china tarriffs on lcd monitors sold to china made in china

Prices for big-screen televisions and some household appliances could go up significantly if the Trump administration"s proposed tariffs on Chinese imports are enacted.

"On a $4,000 TV ... the tariffs might have a several-hundred-dollar price impact," said David French, senior vice president for government relations at the National Retail Federation, an advocacy group.

"We"re still assessing the list," French said. "There is machinery involved in consumer goods. ... There are chemicals listed that we believe are components of cosmetics and toiletries."

The Office of the U.S. Trade Representative proposed late Tuesday an additional 25 percent tariff on an extensive list of Chinese imports, valued at $50 billion for the year and ranging from aircraft parts to vaccines. A public hearing on the list is scheduled for May 15, and filing requests to appear and comment are due April 23.

"Some goods won"t be imported at all with a 25 percent tariff, but prices of domestic goods will go up the full amount of the tariff," said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington.

But he and other analysts pointed out that for a U.S. economy roughly $18 trillion in size, 25 percent tariffs on $50 billion of Chinese imports will have a relatively small effect overall on consumer prices.

Chinese manufacturer Haier, which acquired GE Appliances in 2016, "only imports a very small number of niche dishwashers designed for small spaces," spokesperson Kim Freeman said in an email to CNBC. "We make about 95 percent of our dishwashers in the U.S. in Louisville, Kentucky."

The National Retail Federation estimates that access to imported goods through free trade agreements boosts the purchasing power of the average American family by $18,000 a year.

"It"s going to be very difficult for the retailer to manage their supply chain in order to handle these tariffs," French said. "Consumers may be price sensitive enough that they may slow their holiday purchases. These may be "Grinch" tariffs."

Approximately 90 percent of all LCD modules are manufactured in mainland China. The remaining 10 percent are manufactured primarily between Japan and Taiwan, and some in Korea. China’s clear stronghold in manufacturing, coupled with its large volume of imports to the U.S., mean these tariffs will definitely impact the industry.

The US government said the tariffs where created in response to China’s Unfair Trade Practices. Specifically, the Section 301 investigation by the USTR revealed:

China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.

China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.

China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.

Unfortunately, while the USTR works to rectify inequities in these unfair practices, many American manufacturers will have to pay higher prices for their components. That works its way up the supply chain and can ultimately lead to higher prices for American consumers.

The USITC (Office of Tariff Affairs and Trade Agreements) is responsible for publishing the Harmonized Tariff Schedule of the United States Annotated (HTSA). The HTSA provides the applicable tariff rates and statistical categories for all merchandise imported into the United States; it is based on the international Harmonized System, the global system of nomenclature that is used to describe most world trade in goods. Although the USITC publishes and maintains the HTSA in its various forms, Customs and Border Protection is the only agency that can provide legally binding advice or rulings on classification of imports.

Many people are asking about using alternate HTC codes with lower burden implications. Unfortunately, these codes are abundant and complicated. There should be exactly one code that properly categorizes your product.

When a display is designed and built for a single application, it may be more appropriate to use a harmonized tariff code for the end-product instead of the display component. An LCD in a cellphone is a good example of this.

A popular way to do this is to reevaluate your current HTC codes and make sure they’re correct. This can be done with in-house council or the use of a consultant specializing in this area of the government. Ultimately, however, you need get a ruling from the government to be certain you are using the correct code.

Finding a tariff code by perusing the USTR HTC tariff code list can be overwhelming and risky. If the code is chosen incorrectly, it can lead to fines and penalties from the USTR.

Some companies are searching for key suppliers outside of the China region and working towards qualifications of those factories. Others are exploring having key components of the purchased assembly outsourced outside of China so it still satisfies the correct definition of Country of Origin. Again, violating these definitions can lead to costly fines and penalties.

TAIPEI (Reuters) - Taiwan’s Foxconn is exploring the sale of its new $8.8 billion display panel factory in China, people familiar with the matter told Reuters, as demand for the product wanes amid an intensifying U.S.-China trade war.FILE PHOTO: A motorcyclist rides past the logo of Foxconn, the trading name of Hon Hai Precision Industry, in Taipei, Taiwan March 30, 2018. REUTERS/Tyrone Siu/File Photo

Foxconn, formally known as Hon Hai Precision Industry, is in talks to appoint banks to find a buyer for its liquid crystal display (LCD) factory that is being built in the southern Chinese city of Guangzhou, said two people with direct knowledge of the matter.

A sale would come at a delicate time for Foxconn, which has extensive investments in China, a large roster of U.S. clients that includes Apple Inc, and is having to navigate a tricky path amid the protracted trade war between Washington and Beijing. It would mark one of its largest divestments from China.

Foxconn’s discussions are at an initial stage and it has not yet come up with a price tag for the so-called Gen-10.5 facility specializing in large-screen LCDs, the sources said, adding a sale was not a surety.

Foxconn, in a written statement to Reuters, said: “As a matter of company policy, Foxconn does not respond to market rumors or speculation.” The sources requested anonymity because the deliberations are confidential.

U.S. President Donald Trump sharply raised the stakes in the bruising trade war with China and jolted global financial markets by vowing on Thursday to impose a 10% tariff on $300 billion of Chinese imports from September 1.

The trade war has disrupted technology global supply chains in a major way, forcing Foxconn to review its own. That and slowing demand for large-screen televisions and monitors had prompted Foxconn’s management to seek a buyer for the LCD plant, one of the sources familiar with the management’s thinking said.

Questions were also being raised within Foxconn on the need for the Guangzhou project. “Existing plants are already not running at full capacity ... why need another one?,” the source said.

The second source said the new factory would not go into production until early October, which makes it less appealing for buyers because of the additional risks as compared to an already operating plant.

The Nikkei daily reported earlier this year that the company would delay most of its planned production in Guangzhou for a minimum of six months, but Foxconn said the project was on schedule.

