Importing and exporting goods is an important part of international trade today. Organizations of all sizes, from large corporations to small businesses, participate in worldwide trade through imports and exports. If you want to engage in the selling of goods, you should be aware of various aspects of importing goods that will prepare you for participation in international commerce. Basics Of Importing And Exporting The majority of businesses—big and small—support worldwide economic growth through trade. In fact, in a study conducted by FedEx, more than four in five U.S. small business leaders stated that increasing international trade would improve the economy. Imports are goods and resources that are sold from one country to buyers in another country. Some goods and services that are imported into the United States require licenses and permits. Exporting goods and resources to a buyer in another country will often require licensing and permits, as well. Participating in the import and export of goods can allow small businesses to grow exponentially by expanding from a local focus to the global marketplace. Paying For Imports And Exports Many businesses who operate in the international trade industry use trade credit, also called trade finance or supplier financing. This is an agreement between parties where the supplier of goods sends products to the importer and no cash is paid up front. Instead, the goods are received with a promise to pay at a predetermined time in the future. If you are exporting goods to another country, you may be expected to extend trade credit to the person who is importing your products. If you are a small business or do not have extensive funds, that can be difficult. Small business funding is often a solution to this problem, with the exporter securing a loan to finance their goods, shipping, and other necessities while they wait on the importer to pay them, per their agreement. Import And Export Licenses And Permits Many goods do not require licenses or permits to import into the United States. However, for certain items, you will need to obtain special certification of some kind from government agencies. To find out if the goods you’re importing require licenses or permits, you should review guidelines from the U.S. Customs and Border Protection (CBP). You can also contact your local port of entry to learn more about the import process in your specific location. Certain goods, such as agricultural food products or alcohol, may require examination and specific entry documentation. Import Filing When you import goods into the U.S., you must complete CBP entry forms within 15 days of receiving shipment to the port of entry. You must include your importer number—your IRS business registration number—on all forms. If you operate a sole proprietorship under your own name, you can use your Social Security number (SSN) as your importer number. Some of the import filing forms you must complete include: Entry Manifest Right to Make Entry Evidence Commercial Invoice or Pro Forma Invoice Packing Lists Goods will be released from CBP custody within 10 working days of their entry into the United States, as long as import filings are complete. There are certain goods that may be released immediately upon arrival. Trade Regulations There are a plethora of trade regulations that U.S. businesses must follow if they want to participate in international trade. Congress, through the Commerce Clause of the U.S. Constitution, has the power to control trade activities between the United States and foreign countries. This includes assigning responsibilities to government agencies to create trade regulations. The International Trade Administration (ITA) is the primary government agency that makes and oversees importing and exporting regulations in the United States. However, if your goods have a military or combined civilian and military purpose, then you may also have to comply with regulations set by the Bureau of Industry and Security (BIS). You must comply with both U.S. and foreign regulations in order to successfully import and export products in the United States. Trade regulations are meant to make international commerce safe and efficient, while also ensuring the best interests of the United States and its citizens are fully respected. Import And Export Taxes Many goods require you to pay special import or export taxes called tariffs or customs duties. Tariffs are used to maintain trade balance. For example, higher tariffs on a particular good may encourage people to buy domestic products. Some countries have lower customs duties than others. Further, if your product is primarily made in the U.S.A. with domestic originating components, it may qualify for duty-free entry under the U.S. Free Trade Agreement (FTA). The United States has FTAs with more than 20 countries, which encourages business with those nations. To determine the tariff rate that will be applied to your goods, you will need to know the classification number—called an “HS (harmonized) code”—for the product. You can look up your HS code on the International Trade Administration (ITA) website and then find your corresponding tariff rate on the Customs Info Database. Import Restrictions In addition to regulating how much of a product enters the United States through tariffs, the government imposes quotas on certain items as well. A quota may limit the number or monetary value of a good that can be imported or exported during a particular period. The United States further restricts importing by completely banning certain items from being brought into the country. A complete list of Prohibited and Restricted Items can be found on the CBP website. Apply For A small Business Loan To Achieve Growth As a small business owner who is engaged in international trade, you may have a lot of questions about operations. This guide, along with government resources, can help you find answers. When you are ready to start or grow your importing or exporting business, apply for a small business loan with Lendio.