As of the latest update, additional duties have been imposed by the United States government on all products imported from China/Hong Kong. While Canada and Mexico imports were initially set to be faced with additional tariffs, the sanctions on both Canada and Mexico have been put on hold for at least one month, with a new potential effective date of March 1st. However, the additional tariffs for China are now active, and based on the preliminary notice in the Federal Register, which can be found at this link – Federal Register Notice, we can provide the following details at this time:
Imports From China
- 10% tariffs on products of China and Hong Kong
- The definition of “products of China” now includes products of Hong Kong
- This 10% is on top of the normal tariff rate, plus any existing Section 301 duties, plus any antidumping/countervailing duties (ADD/CVD) if they apply
- For example, a product with a chapter tariff rate of 5.8% that is subject to 25% Section 301 duties and 90% ADD/CVD would now be assessed 130.8% duties (5.8+25+90+10)
- Goods that have an exemption to the Section 301 tariffs currently will still pay this 10% tariff
- The additional tariffs will apply to ALL products of China and Hong Kong with the exception of the following:
- Goods for personal use.
- Donations of food, clothing and medication intended to relieve human suffering
- Informational materials
- For goods entered under Chapter 98:
- 9802.00.40 or 9802.00.50 (repairs/alterations) – will pay duty on the value of the repairs/alterations added in China and/or Hong Kong
- 9802.00.80 (assembly of US components) – will pay duty on the assembly in China and/or Hong Kong
- Chapter 9801 goods that were exported from the US and are subsequently being returned from China and/or Hong Kong are not subject to the additional duties
- De minimis entries are prohibited for entries with country of origin China and Hong Kong
- Entries with country of origin China and/or Hong are not eligible for duty drawback on duties paid
- Any products entered into a US Foreign Trade Zone (FTZ) must be admitted as a privileged foreign status, and the duties related to the classification at the time of entry into the zone will be applied upon withdrawal for consumption from the zone.
The additional tariffs will apply as of today, Tuesday, February 4th at 12:01a.m. EST, with the following guidelines:
- If the cargo was loaded onboard the vessel after 12:01 a.m. EST on Feb. 1, the additional duties will apply.
- If the cargo was loaded onboard the vessel prior to Feb. 1 at 12:01 a.m. EST AND entry for consumption or withdrawal for consumption is made on or after 12:01 a.m. EST on February 4but before 12:01 a.m. EST on March 7, the additional duties will not apply.*
- If the cargo was loaded onboard the vessel prior to Feb. 1 at 12:01 a.m. EST but entry for consumption or withdrawal for consumption is made on or after 12:01 a.m. EST March 7, the additional duties will apply.
*If asserting that the goods were loaded on board before 2/1 and entry made between 2/4 and 3/7, this must be “certified” by inserting tariff 9903.01.23 before the Chapter tariff.
For entries that do not fall within that exemption timeframe, the additional 10% should be applied by inserting tariff 9903.01.20 before the Chapter tariff.
With industry guidance suggesting that we should not anticipate any slowdown on these types of orders, we want to remind you that now is an excellent time to review your bond activity to better manage your bond saturation levels. Bond saturation happens when the value of the duties imported exceeds the amount covered by the bond. This can lead to delays, additional costs, and formal demands from US Customs to increase your bond amount. By conducting a review of your customs bond activity, you can identify any trends or patterns that may indicate nearing bond saturation and take preemptive measures to increase your bond coverage accordingly. This proactive approach helps to prevent disruptions in your import operations is key to successful importation practices.
It is imperative for organizations to stay informed on these developments and adapt their strategies accordingly in order to navigate this challenging economic climate effectively. If you haven’t already done so, please sign up for our email subscription to get updates and news delivered straight to your inbox! Subscribe here.
We would be happy to answer any questions you have. Please don’t hesitate to reach out!
