Selling to the USA – Overview
Selling to the USA – The United States (US) is the world’s most significant, most competitive and technologically advanced economy. It has an annual Gross Domestic Product (GDP) of over US$27.36 trillion (source: Bureau of Economic Analysis). In 2023, the US had 25.8% of the world’s Gross Domestic Product (GDP) (source: Statistical Times).
The US is the largest economy in the world (source: World Economic Forum). It has a stable government and effective legal and robust regulatory systems. The US has over 339 million people, with 63.72% of the population between the ages of 15-64 (source cia.gov).
USA Business Culture
- Business is conducted in English.
- Face-to-face business meetings are considered essential in developing and maintaining business relationships. Americans like to build relationships through business.
- Be punctual; so arrive at a meeting 10 minutes before the appointed time.
- When presenting to Americans, one will generally receive polite and encouraging feedback. However, this may not mean they are interested in the product or service.
- Negotiations and counter-offers are part of the business culture in America. Prepare your pricing and offers to be able to accommodate this process.
- Americans like to get straight to the point; this is expected and appreciated during negotiations.
- Therefore, Americans can be very blunt. While this directness may be considered rude in some business cultures, there generally is no malice intended.
- Americans like to work with very detailed contracts.
- It is common for lawyers to check and review any contracts.
- After a meeting, an immediate follow-up is expected.
- If you are unsure of the dress code for your industry in the US, it is best to dress conservatively in a business suit. American business people are sensitive to dress standards.
- Any agreed delivery dates and agreed quantities must be achieved.
Setting up in the United States
So, Are you looking for new customers in the USA? If so, please get in touch with me, and I would be delighted to provide you with the names of buyers in the USA for your product.
So, it must be remembered that the US is a federal system and not a single market. Therefore, each state should be considered a separate entity with its practices and procedures. Finally, when setting up in the US, you need to determine the implications of how the regulations and rules of each state could alter the approach you can use to develop business within that state.
The US market can be segmented geographically into seven regions:
– Northeast (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont)
– Mid-Atlantic (Delaware, Maryland, New Jersey, Pennsylvania and Washington DC).
– Midwest (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin).
– The West (Alaska, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming).
– The South (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia)
– Southwest (Arizona, Oklahoma, New Mexico and Texas)
– Alaska & Hawaii
Therefore, when deciding to enter a new market, you must consider the following questions:
1. Is there a market for your product or service?
2. Is your pricing competitive compared to other market competitors?
3. Do you need to localise your product?
So, Businesses wishing to enter into the US market have a variety of options, including:
- Selling online to customers in the US.
- Using local US representation and export to the US.
- Establishing a US subsidiary or trading.
- Entering into a joint venture or strategic alliance with an existing US business.
- Buying an existing US business.
Incidentally, Delaware is the state of choice for many international companies to incorporate because US venture capitalists will only invest in Delaware-based companies, as Delaware has the most sophisticated and company-friendly corporate laws in the United States.
Banking and Finance
The unit of legal tender in the United States is the US dollar US$
The United States’ banking and financial systems are very advanced and globalised. Many of the world’s leading retail and investment banks are in the US.
Setting up a bank account in the US can be challenging, as most banks require a US credit score. So, it might be worth seeking advice from your local bank on how to open a US-based bank account.
Incidentally, foreign exchange regulations have little impact on the US. There are no restrictions on the amount of capital moved in and out of the US.
Selling to the USA – Tariffs and Non-Tariff Barriers
Tariff
So, the US is a very open economy. It enjoys trade agreements with many countries and trading blocs worldwide. Until recently, the US had imposed low trade tariffs on imported products. However, the US has been actively using import taxes and import levies to try to regain the US’s influence in global trade. Therefore, it is recommended that you research this through your local government trade support office.
Therefore, when exporting to the US, you must use the service of a licenced US Customs broker. The Customs Broker will be able to assess the tariff classification, quota compliance and anticipation of difficulties in the entry of products you export to the USA. If you require a US customs broker, please contact me, and I will be delighted to link you up with a US Customs licence broker.
Finally, all goods that enter the USA are categorised according to the Harmonised Tariff Schedule. Import regulations can and do change without notice. It is advisable always to check to ensure that there have been no tariff changes for your goods.
Non-tariff barriers
The foreign exporter should make sure that the United States importer has been provided with proper information so the importer can:
- Submit the necessary information concerning packing, labelling, etc., and
- Make arrangements required for entry of the merchandise into the United States.
There are several regulatory requirements concerning product safety. The Consumer Product Safety Improvement Act (CPSIA) covers items such as children’s products and durable infant and toddler products. It also requires domestic manufacturers or importers of non-child products to issue a General Certificate of Conformity (GCC). These GCC’s apply to products subject to a consumer product safety rule or any similar CPSC rule, ban, standard or regulation enforced by the Commission.
