Tariff Update - China Tariffs Remain in Effect
While delays have been granted for tariffs on Canada and Mexico, the tariffs on Chinese goods are still in effect. NCBFAA Legislative Advisor, Nicole Bivens Collinson of Sandler, Travis & Rosenberg, P.A., offers the following analysis regarding the ongoing tariffs on China and their impact on trade
The 10% tariffs will continue to apply to “products of China and Hong Kong,” and they will be entered using HTSUS 9903.01.20. This includes goods from Hong Kong as well, with the definition of “products of China” now extending to products from Hong Kong. The standard for determining the origin of goods remains substantial transformation.
These 10% tariffs will be in addition to the normal tariff rate, section 301 additional duties, and any applicable antidumping/countervailing duty (ADD/CVD) assessments. For example, if a good is subject to a 7.5% section 301 duty and 100% ADD, the combined duty would now total 125.5%.
Impact on Goods with Exclusions or Duty Suspensions
It’s important to note that goods that may have qualified for exclusions from Section 301 tariffs or duty suspension/reductions under the Miscellaneous Trade Bill (MTB) will still be subject to the new 10% tariffs.
New Section 321 Restrictions for China/Hong Kong Goods
Under Section 321, de minimis (under $800) goods are restricted. All “products of China and Hong Kong” are prohibited from entering the U.S. under the de minimis threshold, meaning these goods must enter formally or informally. Additionally, goods that enter the U.S. through international mail will require a formal entry. No drawback will be allowed for the new tariffs, though duty drawbacks remain available for other eligible duties paid.
Exemptions from the Additional 10% Tariff
The following products are excluded from the 10% tariff:
- Goods for personal use
- Goods entered under Chapter 98 HTSUS, such as repairs/alterations and assembly of U.S. components
- Donations of food, clothing, and medicine for humanitarian purposes
- Merely informational materials
Transit Goods Exemption
Goods loaded on a vessel or in transit before 12:01 a.m. ET on February 1, 2025, will be exempt from the 10% tariff until 12:01 a.m. ET on March 7, 2025. After this date, such goods will be subject to the new tariffs.
Foreign Trade Zone (FTZ) Goods
Products of China and Hong Kong admitted to an FTZ after 12:01 ET on February 4 must be admitted under privileged foreign status. Upon entry into the U.S., these goods will be subject to the applicable tariffs, including the 10% duty.
Source: NCBFAA