Dubbed the largest single investment ever in the southern city by Chinese media, Foxconn announced the Guangzhou plant in 2016, hoping to start operations by 2019 to meet an expected rise in demand for large-screen TVs and monitors in Asia in a challenge to top Chinese display maker BOE Technology Group.

The project was mainly run by a joint venture between the Guangzhou government and Japan’s Sakai Display Products, an advanced panel factory owned by Foxconn founder Terry Gou and Japan’s Sharp Corp, Foxconn’s display unit.

The Japanese panel maker said on Thursday it would build a plant in Vietnam to make flat screens and electronic devices to guard against additional U.S. import tariffs on Chinese goods.

The global display industry has been struggling with a supply glut and tumbling earnings due to moribund sales of televisions and smartphones, and the worsening trade dispute that could raise product prices and dampen consumer demand.

Taipei-based Foxconn said in April that it remained committed to building a display plant and tech research facilities in Wisconsin amid growing skepticism about the fate of the $10 billion project. Trump had cited Foxconn’s Wisconsin plans as proof he was reviving American manufacturing.

President Donald Trump and his administration’s proposed expansion of tariffs of 25 percent onto roughly $300 billion worth of imports from China has caused the tech industry to respond. The latest round of tariffs may include a number of tech items, including laptops, tablets, headphones, keyboards, solid state drives and more. Now a deal has been made, though, which could delay some tariffs indefinitely.

Several technology companies, vendors and retailers made their thoughts known in public comments to the Office of the United States Trade Representative (USTR). That was during a period of public hearings that took place from June 17 through June 25. But the tariffs have been delayed several times. The USTR announced in August that some of the the tariffs, including many on tech which were planned for September, had previously been delayed until December 15.

Trump announced new tariffs on Twitter, but at 10 percent, on the new goods. This was after he briefly suspended the tariffs after beginning new talks with Chinese leader Xi Jinping. After China threatened to retaliate, Trump bumped current tariffs from 25% to 30% and upcoming tariffs in December from 10 to 15%.

In a statement on August 13, the USTR said that for "certain articles" will see delays until Dec. 15, including "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing."

But on December 13, the Wall Street Journal reported that the two sides were coming to a limited trade deal. That calls for China to purchase $50 billion worth of agricultural goods in 2020, as well as "energy and other goods." In return, the U.S. may reduce rates on existing imports and cancel the tariffs that were meant to go into place on Dec. 15, which include many tech products.

The tariffs are wide-ranging and affect many industries, including technology, agriculture, clothing and metals. There are hundreds of product categories listed on the website for the Harmonized Tariff System (HTS) of the United States. You can read the full list of the latest round of tariffs here.

8471.30.01Portable automatic data processing machines, not over 10 kg, consisting at least a central processing unit, keyboard and display.Laptops, tablets

8517.62.0090Machines for the reception, conversion and transmission or regeneration of voice, images or other data, nesoi.Routers, NAS devices, smart speakers, smartwatches

8517.70.00Parts of telephone sets; parts of other apparatus for the transmission or reception of voice, images or other data, including apparatus for.Repair parts, especially for smartphones

8528.52.00Other monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.Flat-panel monitors

8528.72.64Color television reception apparatus w/flat panel screen, video display diagonal over 34.29 cm, incorporating a VCR or player.Flat-panel televisions

Other technologies, including discs, batteries, cameras and projectors also appear on the list in various forms. And, CPU fans, processors (8542.30.01) are also scheduled.

In August, China threatened to place tariffs on $75 billion in U.S. goods in Trump follows through on his threats to China. The plan includes tariffs of 5 or 10% on a American products, including oil, agricultural products, automobiles and more. The tariffs are scheduled to start the same days as the U.S. ones - Sept. 10 and Dec. 15.

Following this, Trump said he would raise tariffs on $250 billion of goods to 30% from 25%. New tariffs on $300 billion worth of goods in and December will move from 10% to 15%.

On October 11, the U.S. and China struck a "phase one deal" that eliminates October tariffs. December tariffs, which may affect consumer electronics, are still under discussion.

But a "Phase One" trade deal in December put an indefinite delay on some of those tariffs. Per Reuters, tariffs on laptops and cellphones won"t go into place. The Entertainment Software Association told Polygon that the tariffs also won"t affect video game consoles.

A number of tech companies have commented on the tariffs publicly, and they all have expressed a wish for, unsurprisingly, categories affecting their businesses to be removed from the list.

Two notable joint comments have also been written. The first was one from Intel, HP, Dell and Microsoft regarding laptops while another came from Nintendo of America, Microsoft and Sony Interactive Entertainment about the effects on video game consoles.

All of the comments have some commonalities. Many mention the costs of moving existing supply chains out of China to either the United States or other countries in Asia. Additionally, they point out that companies that do not serve the United States as a primary customer base could gain a competitive advantage, as well as brands outside of the United States. (Fitbit, for example, suggested Xiaomi and Huawei would be strengthened as it was affected.)

The Consumer Technology Association, a group representing technology companies, commissioned a study suggesting that the U.S. price of cell phones would rise 14%, video game consoles and laptops would each increase 19%. The price of drones would jump 15%.

In its own public comment, the Entertainment Software Association, which represents the video game industry, wrote that: “the imposition of a 10% tariff rate could place these products out of reach for many consumers – let alone a 25% tariff, which would have an even greater impact, likely causing consumers to purchase fewer consoles, controllers and accessories. This is because console makers will be unable to absorb the tariffs.

In August of 2017, the USTR began investigating the practices of the Chinese government. The investigation included policies and action regarding intellectual property, technology transfer and more.

The USTR and the office of President Donald Trump have deemed China’s policies as restricting commerce in the United States and “unreasonable or discriminatory.”

Update: Jan 27, 2:32 p.m. ET with news that the U.S. and and China have reached a "Phase 1" trade deal, which delays tariffs on phones, laptops and consoles, among other things.

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WASHINGTON — President Trump on Tuesday unexpectedly put off new tariffs on many Chinese goods, including cellphones, laptop computers and toys, until after the start of the Christmas shopping season, acknowledging the effect that his protracted trade war with Beijing could have on Americans.

