SECAUCUS, NJ. – Global supply chains have entered a “new era” with tariffs, said Mario Torrico, a senior associate of ArentFox Schiff LLP who provides guidance on international trade laws.

”There are tons of questions, right?” he said in an April 8 panel at SupplySide Connect in Secaucus. “Am I eligible for duty drawback? What does this mean for my bottom line moving forwards? Will the new administration change the tariff rates?

“I wish I had a clear answer, but as an attorney, I’m just reacting.”

Tariffs have ripple effects, Torrico said. Importers downstream in the supply chain who bring raw materials into the country already deal with tight margins.

“So, if you implement a 25% tariff, that is essentially killing their profits,” he said.

Torrico said companies should talk to their suppliers about whether tariffs might bring a force majeure on contracts. Perhaps companies and suppliers could set up a cost-sharing strategy.

Many vitamins, especially those with letters, are not made in the United States, said Larisa Pavlick, regulatory program manager for Informa Markets. The tariffs allow for exemptions for some vitamins, but vitamin D is “strangely missing,” she said. The list of exemptions mentions “other vitamins,” which might or might not include vitamin D, she added.

From left, moderator Cassie Smith of SupplySide, Mario Torrico of ArentFox Schiff LLP, Alex Belknap of Facture, Larisa Palvlick of Informa Markets and Devon Gholam of Step Change Innovations.

Source: Sosland Publishing Co.  

“I’ve heard mixed messages about where botanicals land,” she said.

The Trump administration in general promotes tariffs as an opportunity to bring manufacturing back to the United States, but new plants will take 18 to 24 months to come online, said Alex Belknap, managing partner for Facture who specializes in process development, capital engineering and contract manufacturing strategy.

During the first Trump administration, importers knew China was the “bad guy,” Torrico said. They invested millions of dollars to import out of other countries such as Vietnam, but imports from Vietnam on April 2 of this year were dealt a 46% tariff. Importing from Mexico and Canada has become a supply chain risk as well.

“A lot of times I can’t make sense what’s going on right now and who’s driving these decisions,” Torrico said. “For me, if you want to address China, there’s no need to attack Canada and Mexico while tariffing China.”

Torrico said that the United States needs to have conversations about modifying tariffs that countries impose and that trade with China must be addressed.

“I don’t know if responding with 34% tariffs and perhaps an additional 50% is the right option,” he said.