Letter from the President
Dear Valued Clients and Partners,
As we move through 2026, one thing remains clear: global trade is not getting simpler. Tariff pressure continues across multiple fronts, customs enforcement expectations are rising, and geopolitical developments are influencing freight markets and sourcing decisions in real time. For importers and exporters alike, the environment demands more than quick reactions. It requires structure, foresight, and a long-term strategy.
Throughout this quarter’s newsletter, you will see a common theme emerge. Businesses are shifting from reactive decision-making to proactive trade management. Whether evaluating exposure to Sections 301, 122, and 338 tariffs, strengthening engagement with trade associations, or preparing for stricter FTZ audit expectations, successful companies are planning earlier and operating with greater discipline.
We are also seeing more organizations recognize that customs compliance, logistics planning, and duty strategy can no longer operate in separate silos. Today’s market rewards businesses that connect those functions and respond quickly when conditions change. From geopolitical shipping risks in key trade lanes to continued cost pressure at the border, preparedness has become a competitive advantage.
At ITC Diligence, our role is to help clients navigate that complexity with confidence. We are proud to support companies through practical consulting, Foreign Trade Zone expertise, customs brokerage coordination, and the growing adoption of our Managed Services solutions. Since launching late last year, Managed Services has gained strong momentum as businesses look for dependable trade support without adding internal burden. In response, ITC has continued investing in experienced customs, FTZ, and compliance personnel to ensure clients receive the operational support and expertise needed in today’s evolving trade environment.
Thank you for your continued trust in ITC Diligence International. We value the opportunity to support your business and look forward to helping you stay compliant, agile, and well-positioned for what lies ahead.
Sincerely,
David Harlow
President & CEO
ITC Diligence International
Tariff Policy Remains in Focus as Importers Plan for Q2 2026
As Q2 2026 continues, adherence to tariff policy remains one of the most important cost and planning variables for U.S. importers. While many businesses hoped for broader duty relief entering the year, several trade authorities remain active, and newer tariff mechanisms are drawing renewed attention.
For importers, the current environment requires planning around multiple policy tools rather than watching a single program.
From Section 301 to emerging discussions around Sections 122 and 338, US import tariffs continue to shape sourcing decisions, landed cost, and long-term supply chain strategy.
Section 301 Still Drives Day-to-Day Exposure
Section 301 remains the most immediate concern for many importers, particularly those sourcing from China. Duties on electronics, machinery, industrial inputs, and consumer goods continue to affect pricing and procurement strategies.
Although targeted exclusions have been extended in certain categories, broad rollback has not occurred. Many companies now view Section 301 as an ongoing operating condition rather than a temporary measure.
Section 122 Has Reentered the Conversation
Section 122 of the Trade Act of 1974 allows temporary import surcharges or quotas in response to serious balance-of-payments deficits. While not commonly used in recent decades, it has recently reappeared in policy discussions as a potential tool for broad tariff action.
For importers, even the possibility of a temporary across-the-board surcharge is enough to warrant scenario planning, especially for high-volume import programs.
Section 338 Draws New Interest
Section 338 of the Tariff Act of 1930 gives authority to impose retaliatory duties against countries that discriminate against U.S. commerce. Historically rare, it has recently gained renewed attention in broader tariff discussions.
While no major implementation has occurred, the significance lies in what it represents: the authority of older US import tariffs are no longer being viewed as dormant. Businesses should expect policymakers to consider a wider range of trade tools in the years ahead.
What Do Tariff Policy Changes Mean for Importers?
Companies that prepare early tend to respond faster when policy shifts occur. Rather than waiting for certainty around US import tariffs, many companies are taking a more practical and proactive approach:
- Reviewing tariff exposure by product and supplier
- Reassessing sourcing concentration risk
- Exploring Foreign Trade Zones to support weekly entry benefits, duty deferral, and merchandise processing fee savings
- Tightening classification and country-of-origin controls
- Building multiple tariff scenarios into 2026 budgeting
Evaluate Your Tariff Exposure with ITC
At ITC Diligence, we help importers evaluate exposure across current and emerging tariff programs, identify duty mitigation opportunities, and build sourcing strategies that hold up under changing trade conditions.
