Impact of US Reciprocal tariffs for Importing and Exporting Goods from USA

[Sameer Annigeri]

Dear Sir/Madam,

We need one Legal advisory on Impact of US Reciprocal Tariff for following transactions.

1) Indian Entity is sending Material to US for Job Work purpose, after completion of the process, Indian Entity will re-import the material. In this case US is charging Customs duty. Is there any way to get the duty exemption. 

2) US entities sending the material to India for Job Work. After processing the job work service Indian entities will send back (Export) the parts to the USA. In this case what is the customs duty implication in the USA.

Request you to please check and confirm.

[YAGAY and SUN]

 The impact of U.S. reciprocal tariffs on job work transactions depends primarily on whether the movement of goods is structured as a temporary import or as an import for consumption. Where an Indian entity sends material to the U.S. solely for job work and re-imports the same goods after processing, U.S. customs duty, including any applicable reciprocal tariff, can be avoided or substantially mitigated only if the goods are imported under a recognised temporary admission mechanism such as Temporary Importation under Bond (TIB) or, where eligible, an ATA Carnet, subject to strict compliance with re-export conditions and timelines. In the absence of such a mechanism, U.S. Customs is legally justified in levying full customs duty and additional reciprocal tariffs at the time of import. Conversely, where U.S. entities send material to India for job work and the processed goods are exported back to the U.S., the re-importation into the U.S. is treated as a fresh import from India and is ordinarily liable to normal customs duty as well as applicable reciprocal tariffs, unless relief is claimed under specific HTSUS Chapter 98 provisions or through duty drawback mechanisms based on prior duty payment and re-export. Accordingly, to minimise tariff exposure, it is critical that both inbound and outbound job work transactions are pre-structured under appropriate temporary import, re-export, and drawback regimes, with precise customs documentation and compliance at both ends of the transaction.

AI Summary

US reciprocal tariffs apply unless job work imports use temporary admission like TIB or ATA Carnet with strict re export compliance.
Duty and reciprocal tariff exposure for job work shipments depends on whether goods enter the United States as temporary imports or imports for consumption; relief is available only when using recognised temporary admission procedures such as Temporary Importation under Bond or an ATA Carnet with strict re export compliance, otherwise full duties and reciprocal tariffs may be assessed. Conversely, goods returning to the United States after overseas processing are generally treated as new imports liable to duty and reciprocal tariffs absent relief such as HTSUS Chapter 98 provisions or duty drawback, so transactions should be pre structured with appropriate temporary import, re export, and drawback regimes and exact customs documentation.