The 2025 tariff environment is the most operationally complex for NJ importers in a decade. Section 301 tariffs on Chinese-origin goods continue to apply at 7.5–25% with proposed escalations under review. Section 232 tariffs affect steel and aluminum inputs. The capital implications are substantial — and they require financing structures that most NJ importers don't currently have in place.
How Tariffs Restructure Your Capital Stack
Pre-tariff $1M FOB import (consumer goods, Vietnam origin, 12% base duty):
- Duty liability: $120,000
- Total landed cost: $1,120,000
- Required working capital for duties: $120,000
Post-Section 301 reclassification (if goods rerouted from China, 25% tariff rate):
- Duty liability: $250,000
- Total landed cost: $1,250,000
- Required working capital for duties: $250,000
- Incremental capital requirement: +$130,000 per $1M PO
For an importer running $5M in annual PO volume, a 13-point tariff rate increase creates $650,000 in additional annual working capital requirements — simply to pay duties at the same volume level. Most importers' current financing facilities were sized before this tariff environment and are now structurally undersized.
Country of Origin Compliance: The Hidden Tariff Risk
Country of origin (COO) compliance is a CBP enforcement priority in 2025. Transshipment — routing Chinese-origin goods through Vietnam, Malaysia, or Mexico to claim lower tariff treatment — carries severe penalties: back-duties, interest, penalties up to 4x duties owed, and potential criminal referral for fraud.
For Sentinel financing: COO verification is part of Sentinel's standard underwriting review. For facilities above $750K, Sentinel reserves the right to request COO documentation from the overseas manufacturer. This protects both the importer and Sentinel from facilities based on non-compliant supply chains.
Forward-Buying Strategy: The Capital Case
When credible tariff increases are announced but before their effective date, institutional importers execute forward-buying programs — importing larger volumes than immediately needed to lock in lower landed costs.
Forward-buy economics example:
- Current duty rate: 7.5%. Proposed rate: 25%. Effective in 90 days.
- Import $2M of additional inventory now at 7.5% vs. 25%: duty savings of $350,000
- Sentinel facility cost for $2M, 120-day term at 3.5%: $70,000
- Net forward-buy benefit: $280,000
For established clients with creditworthy buyers, Sentinel can structure temporary facility increases for documented forward-buying programs. Requirements: confirmed buyer POs supporting the forward-buy volume, warehouse capacity confirmation in Carteret or adjacent NJ markets, and a clear repayment schedule tied to buyer order delivery timeline.
Interactive: PO Stepper — Tariff Impact Modeler
Lateral Relevancy
Tariff volatility makes compliance more expensive — and more consequential. Ensure your compliance infrastructure is ready for high-tariff volume.
Ready to restructure your facility for the 2025 tariff environment? Initialize your Funding Analysis or call (888) 653-0124.
DISCLAIMER: Sentinel Trade Finance | Carteret, NJ 07008 | (888) 653-0124 | Tariff rates and regulations are subject to change without notice. This content reflects publicly available information as of early 2025. Verify current rates with a licensed customs broker. Not legal, tax, or trade advisory. Financing subject to underwriting and approval.