NAVIGATING AN EVOLVING TARIFFS LANDSCAPE
Nicole Porpiglia, Managing Director at KPMG LLP, unpacks the shifting global tariff landscape and what gaming businesses must know ahead of the IAGA Summit conference session in Berlin this June.
Te gaming industry, like many others, is grappling with the complexities of an evolving tariff landscape. In today's globalised economy, tariffs have emerged as a significant factor influencing the operations of companies worldwide, impacting them both directly and indirectly. Recent global trade tensions and shifts in economic policies have added layers of complexity to international trade, affecting the importation of not only gaming equipment but also casino furnishings, fixtures, and equipment (FF&E), as well as other essential products. Tese tariffs are intended to address a range of issues, including trade imbalances and national and economic security, and have implications for gaming companies, casino operators, and those involved in importing and exporting.
UNDERSTANDING TARIFFS A tariff is a tax imposed by a government on imported goods and paid by the importer. Tariffs serve multiple purposes, including protecting domestic industries from foreign competition, generating revenue, and addressing trade imbalances. Te tariff landscape is complex, involving various types of tariffs and regulations that impact international trade.
Types of Tariffs 1. Base Tariffs: Standard tariffs applied to all imports based on the Harmonised Tariff Schedule (HTS). Tey vary depending on the product classification and country of origin. 2. Section 301 Tariffs: Enable the U.S. to impose tariffs in
response to unfair foreign trade practices. Te most well- known application is the Section 301 tariffs on Chinese-origin goods, which range from 7.5 per cent to 50 per cent, depending on the product.
3. Section 232 Tariffs: Authorise the President to impose tariffs if imports are found to threaten U.S. national security. Tese tariffs currently apply to automobiles and their parts, steel and aluminum.
4. International Emergency Economic Powers Act (IEEPA) Tariffs: Can be imposed during a national emergency related to foreign threats. Tey allow the President to regulate commerce and impose tariffs to address the emergency situation. Currently, IEEPA tariffs are imposed on goods with a country of origin (COO) in Canada and Mexico at 25 per cent, and on goods with a COO in China at 20 per cent.
5. Reciprocal Tariffs: Implemented under the IEEPA authority, these are retaliatory tariffs imposed to counter tariffs levied by other countries, aiming to create fair trade conditions. Te U.S. has recently implemented reciprocal tariffs on most imports with specific rates for countries based on trade deficits.
6. Antidumping and Countervailing Duties (AD/CVD): Imposed to protect domestic industries from foreign companies selling goods at unfairly low prices or, in the case of CVD, when products are being imported from foreign manufacturers below fair market value due to a foreign government subsidy.
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