Over the weekend (December 1, 2018), President Trump agreed with China President, Xi Jinping, that the scheduled increase from 10% to 25% of Section 301 Tariffs, will not go into effect on January 1, 2019 as planned. There is a 90 day period during which negotiations will be conducted and if not completed to the U.S. satisfaction, the 25% increase will be completed at that time.
During this 90 day period, the U.S. and China will begin negotiations on forced technology transfer, intellectual property rights, and non-tariff trade barriers. Finally, China has also agreed to immediately start purchasing agricultural, energy, and industrial goods from the U.S.
This is good news for U.S. importers and exporters. Importers get a 90 days extra of only 10% additional duties and exporters should get market access back in China. Stay tuned for further updates as they develop.
- Routing Chinese goods through a different country (such as Canada) and then changing the country of origin on the U.S. import documents and/or the product themselves
- Changing the goods’ HS classification to something that is not subject to 301 tariffs
- Declaring a lower value so a lower duty is applied
What can you do about this?
Do not take advice from suppliers who suggest ways to avoid duties – in spite of any convincing-seeming pitch. Always check with your broker and/or a customs attorney if you’re not sure.
2. Use one invoice.
Watch for goods from China being routed through a different country. This is fine, but it is not permissible to change the country of origin on the customs documents as a result.
Question your suppliers if a product you have been receiving from China suddenly shows as coming from a different country. In fact, question anything that seems fishy or just too good to be true.
As the importer, it is your prerogative to import goods from your preferred source. In some cases, it will make sense to source from a country that will not result in heavy tariffs.