- Factbox: Tariffs in place or planned for nearly all goods traded by U.S. and China
- SEPT. 1 TARIFFS
- DEC. 15 TARIFFS
- OCT. 15 TARIFF INCREASE
- CHINESE RETALIATION
- U.S. TARIFF EXCLUSIONS
- Trump’s China Tariffs – The List of Products Affected and What You Can Do
- The List of Products Affected By Trump’s Tariffs
- List 4 (Spring/Summer 2019)
- Are You Affected by These Tariffs?
- What You Can & Cannot Do About These Tariffs
- Predictions for the Future
Factbox: Tariffs in place or planned for nearly all goods traded by U.S. and China
By Reuters Staff
(Reuters) – U.S. and Chinese trade negotiators are meeting in Washington this week to find ways to defuse a trade war that has roiled markets and triggered tit-for-tat tariffs on hundreds of billions of goods traded between the world’s largest economies.
Last week, both sides offered goodwill gestures aimed at laying the groundwork for productive talks. U.S. President Donald Trump delayed a planned hike on tariffs on some Chinese goods by two weeks until Oct. 15, while China postponed tariffs on U.S. cancer drugs, lubricants and animal feed ingredients.
If fully imposed, U.S. tariffs already implemented and proposed will cover virtually all Chinese imports – worth about $550 billion – by Dec. 15. China has imposed or planned tariffs on all but 10% of its yearly U.S. imports of around $120 billion.
Here is a look at U.S. and Chinese tariffs recently put in place and those scheduled to take effect over the next several months.
SEPT. 1 TARIFFS
The U.S. tariffs targeted some $300 billion in goods imported from China, with a 15% tariff taking effect in two phases, on Sept. 1 and Dec. 15.
The initial list of goods includes mostly consumer products, a Reuters analysis of 2018 U.S. Census Bureau data. It includes flat panel television sets, flash memory devices, power tools, cotton sweaters, bed linens, multifunction printers and many types of footwear.
The largest category of targeted products covers smart watches, smart speakers, Bluetooth headphones and other internet-connected devices that were spared from a prior round of tariffs, with Chinese imports estimated at $17.9 billion annually by the Consumer Technology Association.
DEC. 15 TARIFFS
The second round of the 15% U.S. tariffs is scheduled for Dec. 15. It targets Chinese goods not previously hit by U.S. duties and will hit the consumer technology sector hard, including cellphones, laptop and tablet computers — categories that made up a combined $80 billion in Chinese imports last year.
About $12 billion worth of Chinese toy imports also would be affected. Trump has said he delayed tariffs on such products because he wanted to avoid hurting Christmas season sales for Apple Inc AAPL.O and other companies and retailers.
The list covers about $156 billion worth of total 2018 imports from China, U.S. Census Bureau data, and includes a wide range of other consumer goods, from plastic tableware and light-emitting diode lamps to clothing.
OCT. 15 TARIFF INCREASE
The Trump administration is accepting public comments through Friday on a proposed Oct. 15 tariff rate increase to 30%, from the 25% duty already in place on at least $250 billion worth of Chinese imports.
The higher tariff had been due to take effect on Oct. 1, but Trump last week announced it would be delayed “as a gesture of good will.” Oct. 1 is the 70th anniversary of the People’s Republic of China.
The 25% tariffs were implemented over a nearly year-long period, starting with an initial tranche of largely non-consumer goods in July and August 2018, including machinery and electronic components such as semiconductors and printed circuit boards and many chemicals. A later $200 billion list added consumer goods and building products, including furniture, vacuum cleaners, lighting fixtures, handbags and vinyl flooring.
After Trump in early August announced he was moving ahead with tariffs on virtually all remaining Chinese imports, Beijing said it would impose additional 5% or 10% tariffs on a total of 5,078 product categories from the United States, representing worth about $75 billion annually.
The first stage of the Chinese tariffs also took effect on Sept. 1, with a second tranche to follow on Dec. 15. This list targeted U.S. crude oil for the first time with a 5% tariff, while the tariff on U.S. soybeans jumped to 30% from 25%. U.S. beef and pork also saw their tariffs increased by 10%.
Last week, Beijing announced it would exclude some agricultural products, including soybeans and pork, from the additional tariffs.
Beijing also will reinstate a 25% tariff on U.S.-made vehicles and a 5% tariff on auto parts that it had suspended in December at a time when U.S.-China trade negotiations were gaining momentum.