Mr. Trump pushed a 10 percent tariff on some imports to Dec. 15, and excluded others from it entirely, while facing mounting pressure from businesses and consumer groups over the harm they say the trade conflict is doing.

The stock market soared after the announcement, following weeks of volatility driven by fears that the standoff between the world’s two largest economies could hamper global economic growth.

The decision was the latest twist in a dispute during which China and the United States have alternately escalated tensions with tit-for-tat tariffs and softened their positions as they sought a deal.

Mr. Trump continued to insist on Tuesday that the trade war was hurting only China. But he also admitted that there was potential for the new tariffs to inflict economic pain closer to home.

“Just in case they might have an impact on people,” the president told reporters, “what we’ve done is we’ve delayed it so that they won’t be relevant for the Christmas shopping season.”

Mr. Trump, frustrated that negotiations had failed to yield an agreement, said on Aug. 1 that the United States would impose the 10 percent tariff on $300 billion worth of Chinese imports on Sept. 1. That would be in addition to a 25 percent tariff already imposed on $250 billion of Chinese goods.

But on Tuesday, the United States trade representative’s office said that while a substantial amount of Chinese imports would be subject to the Sept. 1 levy as planned, various consumer electronics, shoes and other items would be spared until mid-December.

The office also said it was dropping 25 types of products from the tariff list altogether “based on health, safety, national security and other factors.” The items include car seats, shipping containers, cranes, certain fish, and Bibles and other religious literature, a spokesman said.

Stocks rallied immediately on the news, with the S&P 500 climbing nearly 2 percent in morning trading before ending the day up 1.5 percent. The benchmark index was lifted partly by shares in retailers and computer chip producers that have been especially sensitive to the trade tensions.

More on ChinaA Messy Pivot:As Beijing casts aside many Covid rules after nationwide protests, it is also playing down the threat of the virus. The move comes with its own risks.

Space Program:Human spaceflight achievements show that China is running a steady space marathon rather than competing in a head-to-head space race with the United States.

A Test for the Economy:China’s economy is entering a delicate period when it will face unique challenges, amid the prospect of rising Covid cases and wary consumers.

New Partnerships:A trip by the Chinese leader Xi Jinping to Saudi Arabia showcased Beijing’s growing ties with several Middle Eastern countries that are longstanding U.S. allies and signaled China’s re-emergence after years of pandemic isolation.

Best Buy, which gets many of the products it sells from China, was among the best-performing stocks in the S&P 500, rising more than 6.5 percent. Apple, whose iPhones and computers would have been subject to the tariffs, climbed more than 4 percent. The technology-heavy Nasdaq composite index ended the day up more than 2 percent.

The tariff announcement followed what Mr. Trump described as a “very productive” call involving Liu He, China’s vice premier and its lead trade negotiator; Robert Lighthizer, the United States trade representative; and Steven Mnuchin, the Treasury secretary.

The three agreed to speak again in two weeks, China’s state-run Xinhua News Agency reported. Negotiators had planned to meet again early next month in Washington.

Now, about $112 billion of Chinese goods will be hit with the 10 percent levy on Sept. 1, according to Chad Bown, a senior fellow at the Peterson Institute for International Economics. Another $160 billion in goods will be subject to the tariff as of Dec 15, he estimated.

Mr. Trump has been pressing Beijing since last year for an agreement that would, among other things, strengthen protections for American intellectual property, open Chinese markets to American business and result in China’s buying large quantities of American energy and agricultural goods.

But negotiators have made little progress since May. The stumbling blocks included whether the White House would roll back the tariffs already in place and whether Beijing would enshrine in law the changes it pledged to make.

As his re-election campaign gears up, Mr. Trump is increasingly focused on ending the conflict in order to maintain his support among farmers, who have lost some of their main export opportunities as China ordered state-owned companies to stop buying American soybeans. But he has also expressed an unwillingness to accept a deal with China that falls short of his goals.

[Mr. Trump said his tariffs and tax cuts would set off a wave of investment, but data show they havenot caused a significant returnof factory activity from overseas.]

The president has tried to persuade China to buy large amounts of American farm goods before an agreement is reached, but that hasn’t happened. He continued to berate China on Tuesday for not making such purchases and suggested that the tariffs might force it to do so.

“As usual, China said they were going to be buying ‘big’ from our great American Farmers,” he wrote on Twitter. “So far they have not done what they said. Maybe this will be different!”

Chinese officials and state media outlets have responded to Mr. Trump’s prodding by taking an increasingly strident tone and threatening to punish American firms.

China has also allowed the value of its currency to fluctuate in recent weeks, raising the specter that it would use it as a weapon. That prompted the White House to label China a currency manipulator, the first time the United States had done that since 1994.

The tariff delay could create an opening for Chinese officials to soften their statements. There is also the question of whether the Trump administration will allow American companies to continue supplying certain goods to the Chinese telecommunications giant Huawei despite a ban on such trade because of national security concerns.

A so-called temporary general license that allows American companies to supply Huawei despite the ban is set to expire on Monday, but the Trump administration could renew it.

Trade groups said they welcomed the reprieve on tariffs for the holiday season, but added that the changes would not reduce the uncertainty they faced.

“The hope is that this creates an opportunity for the two sides to get back to the table, resume the broad-based trade talks and look at some confidence-building measures that would boost the prospects of a big deal down the road,” said Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce.

Matt Priest, the president of the Footwear Distributors and Retailers of America, said the delay was also an acknowledgment by the Trump administration that Americans were bearing the cost of the trade war.

“It is no coincidence that the administration is allowing certain shoes to come in without raising taxes in hopes that prices do not rise at retail during the holidays,” Mr. Priest said. “While we are pleased with the decision to delay new tariffs on certain shoes, we are not satisfied.”

Among corporate leaders, Timothy D. Cook, Apple’s chief executive, has been particularly active in lobbying the president and Mr. Lighthizer against the tariffs. Apple, which builds most of its products in China, has been hit by the tariffs on some smaller products like the Mac Mini, computer parts and cables. But the latest round of proposed levies significantly raised the stakes for the company.