When multiple tariff tools are in play, preparation is key.
International Trade Associations Become a Competitive Advantage in 2026
As trade policy grows more complex in 2026, many importers are realizing that staying informed requires more than monitoring headlines. Tariffs, enforcement actions, market access changes, and customs updates are moving quickly, making engaging with international trade associations more valuable than ever.
For businesses that rely on imports or exports, active participation in industry associations can provide early insight, stronger advocacy, and a clearer view of where trade policy may be headed next.
Why Do International Trade Associations Matter Now?
Trade associations often serve as the bridge between industry and government. They monitor legislative proposals, participate in regulatory comment periods, and communicate business concerns directly to policymakers.
In today’s environment, that role is especially important as companies navigate:
- Ongoing tariff uncertainty
- Customs enforcement trends
- Market access negotiations
- Supply chain security requirement
- New trade agreement implementation
For many companies, associations provide a faster and more focused source of intelligence than waiting for policy changes to become final.
A Voice in Policy Discussions
One of the greatest advantages of trade association engagement is collective advocacy. While a single company may have limited influence, associations representing an industry often carry meaningful weight when speaking with regulators, lawmakers, and agency officials.
That influence becomes especially important when governments evaluate tariff exclusions, industry-specific duties, customs modernization efforts, infrastructure priorities, or regulations that may affect competitiveness.
Businesses that stay engaged through these organizations often gain earlier visibility into policy direction and a stronger ability to prepare before changes take effect.
Operational Benefits Beyond Advocacy
Trade association engagement goes much further than Washington or policy debates. Many organizations provide practical support that can improve day-to-day operations.
This can be especially valuable for internal teams that need current information but have limited bandwidth.
Members often gain access to:
- Compliance webinars and technical updates
- Benchmarking with peer companies
- Supply chain trend data
- Networking with logistics and customs professionals
- Best practices for emerging trade risks
How Companies Are Responding in 2026
Rather than treating membership as passive, many businesses are becoming more intentional about how they participate. Common approaches include assigning internal leaders to track updates, joining sector-specific trade groups, and participating in customs or logistics committees where practical issues are discussed.
Others are using association insights to support budgeting, sourcing decisions, and compliance planning. In many cases, the most successful companies are those that treat trade association engagement as an active business resource rather than a line item on a membership roster.
Engage with A Local Trade Association Today
At ITC Diligence, we help clients translate policy developments and industry trends into practical customs and supply chain strategies. We also understand the value of strong trade association engagement in helping businesses stay informed and prepared.
Employee Spotlight: Rachel Flores, CZS
Zone Specialist
When Rachel Flores joined ITC Diligence, she was looking for an environment that valued growth, teamwork, and continuous learning. ITC’s commitment to training and professional development immediately stood out to her, and it did not take long for Rachel to feel like she had found the right fit.
What impressed her most during those first few weeks was the way the team works together. “Everyone is willing to help and share knowledge,” Rachel notes. Across departments and responsibilities, there is a genuine willingness to share knowledge, answer questions, and support one another. That collaborative culture helped make her transition seamless and reinforced ITC’s reputation for combining expertise with approachability. “That made the onboarding process smooth and reinforced that ITC values teamwork as much as expertise.”
Since joining the company, Rachel has enjoyed seeing firsthand how Foreign Trade Zones are becoming more important to businesses across a wide range of industries. What was once viewed primarily as a compliance tool is now being recognized as a strategic advantage for companies looking to improve efficiency, manage costs, and strengthen supply chains. Being part of that shift has made the work both exciting and meaningful.
Of ITC’s core values, ‘Integrity’ resonates most strongly with Rachel. In the world of customs and trade compliance, accuracy and accountability are essential.
She believes doing the right thing, even in the smallest details, is what builds long-term trust with clients and creates lasting success.
What Rachel enjoys most about international trade is that no two days are ever the same. The pace is fast, the challenges are real, and there is always something new to learn. Looking ahead, she is eager to continue expanding her knowledge beyond FTZs and deepen her understanding of the broader global trade landscape.