China already has tariffs in place on about $110 billion worth of U.S. products, ranging from 5% to 25%, including soybeans, beef, pork seafood, vegetables, liquefied natural gas, whiskey and ethanol. 2018 imports, there are only about $10 billion worth of U.S. imports untouched, with the largest category consisting of large commercial aircraft built by Boeing Co BA.N.
U.S. TARIFF EXCLUSIONS
The Trump administration has previously excluded some Chinese-made household furniture including cribs and other baby safety products and bibles and other religious texts from the Sept. 1 and Dec. 15 rounds of tariffs.
Some of the products, including internet modems and routers, were removed because they had already been hit with 25% tariffs previously, while others were taken out for safety or religious reasons. Chinese-made rosaries and religious medals, however, were still be hit with 15% tariffs on Sept. 1.
On Thursday, the office of the U.S. Trade Representative said it would exclude dozens of products from the tariffs, including dog collars, some printed circuit boards used in computers, certain auto parts and Christmas tree lights.
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Trump’s China Tariffs – The List of Products Affected and What You Can Do
Update January 15, 2020: China and the United States officially signed Phase 1 of the trade deal. All existing duties will remain in place except for $120billion of goods with 15% duties which will be rolled back to 7.5% (largely from Tranche 4A). View the full trade deal here.
Update October 11, 2019: The White House announced a “Phase 1” deal has been reached; duties will not rise to 30% on October 15 as they were expected to.
Updated August 23, 2019: Duties from List 1, 2, & 3 will increase from 25% to 30% on October 1, 2019. Duties from List 4 will increase from 10% to 15%. Duties from List 4 will be implemented either on September 1, 2019 for some products or December 15, 2019 for others.
Updated August 1, 2019: The Trump Administration announced a 10% additional duty on the remaining $300 bill of goods not currently subject to additional duties (List 4/Tranche 4).
Updated May 5, 2019: The Trump Administration announced that all products on Tranche 3 (“List 3”) would have tariffs raised from 10% to 25% on May 10, 2019. It was also announced that the remaining goods worth over $300 billion that are not currently subject to additional tariffs would also “quickly” be subjected to 25% tariffs.
Updated November 30, 2018: The Trump Administration has agreed to freeze the tariffs increase scheduled for January 1, 2019, for 90 days. Without an agreement reached in this time, tariffs will increase to 25% on April 1, 2019.
Updated September 17, 2018: The Trump Administration has set the implementation date of the latest round of 10% tariffs to September 24, increasing to 25% on January 1, 2019.
A very good percentage of people who read this blog are importers from China who are selling in America.
Starting August 23, 2018, the Trump Administration put additional tariffs on $16 billion worth of products. It escalated to the point that on May 10, 2019, nearly half of all goods that America imports from China were subject to an additional 25% tariffs. On August 1, 2019 the Trump Administration imposed 10% duties on all remaining products not currently subject to additional duties.
Related Podcast: Episode 257 – How to Deal with the Tariffs for Your Ecommerce Business
The List of Products Affected By Trump’s Tariffs
Trump’s list of items to be tariffed has come in four stages. The first two affected roughly $50 billion of the United States’ $500 billion worth of imports from China. The third list, which went into effect on September 24, 2018, affects $200 billion worth of goods. List 4, not yet in place, will encompass all products not currently hit by List 1, List 2, or List 3.
The first two lists have 25% tariffs. The third list started at 10% and escalated to 25% on May 10, 2019. This is in addition to any existing duties your product may have.
So for example, if your product has an existing 8% duty, the new rate would be 8% + 25% = 33%.
On August 23, 2019 it was announced that duties on all three of these lists would increase from 25% to 30% on October 1, 2019.
Below is a complete list of all the products affected by Trump’s tariffs. These are lists of HS Codes. If you are an importer and do not keep accurate records of your HS codes, now is the time to review your previous customs forms and figure out what these codes are for your products.
|List 1 – July 6, 2018 – $34 Billion (25%);||List 2 – Aug. 23, 2018 – $16 Billion (25%);||List 3 – Sept. 24, 2018 – , $200 Billion (10%). Increased to 25% on May 10, 2019;||List 4A/4B – All remaining goods (15%). List 4A starts Sept. 1, 2019; List 4B starts Dec. 15, 2019.|
|Download the list of Affected Items for Round 1, July 6, 2018 (PDF)||Download the list of Affected Items for Round 2, August 23, 2018 (PDF)||Download the list of Affected Items for Round 3, September 24, 2018 (PDF)||Download List 4A|
Download List 4B
|Does not include products approved by congress for exclusion listed here.|
Approximately 1000 products have been excluded from the list of affected products. To view an updated list of exclusions, view the United States Trade Representative website here.