So far, Apple has not raised prices because of the initial tariffs. And the company would probably try to absorb a 10 percent levy on iPhones at first, too, Daniel Ives, a technology analyst for Wedbush Securities, said in a research note Tuesday.

But if the tariffs continue into next year, he said, “Apple will have no choice but to pass this incremental $75 to $100 per smartphone to U.S. consumers.”

Mr. Trump’s tariffs have been front and center for corporate executives and investors since the trade war flared anew in May, and the topic had often been cited on earnings calls between company leaders and shareholders.

With the most onerous levies — those set for Sept. 1 — not yet in place, retail executives have mostly played down their impact on profits, at least publicly. The biggest retailers, including Best Buy, Macy’s, Target and Walmart, are scheduled to report earnings for the most recent quarter starting this week.

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A Commercial Aircraft Corp. of China Ltd. C919 aircraft stands under assembly in Shanghai in 2017. Proposed U.S. tariffs take special aim at the "Made in China 2025" plan, which supports development of advanced technologies in fields such as artificial intelligence, robotics, biopharmaceuticals, new energy vehicles and aviation.

A Commercial Aircraft Corp. of China Ltd. C919 aircraft stands under assembly in Shanghai in 2017. Proposed U.S. tariffs take special aim at the "Made in China 2025" plan, which supports development of advanced technologies in fields such as artificial intelligence, robotics, biopharmaceuticals, new energy vehicles and aviation.

After three rounds of tariffs and counter-tariffs, both actual and proposed, the U.S. and China appear deadlocked, with the possibility of a trade war still looming. China remains defiant in the face of U.S. threats, while the U.S. appears indifferent following China"s pledges to open its markets.

"China will not enter into any negotiations while under threats from the U.S.," Chinese Commerce Ministry spokesman Gao Feng told journalists last Thursday. He added that the U.S. has not shown any sincerity about holding talks.

Chinese President Xi Jinping promised in a speech on April 10 to cut auto import taxes, open China"s markets further and improve conditions for foreign companies.

Chinese President Xi Jinping promised in a speech on April 10 to cut auto import taxes, open China"s markets further and improve conditions for foreign companies.

Last Tuesday, Chinese President Xi Jinping pledged to open markets, protect intellectual property and increase imports. The following day, China"s central bank governor pledged to open the country"s financial sector to foreign investment. But China insisted this had nothing to do with ongoing trade frictions with the U.S.

China has been particularly unapologetic about its strategic industrial policy, dubbed "Made in China 2025." Proposed U.S. tariffs take special aim at this policy, which a recent report by the U.S. Trade Representative describes as discriminatory toward U.S. firms and a threat to U.S. trade.

The Made in China plan, announced in 2015, calls for China"s government to funnel billions of dollars into developing and acquiring advanced technologies in fields such as artificial intelligence, robotics, biopharmaceuticals, new energy vehicles and aviation.

The Trump administration sees the policy as another effort to steal U.S. technology and push American firms out of the Chinese market. But, says Douglas Fuller, an expert on China"s technology policies at Zhejiang University in Hangzhou, "You can"t just tell China that, "No, you"re not allowed to continue your technological development.""

Dong Yang, the vice chairman of the China Association of Automobile Manufacturers, and other Chinese business leaders see upgrading industry as a natural part of any country"s economic development. The tariffs look to them like just another U.S. effort to thwart China"s rise.

A college student carries his robot depicting the Chinese mythical Monkey King for a competition at the World Robot Conference last August in Beijing.

A college student carries his robot depicting the Chinese mythical Monkey King for a competition at the World Robot Conference last August in Beijing.

The Made in China plan also calls for Chinese companies to control 70 percent of the domestic market in key sectors by the year 2025. The idea is to help China transition from making labor-intensive, low-profit goods such as toys, apparel and furniture, into more lucrative, capital- and technology-intensive products.

"We will promote China"s industries" progress toward the middle and upper reaches of the global value chain, and foster groups of world-class, advanced manufacturers," Xi told delegates to the 19th National Congress of the ruling Communist Party last November.

Beijing Institute of Technology economist Hu Xingdou says the policy might help some Chinese firms. "Or it might create huge production overcapacity and waste," he warns. "It may also tempt many companies to try to trick the government into giving them subsidies."

Hu cites state media reports (some of which were later refuted by other state media) that most research and development funding in China never makes it to the intended projects, and is instead often wasted on unnecessary meetings and travel. The problem, Hu says, is that China lacks a modern R&D system with effective systems of evaluation and oversight.

Another concern is that government subsidies lure so many firms into certain industries that it creates a glut of products, which China then dumps on international markets and crashes prices, as has been the case with steel and solar panels.

"To the extent that [Made in China 2025] is coercive, to the extent that it is inconsistent in dramatic ways with market-based principles of competition, it fundamentally distorts the world economy," argues Lester Ross, partner-in-charge of the U.S. law firm WilmerHale"s Beijing office.

"Made in China 2025 is transparent, open and non-discriminatory," he said. "Foreign and Chinese companies, public and private-sector companies can all participate."

Wang added that his ministry has reviewed the Made in China plan to ensure its strict compliance with World Trade Organization rules. And, he said, China has no intention to monopolize domestic markets.

Fuller says that U.S. tariffs aimed at Made in China 2025 are not likely to be very effective, partly because China exports very few hi-tech products to the U.S.

Most Chinese tech firms, such as electric car makers, are not yet mature enough to compete in U.S. markets. Others, like telecom giant Huawei, are already effectively barred by the U.S. government on national security grounds.

For now, says Fuller, the focus of Made in China 2025 "is really quite domestic, and that"s going to create a lot of business opportunities for these firms in China."

Instead, Fuller suggests that the U.S. would do better to come up with its own industrial policy and put more money into cutting-edge scientific research.