The US Food and Drug Administration (FDA) monitor and regulate the following products which are imported into the US:
– food
– drugs
– medical devices
– radiation-emitting products
– vaccines, blood and biologics
– animal and veterinary
– cosmetics
– tobacco products.
Please click on this link for detailed information (from page 106) on Prohibitions, Restrictions, Other Agency Requirements for importing products into the USA.
Insurance
It is usual for US vendors to require product liability insurance and adequate coverage from their suppliers. This coverage should be appropriate to cover products, the company’s directors and the company’s officers.
If you require USA Insurance, please contact me, and I will be delighted to provide you with the name of a reputable US Insurance company.
Product labelling, certification and packaging
The Fair Packaging and Labelling Act controls labelling requirements for consumer commodities. It is enforced by the FDA and Federal Trade Commission (FTC) and requires:
- Product identification.
- Name, place of business of the manufacturer, packer or distributor.
- Net quantity of contents (both metric and US customary) units.
The FDA has specific labelling requirements for food, drugs, cosmetics and other products.
- The US Customs checks products to make sure that they meet the packing and labelling requirements.
- Labels for food items must list the nutritional value and list all the ingredients in order from the largest to the smallest.
- So, if you export foodstuffs or pharmaceuticals to the US, you must submit your labels to the US FDA for approval before products are exported to the USA.
- To access information on labelling requirements for textiles and wool products, please visit Threading Your Way Through the Labelling Requirements Under the Textile and Wool Acts.
- Apparel items are subject to labelling and flammability requirements, and articles containing fur or wool have additional labelling requirements.
Certification
All meat and meat products must be certified to show that they have been processed at approved locations inspected by US customs.
Import permits and licences are required for milk and dairy products.
Therefore, the foreign exporter should make sure that the United States importer has been provided with proper information so the importer can:
- Submit the necessary information concerning packing, labelling, etc., and
- Make arrangements required for entry of the merchandise into the United States.
Packing
You should check the packaging requirements with the importer in the US, as they may have local demands and preferences. Goods should be marked according to US requirements.
Methods of Quoting and Payment when Selling to the USA
An irrevocable letter of credit (L/C) payable at sight is commonly used to settle international transactions. It offers protection to both the exporter and the importer.
So, payment terms must be agreed to in advance. So, whatever payment terms are agreed upon, ensure all parties understand them and that your client, representative or contact signs a mutually agreed document.
Therefore, it is best practice for sellers dealing with new customers to use secured payment terms such as 100% payment before shipping, letters of credit, sight drafts or bills of exchange.
Selling to the USA – Documentary & Clearance Requirements
Documentation required:
The following documents are generally required for the importation of goods into the United States:
- Commercial Invoice
- Certificate of Origin, bill of lading, packaging list and special certificates
- Airway Bill or bill of lading
- Packing List
- Any special certifications required by US authorities
Customs Process:
It is considered the best practice to use the services of a licensed customs broker to complete the customs clearance transaction in the USA
So, Exporters to the US can find information about the Import requirements of the USA on the US Customs and Border Protection website.
Selling to the USA – Business Risks
Organisations wishing to operate in the US should commit to the highest level of corporate behaviour and familiarise themselves with the laws of the country and the penalties for bribery of foreign officials. So, they should have suitable insurance cover which adequately protects the company, its directors and its officials.
Intellectual Property Protection
The United States Patent and Trademark Office (USPTO), offers companies and individuals a high standard of Intellectual Property (IP) protection. It has comprehensive IP laws and has vigorous enforcement in the event of an infringement.
Before businesses enter the US marketplace, they should conduct an IP audit and also seek legal advice on how best to protect their IP rights in the US. If you require legal advice, so please contact me, and I will be delighted to provide you with the name of a reputable legal advisor.
Dispute Resolution
The US has a highly developed legal system. Therefore, Lawyers are commonly used to address issues or concerns. So hiring a local legal representative is standard practice and best advice.
So, Selling to the USA – Web Resources
American National Standards Institute
SelectUSA
US Census Bureau
The US Consumer Products Safety Commission
US Commercial Service
The US Federal Government Information Centre
US Harmonised Tariff Schedule (US International Trade Commission)
The US Food and Drug Administration
US Customs and Border Protection
The US Small Business Administration
So. Selling to the USA – About the Author
Aidan Conaty is the founder of TCI China and Goodada.com. Aidan has spent over 15 years assisting companies to trade internationally. TCI China provides trade support services for China. Goodada helps companies to trade internationally.
So, for more information, contact:
Contact Person: Aidan Conaty
Mobile- Messenger (Click to Connect)
Laptop / PC (Click to Connect)
Phone:(Europe/ Rest of the World) +353 1 885 3919 ; (UK) +44.020.3287.2990 ; (North America) +1.518.290.6604