs, particularly targeting imports from China, the EU, and other global markets. These trade measures have created significant challenges for small and medium-sized enterprises (SMEs), which often operate with tighter profit margins and less flexibility than larger corporations.

Frequent and rapidly implemented policy changes have left many SMEs struggling to adapt, while still meeting customer expectations for fast, reliable delivery to the US market.

At the same time, ongoing trade tensions have driven up shipping and freight costs—especially on high-volume routes such as Asia to the United States. Many businesses have been forced to reroute shipments, avoid certain ports, or navigate more complex customs procedures. Tariff-related inspections and delays have also led to additional expenses, including demurrage fees, storage costs, and unexpected logistics charges.

One of the biggest challenges for SMEs is deciding who absorbs these increased costs. For many businesses, covering them internally is not sustainable, while passing them on to customers can reduce price competitiveness. Despite these pressures, there are practical strategies SMEs can adopt to better manage tariff impacts and maintain efficient international shipping operations.

How can businesses mitigate the impact of US tariffs?

To lessen the impact of tariffs introduced this year, businesses should take strategic steps to adapt. Here’s how:

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1. Take a proactive approach

Begin by carrying out a detailed supply chain audit to identify where your business may be exposed to tariffs. Start by asking key questions such as:

  • Which components or raw materials are imported?
  • What countries are these goods sourced from?
  • Are any of these products currently subject to tariffs or at risk of future duties?

Using tools like supply chain mapping software or even structured spreadsheets can help you visualize and assess potential risks. Gaining this level of insight enables your business to anticipate cost increases, reduce disruption, and adjust sourcing or procurement strategies proactively.

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2. Reduce Tariff Risk by Expanding Your Supplier List

Rather than relying heavily on a single country – particularly those subject to high tariffs – your business can:

  • Seek out alternative suppliers in countries with which the US has favorable trade agreements (e.g., certain Southeast Asian nations).
  • Consider nearshoring or reshoring to reduce dependence on international shipping and avoid geopolitical risks.

Diversification will not only help your business reduce tariff exposure but also enhance resilience against other disruptions like pandemics or natural disasters.

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3. Explore new markets

There’s a big world out there! If US tariffs are cutting into your profit margins, you can consider other markets:

  • Domestic markets, where tariffs are not a factor.
  • Expand into other countries or regions where trade conditions are more favorable and tariffs are lower.
  • Target emerging markets with growing demand for your products and fewer trade barriers.
  • Look into regional trade agreements your country is part of, which might open doors to neighboring markets.

By not relying solely on the US, you’ll reduce your exposure to tariff-related risks and open up new revenue opportunities elsewhere.

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4. Build strong relationships with trade and logistics partners

Strong partnerships can offer more flexibility and better pricing during turbulent times:

  • Work closely with freight forwarders, customs brokers, and logistics providers to understand shipping timelines and costs.
  • Develop relationships with suppliers that allow for better negotiation on terms or alternative sourcing options.
  • Foster transparency and collaboration throughout the supply chain to make joint decisions that benefit all parties.

Reliable partners are crucial when adapting logistics strategies or when immediate shifts in supply are needed.

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5. Stay informed about tariff updates

US tariff policies can change rapidly, often with little advance notice. To stay competitive, SMEs should take proactive steps such as:

  • Monitoring updates from the Office of the United States Trade Representative (USTR) and the Department of Commerce
  • Subscribing to industry newsletters or joining trade associations/ chamber of commerce for timely insights and policy analysis
  • Working with customs brokers or trade compliance experts to manage complexity and stay ahead of regulatory changes

Staying informed allows your business to respond quickly—whether by adjusting inventory levels ahead of new tariffs or shifting to alternative markets.

For SMEs, adapting to tariffs goes beyond managing costs; it requires building long-term resilience. By focusing on supply chain diversification, expanding into new markets, and strengthening strategic partnerships, businesses can not only navigate changing trade policies but also position themselves for sustainable growth.

US tariffs: FAQs

In general, responsibility for payment of the tariff will be agreed between the shipper and recipient upfront. This forms part of the shipment’s Incoterms®  – a uniform set of international trade standards that outline who is responsible for transportation, cargo insurance, export and import formalities, payment of duties and taxes, and at what point risk transfers from the seller to the buyer.

Key reasons include:

  • To protect US jobs and industries.
  • To reduce trade deficits.
  • To punish countries accused of intellectual property theft or unfair trade practices.
  • To rebalance trade relationships in favor of the US.

  • Increased costs on goods exported to the US.
  • Sudden changes with little notice, making it hard to plan.
  • More expensive shipping and customs processes.
  • Disrupted supply chains.
  • Difficulty meeting price and delivery expectations for US buyers.

Some options include:

  • Shifting manufacturing or sourcing to tariff-free countries.
  • Applying for tariff exclusions (in some cases).
  • Re-negotiating supply chain terms.
  • Exploring alternative markets beyond the US.

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