A couple weeks ago, after trade talks fell apart, President Trump raised tariffs on Chinese imports from 10% to 25%. The tariffs apply to a third of everything — about $250 billion worth of products per year — that we import from China.

The U.S. Trade Representative"s (USTR) tariff list starts with "Frozen retail cuts of meat of swine" and then continues for a couple hundred pages. China has already retaliated by announcing plans to jack up tariffs on about $60 billion worth of American stuff. Trump, in response, is now threatening to apply a 25% tariff on the remaining two-thirds of Chinese imports that aren"t on the U.S. list. That could mean a big tax on basically everything that the U.S. imports from China, with the exception of pharmaceuticals, some medical goods, and various minerals.

What happens to a good that is tariffed? How does the market respond? The ongoing live experiment in tariffs and trade is starting to yield some data. Last month, economists Aaron Flaaen, Ali Hortaçsu, and Felix Tintelnot published a study that provides evidence on the effects of recent tariffs. It"s all about washing machines.

In early 2018, after the American company Whirlpool complained about foreign competition, the Trump administration implemented tariffs on washing machines imported from all over the world. It"s a 20% tariff on the first 1.2 million washing machines sold a year and a 50% tariff on every one after that.

While these tariffs were imposed on foreign manufacturers, the study by Flaaen, Hortaçsu, and Tintelnot, like study after study before it, finds it"s ultimately U.S. consumers who pay. New washing machines in America got about 12% more expensive. That"s not too surprising.

What is surprising is that dryers also got more expensive even though they weren"t subject to the tariff. That"s because washers and dryers are in econospeak "complementary goods." They are more valuable together and are typically bought at the same time. "Before the tariffs, most manufacturers were pricing paired washer and dryer models at the exact same sticker price," Felix Tintelnot, a co-author of the study, says. "This pricing strategy was maintained after the tariffs... so the full effect of tariffs on prices is only visible after factoring in the price of the complementary good – dryers."

The clear losers in the study are Americans who needed to buy a washing machine or dryer in the last couple years. But, because the tariffs made foreign washing machines more expensive, it made American-made washing machines more appealing — and it convinced LG, Samsung, and Whirlpool to create about 1,800 jobs making washing machines and dryers in the US. Cool, right? Not really. After taking into account the extra money paid for these appliances because of the tariff, those 1,800 jobs ended up costing Americans about $815,000 per job every year.

It just adds another scoop of dirt on a mountain of evidence that tariffs are awful economics. It"s not just Republicans. One study that analyzed President"s Obama"s tariffs on Chinese-made tires found that they created about 1,200 jobs at a cost of about $900,000 a year per job. It"s why Douglas Irwin, a economist at Dartmouth who is one of the leading scholars of U.S. trade, calls tariffs "a really inefficient jobs-creation program."

But the tariffs that target only China aren"t even really a jobs-creation program for Americans. "So the big beneficiary here of the tariffs on China are Vietnam, Cambodia, and maybe for electronics, it would be Taiwan," Irwin says. "We"re not going to reshore a lot of this manufacturing. It"s just going to shift to other countries." Ironically, the true winners of a tariff war may be the bystanders. Call it collateral enrichment.

President Trump isn"t the first president to try tariffs. And tariffs have been much higher in American history. But Irwin, whose has written multiple books on this subject, believes this escalating trade war is "historically anomalous."

"We have the two world"s largest economies — which had been for the past 20 years very highly integrated — now all of a sudden kind of decouple from one another," Irwin says. "That"s a big break in terms of the history of the world economy and certainly the usual path of U.S. trade policy."

For trade economists, there is one upside. People call them for interviews more now. "Trade policy has been a very quiet field for economists because things change very slowly over time," Irwin says. "It"s been a little bit of a backwater but swamp has been drained and now we"re at the forefront of public policy discussions."

Import costs from China have become a vital issue for many importers. By many metrics, China is one of the largest product manufacturers in the world. Due to China’s manufacturing reputation, many importers, large and small, turn here when they need to import products for their business. As a result, it’s crucial to have an in-depth understanding of the costs of importing from China.

Yes, there are a number of taxes, duties and other fees required when importing goods from China. Most notably, importers are required to pay import taxes, or customs duties, on imported goods, just like they would when importing from any other country.

Additional costs, like Section 301 tariffs and anti-dumping/countervailing duties (AD/CVD) are owed on specific products imported from China. There are also added costs like Merchandise Processing Fees, Harbor Maintenance Fees, and other miscellaneous costs that have to be taken into account when importing.

Customs duties are owed on nearly every product imported from China to the United States. This rule applies so long as the total value of the imported goods totals $800 or more (known as the De Minimis value). If the goods that you’re importing cost less than $800, they are not subject to duty or taxes (with the exception of goods like alcohol and tobacco).

In order to figure out how to calculate import duty from China to the U.S., you need to know your product’s HTS classification. Every internationally traded item can be classified using the International Harmonized System (HS).

Once you find an item’s corresponding HS code (or HTSUS if importing from the United States), you will find the tariff rate associated with that product. That code will then be listed on the commercial invoice.

In addition to the tariff rate, an HTS code will also indicate whether or not the U.S. has a trade relationship with any country for specific product imports. According to the U.S. International Trade Commission (USITC), tariff rates are broken up into three categories:

China falls under the “General” category. That means that the United States and China do not have a trade agreement in place. No special treatment is given on imports of goods from China to the U.S.A.

In addition to normal customs duties, a country may also impose additional tariffs on products imported from foreign countries. In the case of China, the U.S. has imposed Section 301 Tariffson thousands of goods.

Section 301 was signed in 2018 as part of an ongoing trade war between the U.S. and China. The signing imposed tariffs on $550 billion worth of commodities regularly imported from China to the U.S. The tariffs are broken up into four separate lists, each covering various goods and including exclusions and tariff rates.

Our team of Licensed Customs Brokers can help you determine all of the duties, taxes, and fees you"ll be required to pay and even find you ways to lower the costs.