Outside of work, Rachel enjoys spending time with her grandkids and getting out on the open road. She recently sold her Harley, but those who know her would not be surprised if another motorcycle finds its way into the garage soon.
We’re proud to have Rachel as part of the ITC team and excited for the value, energy, and professionalism she brings to our clients every day.
Dato curioso
Inside the Zone
A Look at the Scale of FTZ Activity Managed in 2025
In 2025, ITC-supported the following FTZ operations:
- More than 30 FTZ locations across the United States have been represented
- Over 1,600 employees represent FTZ jobs
- Approximately $1.3 billion in total inventory value was received
- Nearly $250 million in exported or destroyed merchandise that avoided duty and tariff payment
The activity spanned industries ranging from electronics and automotive components to machinery, consumer products, and advanced manufacturing materials, with imports arriving from dozens of countries worldwide.
Behind every number is a coordinated effort involving customs compliance, inventory control, logistics planning, and strategic trade management.
Client Spotlight: American Furukawa, Inc.
Advanced Manufacturing Powered by Reliable Trade Execution
This quarter, we’re spotlighting American Furukawa, Inc., a respected manufacturer supporting the automotive and industrial sectors through advanced engineered products and precision components. As part of the globally recognized Furukawa organization, the company plays an important role in supplying technologies that support vehicle systems, electronics, and modern manufacturing applications.
With complex supply chains, time-sensitive production schedules, and cross-border material movement, American Furukawa depends on logistics solutions that deliver consistency, compliance, and operational efficiency.
Partnering with ITC Diligence International
ITC Diligence works closely with American Furukawa to support customs compliance, import coordination, and reliable cargo movement aligned with manufacturing demands. In an environment where timing and accuracy are critical, our team helps ensure shipments move efficiently while maintaining full regulatory confidence.
By aligning customs processes with operational requirements, ITC helps American Furukawa reduce avoidable delays, improve visibility across import activity, and maintain the steady flow of materials needed to support production.
Delivering Operational Stability and Compliance Confidence
Through this partnership, American Furukawa benefits from a trade support framework designed to strengthen day-to-day execution and long-term resilience:
- Efficient customs processing that supports production continuity
- Accurate documentation and filing controls that reduce compliance risk
- Responsive coordination for time-sensitive inbound shipments
- Scalable support as operational needs evolve
This approach helps protect supply chain performance while giving internal teams greater confidence in an increasingly complex trade environment.
Our collaboration with American Furukawa reflects how strong customs management and responsive service can support world-class manufacturing operations. We value the opportunity to be a trusted partner and look forward to continued success together.
FTZ Program Update
Audits Are Getting Stricter with the FTZ Program in 2026
With the FTZ program experiencing growing participation, there has been a marked increase in regulatory scrutiny. In 2026, many FTZ operators are seeing stronger enforcement expectations from U.S. Customs and Border Protection, particularly around inventory controls, admissions accuracy, reconciliation procedures, and recordkeeping.
For companies operating in an FTZ, the value of the program remains significant, but the margin for error is getting smaller.
Why is FTZ Program Oversight Increasing?
Foreign Trade Zones play a larger role in duty mitigation, tariff planning, and supply chain strategy than ever before. As more companies rely on FTZs for operational advantage, CBP continues to emphasize that program benefits must be supported by disciplined FTZ compliance.
For operators, this means zone activity must be as reliable administratively as it is financially beneficial. Recent enforcement trends suggest increased focus on:
- Inventory system accuracy and audit trails
- Timely and correct admissions reporting
- Reconciliation of shortages, overages, and adjustments
- Proper use of zone status classifications
- Retention of supporting records and transaction history
Common Risk Areas for Operators
Many FTZ issues do not begin with major violations.
They often start with small process gaps that compound over time, for example, manual inventory workarounds outside approved systems, or delayed reporting of transfers or withdrawals.
Additionally, having inconsistent procedures across shifts or facilities, or missing documentation tied to admissions activity.
