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The stakes have never been higher. The Trump administration's renewed and expanded Section 301 tariffs targeting Chinese imports now reach up to 100% on strategic goods. Following campaign promises to impose broad tariffs, President Trump's trade policy has significantly impacted global supply chains. The USMCA implementation continues to reshape North American trade rules as customs enforcement intensifies. In this volatile environment, accurate Country of Origin (COO) data isn't just paperwork, it's financial survival. In Trump's second term tariff economy, your bottom line depends on getting Country of Origin right - Down to the SKU.

The Real Cost of Getting COO Wrong

Financial Penalties: U.S. Customs can assess substantial penalties based on the level of negligence:

• Simple negligence: Up to 2x unpaid duties
• Gross negligence: Up to 4x unpaid duties
• Fraud: Up to the full domestic value of merchandise¹

Supply Chain Disruptions: When shipments are held at customs due to Country of Origin discrepancies, the consequences cascade through your business:

• Demurrage fees and storage costs
• Inventory shortages and stockouts
• Missed sales opportunities
• Damaged customer relationships²

Margin Erosion: Unexpected tariffs can instantly transform profitable products into losses. Without accurate COO data at the SKU level, you can't reliably forecast landed costs or make informed pricing decisions.³

Increased Scrutiny: Companies with compliance issues face more frequent inspections, creating a cycle of delays and additional costs. Your reputation with both regulators and consumers is at stake.⁴

Why Most Businesses Are Vulnerable

The Complexity Challenge: Determining the correct Country of Origin isn't straightforward. "Substantial transformation" rules vary by product and trade agreement. Components sourced from multiple countries, assembled elsewhere, with final processing in yet another location—which is the actual origin?⁵

Outdated Tools: Most businesses rely on approaches that simply can't deliver the required accuracy:

• Spreadsheets introduce alarming error rates—studies show over 90% contain critical errors.⁶ JP Morgan lost over $6 billion partly due to spreadsheet errors.⁷
  
  
• Email chains offer no validation, auditability, or centralized visibility—leaving you exposed during customs audits.

The Solution: Structured Data Management with Clover

Clover is purpose-built to solve these exact challenges:

• Supplier-Direct Data Collection: Capture COO information from suppliers through a structured platform that enforces accuracy and completeness.
  
  
• SKU-Level Precision: Maintain Country of Origin data at the granular product level, not just at shipment or company level.
  
  
• Rapid Response Capability: When tariff policies change overnight, instantly identify all affected SKUs and assess financial exposure.
  
  
• Defensible Audit Trails: Automatically track every submission, update, and verification, creating ironclad documentation of "reasonable care."

Beyond Compliance - Strategic Advantage

With accurate COO data, you can:

• Calculate True Landed Costs: Understand the complete picture before placing orders.
  
  
• Make Strategic Sourcing Decisions: Identify opportunities to shift production to mitigate tariff impacts.
  
  
• Respond Faster to Policy Changes: In a world of ongoing trade tensions, agility creates competitive advantage.
  
  

The Time to Act is Now

The global trade environment shows no signs of stabilizing. Companies that can prove the accuracy of their origin data will have a massive operational and financial advantage. The others will be stuck playing defense, reacting to audits, and absorbing unexpected costs.

If your Country of Origin data isn't granular, validated, up-to-date, and ready for both inspection and strategic action, your business has a critical vulnerability that needs immediate attention.

You need Clover.

Contact us today to start transforming the way you manage your supplier relationships. ☘️

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References

¹ 19 U.S.C. § 1592
² Customs Penalties and Fines: Know Before You Ship, usacustomsclearance.com
³ A Guide to China's Section 301 Tariffs (2025 Update)
⁴ How Reasonable Care Affects Import Compliance, PCBUSA
⁵ Rules of Origin: Substantial Transformation, International Trade Administration
⁶ Dartmouth College study on spreadsheet errors, 2025
⁷ Million Dollar Mistakes: Real-World Risks of Spreadsheet Errors, microassist.com

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