If a foreign country is found to be “dumping” goods into the U.S. at a far lower cost than those goods are being sold in the U.S., antidumping duties will be put in place. The USITC is the organization responsible for implementing anti-dumping duties. Anti-dumping duties are imposed by taxing the goods in question at a far greater rate than the value of those goods.

Similarly, countervailing duties are placed on certain goods for similar reasons. Countervailing duties are implemented when export subsidies make the sale of certain products non-competitive for domestic industries.

According to Customs and Border Protection (CBP), another fee you’ll have to pay when importing into the U.S. is the merchandise processing fee. The amount you pay depends on whether or not the value of your shipment totals more than $2,500 (not including duty, shipping, or insurance fees).

For example, let’s say you have two separate shipments: one valued at $500, and the other at $3,800. Assuming the $500 shipment is manual, but not processed by CBP, you’d owe a flat rate of $6.66 for your merchandise processing fee. That would bring the total cost of your shipment, plus the MPF, to $506.66.

As for the $3,800 order, you would have to multiply the $3,800 by 0.3464, equaling $1,316.32. However, because this figure exceeds the maximum allowed MPF, your fee would be $538.40. That would bring the total cost of your shipment, plus MPF, to $4,338.40.

If your goods are shipped by sea, you’ll be required to pay a Harbor Maintenance Fee. The Harbor Maintenance Fee rate is 0.125% of the value of the imported cargo. There is no minimum or maximum HMF.

Additionally, this fee is charged for goods regardless of duty-free status. Harbor maintenance fees help cover the costs of maintaining ports and harbors around the country.

Many of the taxes and fees listed above are required in order to import from China. However, there are other costs you need to consider. While not always required, freight insurance is highly recommended, especially for high-value items or any items making a cross seas voyage.

Importers must also consider the cost of shipping, storage, and potential accessorial fees owed on the goods once they arrive at port. Federal excise taxes and sales taxes are also required on certain goods. It’s worth noting that value-added taxes (VAT rates) are not charged on imports from China to the U.S.

No matter what you’re planning to import, it’s important to keep in mind all of the potential costs that you may be responsible for before you make your purchase. Below, we’ll list some options available to help reduce import costs.

Do you need an import compliance manual for your business? Make sure that all of your bases are covered in the event of an inspection by CBP, especially if importing goods from a country impacted by an import ban like China. Read more about import compliance manuals and get help determining if it"s the right move for you.

There are multiple ways to reduce import costs when shipping from China. Ultimately though, the process comes down to getting professional advice and being able to do your own research. Some of the best ways to reduce import costs include:

A customs broker licensed by CBP can be an incredible asset when importing goods from China. Ways that a customs broker can help reduce import costs include:

Customs brokers are there to work for you and address all of your importing needs. Hiring a licensed professional is one of the most surefire ways to ensure that the proper procedures are being followed and to avoid or reduce any potential importing costs.

Our team of Licensed Customs Brokers can help you determine all of the duties, taxes, and fees you"ll be required to pay and even find you ways to lower the costs.

When looking to reduce import costs from China, one of the first steps you should take is to shop around for a supplier offering competitive rates. There are countless manufacturers competing for your business. If you don’t find a price or quality of product that meets your needs, simply shop around and screen suppliers until you do.

Some Resellers Advertise Themselves as Manufacturers:While this may not be an issue for many goods, it could create major issues for products that need to be custom-made or require detailed technical specifications.

If a Price is Too Good to be True, It Probably is:While it’s understandable that you would want to find the lowest prices you can, a price that is too low likely signals that the quality of the item is lacking. Shop around for a competitive rate, but be aware that you might get what you pay for.

Be Aware of Minimum Order Quantities (MOQs):Depending on the size of your business, the amount of product that you need to import may not always match up with a seller’s requirements. You may find a supplier that offers competitive rates, but they might require a large MOQ.

If the amount of product that you would have to order exceeds the benefit that you’d get from ordering from a cheaper supplier, it likely won’t be worth it. Shop around until you can find a supplier that meets your needs for both cost and order quantity.

Are any of the goods you import from China manufactured in or sourced from the Xinjiang region? Any goods or materials produced in the region are prohibited from entry into the U.S. Read our article on the Xinjiang import ban to find out more and avoid having your shipment fined and detained.

Another way to reduce import costs from China is to negotiate for Incoterms ® that meet your importing needs. Incoterms ® are mutually agreed-upon conditions between a seller and buyer.

There are 11 different Incoterms ® that can be negotiated. The most buyer-friendly option is Delivered Duty Paid (DDP). In a DDP agreement, the seller is responsible for all costs associated with the shipment, including transportation, insurance and even customs duties.

On the other hand, the most seller-friendly option is Ex Works (EXW). Under EXW, the buyer is responsible for all costs and risks associated with the shipment.

Many small businesses and importers shipping small orders choose EXW when importing. Oftentimes, it’s difficult to get a seller to agree to Incoterms ® that don’t directly benefit them. Instead, a buyer will choose to work with an experienced and reliable customs broker or freight forwarder. When working with a partner that strives to find the best prices and solutions to meet your needs, you can reduce import costs at every turn.

Remember, Incoterms ® are a negotiation. Both parties obviously want the terms that best suit their needs. As the importer, however, you’re unlikely to make that happen without compromising in other areas.

As a result, the most common Incoterms ® are Free on Board (FOB). Under FOB, the buyer and seller split costs 50/50. The seller assumes costs and risks up to the point that the goods are loaded onto the ship for departure. The buyer takes over from there, taking responsibility for the goods while on the ship or once they arrive at their destination.

Finding Incoterms ® that work for you is one of the best ways to reduce import costs from China. If you’d like to learn more, the International Chamber of Commerce (ICC) has a full list of incoterms ® available.

Whether you or your supplier handle the packing and logistics involved in shipping your goods, it’s important to keep in mind how the proper packaging can reduce costs.

In all likelihood, your products will be loaded onto a massive cargo ship with thousands of containers making their journey from China to the U.S. For those shipments, the name of the game is fitting as much cargo into a container - and as many containers onto a ship - as possible.

