EU brands turn to obscure customs clause to soften blow of Trump’s tariffs
By Elisa Anzolin, Mimosa Spencer and Dominique Patton
Paris/Milan (Reuters) -l’oreal and an increasing number of European fashion and cosmetics companies have been investigating the use of an uncertain, known as the “first sales” rule as a potential way to soften the impact of US President Donald Trump’s tariffs.
Trump and the European Commission President Ursula von Der Leyen make an agreement for 15% tariffs in most imported EU goods this week – 10 times higher than the average tariff on EU imports before Trump returned to the White House.
Some clothing and consumer brands pay attention to transfer higher tasks to inflation -worn US consumers through price increases.
Therefore, they want to call the “first sales” rule that allows companies to pay lower tasks by applying tariffs because they leave the factory of a product – much lower than the final retail price.
“This is a part of this possibilities, Nic said L’Oreal CEO Nicolas Hieronimus told Reuters on Tuesday. “We will decide,” he added without a time zone.
Golden Goose, Italy’s senior sneakers manufacturer Golden Goose, External Clothing Expert Moncler and Fashion Label Ferragamo all brands such as the strategy started.
Moncler General Manager Luciano Santel, in a call with analysts, the production cost of production in about half of the import price, “This is an important benefit,” he said.
However, the strategy that can be called only for goods sold in the US and containing multiple foreign transactions is not risk -free. To address the necessary operations, a detailed trail requires a solid grip on supply chains and legal structures.
Consultants, including KPMG and PWC, have seen an increase in questions from companies about how to use this method to alleviate the burden of Trump’s tariffs this year.
“We have three times more demands than usual,” Ruth Guerra, the KPMG partner in Paris, said that the rule can be combined with other measures, including the first sales rule. He said.
Paper trail
In order to benefit from lower customs duties, a company must prove that the US -affiliated products undergo multiple transactions. Generally, this means that goods are sold to a mediator through the factory gate and then to a company that manages goods to a US -based company. All transactions should be clearly handled by different assets in arm length.
PWC Special and Tax Lawyer Francesco Pizzo, usually announced that a US subsidiary is involved in an external organization to avoid explaining confidential information.