List 4 (Spring/Summer 2019)
Along with Lists 1-3, the Trump Administration released its final proposal for List 4, for implementing tariffs on the remaining $300 billion worth of goods currently not subject to additional duties. On August 1, 2019 the Trump Administration announced these remaining goods would be subject to an additional 10% tariff starting on September 1, 2019.
This final tranche will be reviewed until June 17, 2019. Previously for List 3, one month after the review period the additional tariffs were put in place. It’s reasonable to assume that List 4 will be implemented some time near the middle of July 2019 if no trade deal is reached.
Are You Affected by These Tariffs?
The first two lists largely targeted non-consumer products such as industrial products, medical products, transportation products, etc. In other words, there is a very good chance that the average Amazon seller was not affected by List 1 or List 2 of increased tariffs.
The first two lists mostly included non-consumer products such as industrial products.
However, nearly every seller has ultimately been impacted as nearly every product imported from China is facing some type of additional duty (unless it is an excluded product).
Want to see how much your competitors are importing from China?
Custom import records are public information in the United States and there are multiple tools that allow you to simply search for a company name and see exactly how much these companies are importing from China.
Research tools which lean on public U.S. customs records can be extremely valuable for finding and verifying Suppliers.
My favorite tool for this is Jungle Scout’s Supplier Database tool which costs less than $50 a month (other more expensive options include Import Genius and Panjiva). These tools will neatly summarize all of the information included on a particular company’s Bill of Lading information such as product type, quantity, and supplier name/address.
What You Can & Cannot Do About These Tariffs
There are some things that you can do to minimize the impact of any additional tariffs:
- Review your products’ HS codes immediately and determine if they are affected by List 1, List 2, or List 3
- Use the daily $800 de minimis threshold to your advantage
- Diligently plan how much stock you hold considering that tariffs may be removed on very short notice if a trade deal is reached
- Raise prices
Check if your products’ HS codes are included in list 3.
What you shouldn’t do:
- Deliberately misclassify your goods to avoid lower duties
- Ship goods through an intermediary country Canada (duties are Country of Origin, not the last transit point)
The most important thing you can do is to determine if you will have any products impacted by the new duties and determine if your pricing should be raised to reflect the new tariffs.
Additionally, the United States does allow up to $800/day of goods to be imported without paying any duty which you can use to your advantage. Finally, plan your inventory diligently. Ordering 12 months worth of inventory is probably not a great idea given the fluidness of things and the fact a trade deal could be reached at any time.
Deliberately misclassifying your goods could result in a massive fine should Customs decide to inspect your shipment.
What you should not do is look at deliberately misclassifying your items to avoid duties. What many people do not realize is that your shipments are not fully ‘liquidated’ until 12 months after clearance into the United States.
This means that your shipments can be reviewed for up to 12 months after clearance to assess whether they have had the correct HS Code applied (you know that bond you pay for when importing goods into the United States? This is to pay for your duties in the event you are re-assessed and can’t afford to pay up).
You can be sure post-clearance audits of shipments will increase significantly in the future.
Additionally, first importing your goods into another country Canada will not avoid the tariffs as duties are the original country of origin.
Predictions for the Future
As polarizing as Donald Trump is, “getting tough” on China is one issue he has relatively bipartisan support on.
As Elizabeth Economy (a well respected China commentator) from China File said “The trade war signifies far more than President Trump’s desire to rebalance the bilateral trade deficit.
It represents the culmination of decades of pent-up frustration within the United States over China’s failure to make good on the promise of its 2001 WTO”.
The arrest of Huawei CFO Meng Wanzhou was symbolic of the longstanding disagreements between China and the United States.
While the current impasse will ly be resolved, it’s ly that strong resentment and disagreements on both sides of the Pacific will remain.
Many have raised the possibility that even if the tariffs are removed in the short term, they may be reinstated at a later date.
As China expert Michael Hirson said, “[Any] deal’s implementation is ly to be rocky, with a real risk that the U.S. will reimpose tariffs in the next one-two years.”
Importers find the announcement of a new round of duties extremely annoying, at the very least. We, the importers, are paying the costs in the short term and will be loathed to increase prices. But this burden will be passed on to the end-user. Prices will rise and consumers will be the real ones paying the cost in the long run.
The good news is, most trade disputes, this is one will ly be resolved eventually. But hopefully, a lasting resolution is reached sooner rather than later.