As a result, freight charges are often calculated based on the weight and volume that the cargo takes up. By consolidating your goods and packing them in an effort to fit more goods into fewer shipments, you can reduce import costs.

Our team of Licensed Customs Brokers can help you determine all of the duties, taxes, and fees you"ll be required to pay and even find you ways to lower the costs.

The short answer is: No, you can’t. When products are imported into the United States, there are always going to be taxes and fees that need to be paid. The closest option available to avoiding import costs would be to negotiate DDP Incoterms ® with your supplier. In that case, the supplier would be responsible for all transportation, insurance and customs duty costs.

However, it’s unlikely that you’ll be able to get a seller to agree to those terms. Even if you are able to obtain these terms, you’ll likely experience increased costs elsewhere.

When looking to reduce import costs from China, it’s crucial to do your research and calculate all costs you’ll be responsible for before you make your purchase. The main costs you’ll need to consider when making your calculations are:

Cost of Goods: Obviously, this will vary depending on the commodities you plan to import, the quantity you plan to import, and the supplier you choose to buy from.

Duties and Tariffs: To calculate the duty owed on imports from China to the U.S., the first thing you need to do is find your product’s HTS code. You can do this by using an HTS code lookup tool to find your product and its corresponding tariff rate. Additionally, check to see whether your product is subject to any AD/CVD or falls under Section 301 tariffs.

Transportation and Shipping: These costs will vary depending on the mode of transportation you use to ship your products (ocean, air, etc.), the port that your goods are departing from/arriving to, and the shipping company you choose.

The total cost for each of these expenses will always depend on you and your business needs. Once you determine the cost of each of these factors, you can add them together to calculate your total import costs.

New entrepreneurs and established import/export businesses, alike, turn to China when looking to import products into the United States. China is one of the top global options for product sourcing due to its quick turnaround time, high output and low cost of products.

In fact, according to the Office of the United States Trade Representative (USTR), China was the largest supplier of goods imported into the United States in 2020. Altogether, China totaled $434.7 billion and accounted for 18.6% of U.S. imports. The most imported products include:

China is also the U.S.’s seventh-largest supplier of agriculture products, totaling $3.8 billion in 2020. The most imported agricultural imports include:

Whether you’re an experienced importer or a new entrepreneur, navigating the world of customs clearance and global imports can be complicated and confusing. At USA Customs Clearance, we have the experience and know-how to help you buy and sell products internationally, and reduce costs while doing so.

Our Licensed Customs Brokers can guide you through every step of the import process. They can also help you register to become an Importer of Record. If you need to secure a customs bond, we can help with that too. You can even purchase a new importer bundle, which includes each of these options and more! Speak with one of our experts and get started importing today.

Our team of Licensed Customs Brokers can help you determine all of the duties, taxes, and fees you"ll be required to pay and even find you ways to lower the costs.

Dung Trans" business is booming: "Last year, we added a second floor to our factory. And now I"m looking at a new site four times larger than the current one." For his company, Spartronics, an electronics maker, the ongoing trade dispute between China and the United States has been a boon. And he is not alone.

The United States and China have been locked in a trade dispute for more than two years. Between July 2018 and September 2019, the US slapped tariffs of up to 25% on almost all imports from China.

The tariffs have had a profound impact. Before the dispute began, 23% of all US imports came from China – more than $526 billion in 2017 alone, and roughly as much as neighboring Canada and Mexico combined. At the end of 2019, that was down to 18% – a decrease of more than $26 billion.

"The two biggest losers from the conflict are the US and China themselves," says Yasuyuki Sawada, Chief Economist at the Asian Development Bank (ADB). A 2020 ADB analysis finds that GDP and employment in both countries will suffer due to the conflict.

For US consumers, the dispute has largely meant that they have had to pay higher prices for Chinese products, while for China, it has mainly led to a loss in export value, a UN analysis found in November 2019. A look at the biggest Chinese exports to the US confirms that US firms were sourcing substantially fewer cell phones, computers, and furniture from the Asian economic powerhouse at the end of 2019 than at the end of 2017, before the trade war started.

In January 2020, the US and China signed the Phase I deal, aimed at deescalating trade tensions. It called on China to buy billions more in US products in order to shrink the trade surplus that it enjoyed with the US. The condition was deemed unrealistic even before the deal went into effect. The pandemic has only made it more daunting.

"The requirements for additional imports of US products appear very, very challenging, given the growth of the Chinese economy will be much slower than forecast in January," says Yasuyuki Sawada. In addition, the deal kept existing tariffs in place, effectively stalling the conflict instead of resolving it.

The pandemic that followed effectively disrupted global supply chains. But China’s economy has been able to bounce back since the second quarter of 2020. As one of the first major economies to come out of lockdown, it has been able to provide countries like the US with the products they need.

This has been helped by the many tariff exceptions granted by the US in the past months concerning products like not only surgical gloves and face masks, but also many electronic items, car parts and others. All this has boosted trade between the US and China almost back to pre-dispute levels.

But the effects of the trade war are still playing out. While prices for Chinese imports rose during the dispute, US demand in cell phones, computers, lamps or printers didn"t cease. As a result, US consumers and manufacturers are shifting to other countries to get the products they need.

For some, the gains from this trade redirection might even outweigh the negative effects of the dispute. "For non-China emerging economies, the positive impact dominates," says Sawada. "The gain seems to be the largest for countries who can produce similar products to those made in China."

Among those who benefited most was US neighbor Mexico: Between 2017 and 2019, the country exported an estimated $4.7 billion more to the US as a result of the trade dispute.

This is the result of a DW analysis, which looked at goods imported by the US between 2017 and 2019 to find out which countries, and which industries, in particular, have benefited the most. One clue for the importance of an exporter is the market share that its products command among all products imported by its trade partner.

But China"s loss was Taiwan"s and Mexico"s gain: They each gained around six percentage points in market shares. By the end of 2019, they provided 10 and 25% of all computers imported by the US, respectively.

