Lawyers for US companies prepare for Donald Trump’s trade war

Lawyers and accountants in Washington are bracing for a big payday as companies prepare for tariffs, export controls and the possibility of a trade war under Donald Trump.

During his first term, Trump made an international impact trade policy from arid economic stagnation to one of the most prominent speeches in Washington as he hit America’s trading partners with massive tariffs and pushed companies to reorganize global supply chains .

Four years later, everyone is ready for the same thing.

“I told my colleagues – we are bringing glamor back to commerce,” said Nicole Bivens Collinson, managing director at the law firm Sandler, Travis & Rosenberg.

Bivens Collinson said the company is considering expanding internationally. “We’re getting a lot of new customers, a lot of new people approaching us,” she said.

Trump won a sweeping election victory last month after campaigning on a pledge to impose tariffs of up to 20% on all imports and 60% on goods from China. From then on he threatened to fight Mexico and Canada with a tax rate of 25%.

In recent weeks, Canadian Prime Minister Justin Trudeau has visited Trump’s Mar-a-Lago resort in Florida and the President of Mexico. Claudia Sheinbaum spoke to Trump by phone. Across Washington, foreign diplomats are plotting strategies to stave off the threats of the erratic president while businesses seek to secure new advisers.

“Things have been busy since 2016, but I can tell you that overnight it has exploded,” said one commercial lawyer at a large company, who did not want to be named. “There is a lot of interest in suing the Trump administration, people around town are preparing to sue.”

Lawyers say the firms they work for want to hire more people to handle the Trump years, and that trade is becoming an increasingly attractive specialty.

In the wake of Trump’s victory, lawyers say companies are looking for help to deal with the slew of national security laws, tax exemptions and product classifications that make the difference between a company escaping the punitive taxes or being taxed out of the lucrative US market.

Some companies are looking for ways to avoid potential tariffs. Under the Trump administration’s latest policy, companies were given the opportunity to apply to be “excluded” from tariffs on imports from China.

From 2018 to December 2020, the Office of the U.S. Trade Representative processed 53,000 requests from companies seeking to avoid tariffs on goods imported from China, despite a regulatory review. The submission shows that nearly 90% of those requests were denied.

Bivens Collinson said some companies are exploring “tariff engineering” by investigating whether they can reclassify their products as products with lower tariff rates.

“Maybe you’ve classified your product as a router for 25 years, but maybe it does a lot of other things now – is it even a router or can we classify it? into something else?”

Accounting firms have also been selling clients advice on how to navigate the new landscape. These groups often have advisers who can help companies navigate customs issues and warn customers that they should be ready to act quickly as backlogs grow as Trump introduces tariffs had goals in his first administration.

“Clearly, customs and trade groups are not the largest part of the industry,” said Mark Ludwig, head of national trade advisory services at RSM US, the largest accounting firm in the United States. company, but this is the right time for such activities, including ours.” outside the Big Four.

RSM persuaded customers to use what Ludwig called an “underrated” mechanism to minimize tariffs. These include bonded warehouses, secure facilities where imported goods can be stored before tariffs are applied, or duty-free programs through which tariffs can eventually be refunded if the goods are later export.

“For most of my career, average tax rates were very low, but now experts in these schemes can help companies save much more significant amounts of money,” he said.

Companies are also focusing on realigning their supply chains to avoid tariffs targeting specific countries.

Steve Orava, international trade partner at the Washington law firm King & Spalding, said the company’s focus on domestic manufacturing is in “high demand.” This company is where Trump’s nominee for US trade representative, Jamieson Greer. “We get a lot of calls from all industries, companies and trade associations,” Orava said.

At Akin Gump, one of the largest regulatory and lobbying groups in Washington, Stephen Kho, a partner in international trade policy, said groups within the firm are “getting bigger” and more open. extends beyond the scope of the rule of law.

“To serve clients now, you don’t just need lawyers, you need good political sense, politicians, former politicians and a bit of psychology,” Kho said. “I think it’s a much more complex operation and that means we need more people.”

Kho said that under Trump, political instincts are more important than under President Joe Biden.

“The political part was so blatant under Trump, and it feels like it’s even more so now.”