Even a lack of internal reviews before annual reporting cycles can create FTZ compliance problems, and when these issues remain unresolved or overlooked, they can create exposure during CBP reviews or site visits.
ment between FTZ operations, customs strategy, and financial planning
What Leading FTZ Operators Are Doing Differently
Companies with strong Foreign Trade Zone planning are treating compliance as an ongoing discipline rather than a year-end exercise. Many are investing in:
- Periodic mock audits and self-assessments
- Updated standard operating procedures
- Stronger training for internal teams
- Better system controls and reconciliation routines
- Professional oversight through managed FTZ support
This proactive approach often reduces disruption and improves confidence during official reviews.
Strengthen Your Process with ITC
The most successful implementations of Foreign Trade Zones today aren’t simply focused on savings. They are designed to withstand scrutiny while supporting larger business goals.
In a higher-enforcement environment, companies that combine operational efficiency with strong controls are best positioned to maximize FTZ value over the long term, while maintaining FTZ compliance.
Strengthen Your Process with ITC
At ITC Diligence, we help FTZ operators strengthen compliance readiness through mock audits, operational reviews, annual reporting support, and Managed Services solutions. Our team works with clients to identify gaps early and keep Foreign Trade Zones aligned with current expectations.
As audits become stricter in 2026, preparation is one of the smartest investments an FTZ operator can make.
Logistics and Trade Industry Updates Global Trade Disruptions Create New Pressure as Geopolitical Shipping Risks Return
As mid-2026 approaches, the logistics environment is showing signs of recovery in some areas while new geopolitical risks create fresh uncertainty and global trade disruptions. U.S. import volumes have strengthened compared with late 2025, port congestion has eased in several regions, and freight markets are more stable than they were during prior disruption cycles.
At the same time, rising conflict involving Iran, continued Red Sea security concerns, and broader geopolitical tension across key trade regions have reminded businesses how quickly global shipping conditions can change.
U.S. Imports Rebound, But Global Trade Disruptions Remain
Recent trade data points to stronger inbound cargo volumes as importers replenish inventory and continue adjusting sourcing strategies. Many companies remain active in nearshoring and supplier diversification, particularly across Mexico, Southeast Asia, and regional manufacturing hubs.
This rebound suggests continued demand, but many businesses are still cautious and remain focused on supply chain risk management. Tariffs remain in place across several major sectors, and cost planning continues to be shaped by duties, freight expense, and shifting policy signals.
Strait of Hormuz Risk Returns to the Spotlight
The Strait of Hormuz remains one of the most important chokepoints in global trade, particularly for energy markets. A significant share of the world’s oil and petroleum shipments move through this narrow waterway.
As tensions involving Iran have escalated, markets have responded with renewed concern over:
- Potential vessel disruption or rerouting
- Higher marine insurance and war risk premiums
- Rising fuel costs that can impact ocean and domestic freight
- Broader schedule instability across global shipping networks
Even companies with no direct Middle East exposure can feel the downstream effects through transportation costs, container availability, insurance premiums, and supply chain timing.
Tariffs Still Shape Trade Decisions
While geopolitical headlines dominate attention, tariff policy remains a daily operational issue for importers. Section 301 and Section 232 duties continue to affect sourcing choices, supplier relationships, and landed cost strategy making supply chain risk management a persistent top priority.
In many cases, geopolitical pressure and trade policy are now moving together, making tariffs both an economic tool and a strategic one.
Many businesses are now managing tariff pressure and logistics risk at the same time. That has accelerated interest in:
- Multi-country sourcing models
- Foreign Trade Zones and duty mitigation tools
- Buffer inventory in key markets
- Stronger coordination between customs and logistics teams
Preparedness Is the Competitive Edge
The current environment favors businesses that build supply chain risk management proactive and early rather than react and scramble late. Improved shipping conditions are welcome, but they do not eliminate the possibility of sudden disruption tied to regional conflict, fuel markets, labor issues, sanctions, or rapidly changing trade policy.
Companies that combine operational flexibility with disciplined customs strategy are better positioned to navigate what comes next.
Get Ahead of Geo-Political Risk with ITC
In 2026, geopolitics is no longer a background risk. It is actively shaping freight costs, sourcing strategy, and market access.
At ITC Diligence International, we help importers respond to changing logistics and trade conditions through practical customs planning, duty mitigation, and supply chain support. When global conditions shift, preparation becomes one of the most valuable assets a business can have.