For Mexico, though, the pandemic disrupted the gains made in the past two years. Imports from Mexico to the US have nosedived; Even fewer products come from Mexico to the US now than before the trade dispute began.

That is partly because countries like Vietnam had long started positioning themselves as alternatives to China for foreign manufacturers. "Vietnam has progressively ramped up manufacturing, attracting foreign investors and increasing exports to the US," says Khiem Vu, Vietnam manager at Global Resources, which connects companies to suppliers in Asia.

The trade dispute has accelerated the decision of multinational corporations to relocate from China, he says. "Many have forced their current Chinese manufacturers to shift production to Vietnam. For example, Chinese manufacturers that produce Crocs (foam shoes) have built multi-thousand worker plants in Phu Tho serving only the US market."

Crocs isn’t the only shoe company making the move; Vietnam exported 30% more shoes to the US at the end of 2019 than it did two years back, while exports from China declined by 15%. "Labor-intensive products with high tariffs in China like bags, suitcases, glasses, apparel, furniture, tech and electronics could make Vietnamese suppliers more competitive than ever," says Khiem Vu.

Even more than shoes or suitcases, it"s electronic items like the ones manufactured at Spartronics, as well as cell phones and computers, that have seen the biggest shift.

For Spartronics, the pandemic has only accelerated its growth. "We are lucky to be in the right place at the right time," says Dung Tran. Part of his business comes from manufacturing medical products like ventilators and, COVID-19 test kits. "That’s growing unbelievably. It’s compensating, with a surplus, the challenges we’re facing in our other segments."

All of this has brought about visible changes in Vietnam, Dung Tran says: "I used to live in Silicon Valley, California. I can relate what we"re experiencing in Vietnam to the dotcom boom back then. If you"ve been in Vietnam before and you return back now, you’ll see more buildings, more skyscrapers."

The question, he says, is how fast the country can scale up its infrastructure to deal with the growth. "All of a sudden, you have congestions at airports and ports due to the sheer volume of products coming through. The government is very committed to making an improvement, but it will take time." And at the moment, it’s difficult to say what the next few years will bring.

He is confident that the changes he’s seen in his business and across Vietnam are here to stay. "I think Southeast Asia and Vietnam will continue to grow regardless of these trade issues." Still, he would prefer an end to the trade dispute: "We cannot live without China," he says. "We need to depend on each other in a fair way. That"s very important."

As this analysis shows, a trade dispute between two major countries today almost always affects others as well. "iPads and iPhones and gadgets are now produced using very complicated, tightly connected supply chain networks," says Yasuyuki Sawada. "Chinese products facing lower production will affect suppliers of intermediate products. That will generate big negative spillover effects in Asian countries and economies."

He too hopes for an end to the US-China trade tensions. "The Asian Pacific region has benefited so much from open trade in the last decades. I think it is very important, if at all possible, get back to before the US-China trade tensions era."

The fitness tracker and smartwatch maker Fitbit announced it will move manufacturing operations out of China to avoid tariffs asPresident Donald Trump"s trade war continues to sow uncertainty for many U.S. businesses.

"In 2018, in response to the ongoing threat of tariffs, we began exploring potential alternatives to China," Ron Kisling, the chief financial officer at Fitbit, said in a statement announcing the news on Wednesday. "As a result of these explorations, we have made changes to our supply chain and manufacturing operations and have additional changes underway."

"Based on these changes, we expect that effectively all trackers and smartwatches starting in January 2020 will not be of Chinese origin," Kisling added.

Tariffs on $300 billion of Chinese imports -- cell phones, laptops, video game consoles, toys, computer monitors among them -- are set to go into effect Dec. 15, after an initial delay.

GoPro CFO Brian McGee announced the company was "moving most of our US-bound camera production out of China" by the end of summer 2019, saying in a company statement that they believe "this diversified approach to production can benefit our business regardless of tariff implications."

Crocs also issued a statement in July saying the company would be exploring options to mitigate the effects of tariffs that also could include footwear made in China.

The China–United States trade war (Chinese: pinyin: Zhōngměi Màoyìzhàn) is an ongoing economic conflict between the People"s Republic of China and the United States of America. In January 2018, U.S. President Donald Trump began setting tariffs and other trade barriers on China with the goal of forcing it to make changes to what the U.S. says are longstanding unfair trade practices and intellectual property theft.trade deficit, and that the Chinese government requires transfer of American technology to China.Joe Biden, has kept tariffs in place.

United States trade deficits from 1997 to 2021. Deficits are over 50 billion dollars as of 2021 with the countries shown. Data from the US Census Bureau.

Since the 1980s, Trump had advocated tariffs to eliminate the U.S. trade deficit and promote domestic manufacturing, saying the country was being "ripped off" by its trading partners; imposing tariffs became a major plank of his presidential campaign.

The volume of trade in goods between the US and China has grown rapidly since the beginning of China"s economic reforms in the late 1970s.World Trade Organization (WTO) in 2001,trade deficit in goods with China rising to $375.6 billion in 2017.

The US government has at times criticized various aspects of the US-China trade relationship, including large bilateral trade deficits, and China"s relatively inflexible exchange rates.dumping prices.Belt and Road Initiative, the Asian Infrastructure Investment Bank and "Made in China 2025" alarmed some US policymakers.

During his 2016 presidential campaign, Donald Trump promised to reduce the US trade deficit with China, which he attributed to unfair trade practices, such as intellectual property theft and lack of access by US companies to the Chinese market.trade diversion.

Donald Trump"s first noted advocacy for tariffs was prompted by Japanese economic success in the 1980s, arguing that the U.S. trade deficit was a burden and that tariffs would promote domestic manufacturing that would keep the United States from being "ripped off" by its trading partners.

In the 2016 US presidential election, Trump ran on a protectionist economic platform.Office of the United States Trade Representative (USTR) to investigate Chinese economic practices.

In supporting tariffs as president, he said that China was costing the American economy hundreds