---
title: "To cope with Trump's tariffs, U.S. importers already have a \"mature tax reduction plan\""
description: "In the face of high tariffs, U.S. importers are widely using legal strategies such as the \"first sale\" rule to reduce tax burdens. This rule allows the tax base to be calculated based on the price of "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/277335138.md"
published_at: "2026-03-01T03:21:17.000Z"
---

# To cope with Trump's tariffs, U.S. importers already have a "mature tax reduction plan"

> In the face of high tariffs, U.S. importers are widely using legal strategies such as the "first sale" rule to reduce tax burdens. This rule allows the tax base to be calculated based on the price of the first transaction in the supply chain rather than the final purchase price, which can significantly reduce taxes. It is estimated that by 2025, importers will collectively pay about $45.7 billion less in tariffs through this method, effectively cushioning the price increase of imported goods. As Congress prepares legislation to close this loophole, this practice is facing tightening policy pressures

American companies are significantly reducing their tariff bills by leveraging a mature legal strategy, particularly effective judicial precedents centered around the "first sale" rule. It is estimated that by 2025, importers will collectively pay about $45.7 billion less in tariffs through this rule and other methods. This practice has prompted bipartisan efforts in Congress to advance legislation aimed at closing this loophole.

The "first sale" rule is a valuation principle of U.S. Customs. According to this rule, when goods are sold to the U.S. through multiple intermediaries, importers can calculate tariffs based on the price of the initial transaction between the manufacturer and the intermediary (rather than the final price the intermediary charges for export to the U.S.). This means that **importers can choose to declare customs based on the lowest initial transaction price, thereby legally reducing the tariff base and lowering their tax burden.**

The Wall Street Journal reports that Republican Senator Bill Cassidy from Louisiana and Democratic Senator Sheldon Whitehouse from Rhode Island have **jointly introduced a bill this February to terminate the applicability of the "first sale" rule.** White House trade advisor Peter Navarro has publicly expressed support, pointing out that law firms in Washington are exploiting this loophole, undermining the actual effectiveness of Trump's tariff policy.

White House spokesperson Kush Desai warned:

> “The Trump administration places a high value on the integrity of the presidential tariff policy, and foreign exporters should think twice before attempting to undermine the U.S. tariff system.”

From a market perspective, **this series of avoidance tactics partly explains why inflation has not surged as expected following significant tariff increases.** Data shows that the prices of imported durable goods rose only 1.3% throughout 2025, far below the predictions of most economists.

## How the "First Sale" Rule Works

The "first sale" rule originates from legal precedents established in the 1980s, **with its core logic allowing importers to use the price of the earliest transaction in the supply chain as the basis for tariff calculation, rather than declaring the actual price paid to the intermediary.**

For example, if a manufacturer sells a sofa to a trader for $200, and the trader resells it to a U.S. retailer for $300. At a 50% tariff rate, under conventional declaration methods, the U.S. importer would need to pay $150 in tariffs; however, if invoking the "first sale" rule and declaring a value of $200, the tariff would only be $100, saving one-third compared to the former.

International trade lawyer and Dorsey & Whitney partner Dave Townsend stated:

> **"If tariffs cannot be avoided, then the only way to reduce the tax burden is to adjust the declared value to some extent."**

Another common practice is "unbundling," which involves separating costs such as insurance and transportation, which are typically not included in the tariff base, from the declared value, thus only paying taxes on the manufacturing cost portion of the product, further compressing the tax burden.

## Significant Avoidance Effects, Inflation Pressure Below Expectations

The actual effects of the aforementioned strategies have been reflected in macro data. The Penn Wharton Budget Model estimates that **by 2025, importers will collectively pay about $45.7 billion less in tariffs through various responses, including stockpiling and applying the "first sale" rule.** \*\*

Analysis from the Yale Budget Lab shows that from January to November 2025, the price of imported durable goods increased by only 1.3% year-on-year, far below the previous expectations of the academic community. During the same period, overall inflation also showed signs of slowing down.

Previously, the "first sale" rule was rarely pursued by companies due to the cumbersome documentation required, especially when tariff levels were low. However, as tariff rates have surged, related podcasts and webinars have rapidly popularized this strategy, and lawyers indicate that this practice has become quite common in the industry.

## Operational Thresholds and Compliance Risks Coexist

**Although the "first sale" rule is legally valid, it still faces multiple obstacles in practice.**

Customs officials remain highly vigilant towards importers who suddenly and significantly lower declared values, concerned about potential fraud risks. For small and medium-sized enterprises, the documentation preparation procedures and corresponding legal fees often deter them. Additionally, to apply the "first sale" price, it must be proven that the goods were clearly directed to the U.S. market at the time of the initial transaction, which is a stringent evidentiary requirement.

Meanwhile, intermediaries from Asian factories are not always willing to disclose actual manufacturing costs. However, lawyers state that as more U.S. buyers demand supply chain transparency, traders who do not cooperate may face the risk of losing orders, and their attitudes are gradually changing.

As an international trade law firm that pioneered this strategy in the 1980s, Sandler, Travis & Rosenberg specifically employs former customs officials to assist in document review and risk assessment. Partner Mark Segrist stated:

> “Our goal is to establish a clear and complete chain of documentation that not only holds up on paper but also withstands substantive scrutiny.”

## Legislative Pressure from Congress, Industry Associations Push Back

Legislative pressure is continuing to intensify. The bill jointly proposed by Senators Cassidy and Whitehouse, **if passed, would directly block the legal tax-saving path of "first sale."** This bill has received public endorsement from White House trade advisor Peter Navarro.

In response, the American Exporters and Importers Association expressed opposition, arguing that if importers are forced to pay higher tariffs, the ultimate costs will be passed on to consumers. The association emphasized:

> “The current first sale system has undergone rigorous scrutiny and has a sound structure and enforcement mechanism.”

Whether this bill can advance will largely determine whether companies can continue to rely on this strategy to hedge against tariff pressures and will directly affect the actual implementation of Trump's tariff policy

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.