china tarriffs on lcd monitors sold to china brands

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.

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(Reuters) - A range of consumer products made in China and sold in the United States are affected by Friday’s new set of tariffs imposed by U.S. President Donald Trump, including in categories such as vacuum cleaners, handbags and lighting fixtures.

The United States early on Friday increased its tariffs on $200 billion in Chinese goods to 25% from 10%, rattling financial markets already worried the 10-month trade war between the world’s two largest economies could spiral out of control. China is expected to retaliate.

The official tariff list includes thousands of product categories, ranging from cuts of meat to furniture and auto parts. Here are examples - among many others - of consumer products affected in nine selected categories:

* The biggest sector affected is a $20 billion-plus category of internet modems, routers and other data transmission devices. One router falling under that category is Motorola Solutions Inc’s Dual-Band AC1900 Router. The company on Friday did not immediately respond to a request for comment on the impact of the tariffs changes on its products.

* Printed circuit boards are also high on the list. ASUSTEK Computer Inc, which sells the Strix Z390-E Gaming motherboard under its Republic of Gamers brand, did not immediately respond to a request for comment.

* Also affected are burglar and fire alarms. Alphabet Inc’s Google, whose Nest unit sells the Chinese-made Protect 2nd Gen Smart Smoke/Carbon Monoxide Wired Alarm, did not immediately respond to a request for comment.

* U.S. consumers looking to buy new lights for their home may also see a price hike, as tariffs will be increased on lamps and lighting fixtures both made “of base metal” and not. Home Depot Inc, which sells lamps from both categories made in China under its Hampton Bay and Alsy brands, did not immediately respond to a request for comment.

* If the trade dispute does not get resolved before the end of the year, American shoppers may also have to pay more for their holiday decorations: one of the categories requires tariff hikes for “lighting sets of a kind used for Christmas trees,” such as strings of lights sold in the United States by Chinese company Brizled. Brizled did not immediately respond to a request for comment.

* Also on the list are household vacuum cleaners made in China. SharkNinja, which sells its Shark Navigator Light Upright Vacuum NV105 in the United States, on Friday declined to comment on the impact of tariff increases on its product.

* Shoppers can also expect to pay more for handbags of any kind made in China, another tariff category. Fossil Group, the maker of the Maya Satchel purse, on Friday did not immediately respond to a request for comment.

* Consumers will be affected by added tariffs on all products in the category of trunks, suitcases and luggage. California-based Ricardo Beverly Hills, the seller of the China-made Mendocino carry-on spinner, did not immediately respond to a request for comment.

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.

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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.

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.

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."

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 following items are prohibited from entering China: arms, ammunition, and explosives of all kinds; counterfeit currencies and counterfeit negotiable securities; printed matter, magnetic media, films, or photographs that are deemed to be detrimental to the political, economic, cultural, and moral interests of China; lethal poisons; illicit drugs; disease-carrying animals and plants; foods, medicines, and other articles coming from disease-stricken areas; old/used garments; and local currency (RMB). Food items containing certain food colorings and additives deemed harmful to human health by the National Health and Family Planning Commission (NHFPC) are also barred.

In addition, China restricts or prohibits the importation of certain commodities related to the processing trade. The “Catalogue of Commodities Which are Restricted or Prohibited from Importing for Use in the Processing Trade” is designed to shift the direction of China’s processing trade toward handling commodities with higher technological content and greater value-added potential. The catalog identifies several types of “prohibited commodities”: used garments; used publications with licentious content; radioactive or harmful industrial waste; and junk and restricted commodities. This list was most recently revised in 2015.

ZHONGSHAN, China — This was supposed to be the year that China’s export machine began to stall. President Trump had imposed broad tariffs on Chinese goods. Countries like Japan and France pushed companies to shift production from China. The pandemic had crippled China’s factories by the end of January.

After reopening in late February and early March, China’s factories began an export blitz that is still gaining steam. Exports soared in July to their second-highest level ever, nearly matching the record-setting Christmas rush last December. The country has grabbed a much larger share of global markets this summer from other manufacturing nations, entrenching a dominance in trade that could last long after the world begins to recover from the pandemic.

China is showing its export machine cannot be stopped — not by the coronavirus and not by the Trump administration. Its resilience lies not only in the country’s low-cost, skilled labor and efficient infrastructure but also in a state-controlled banking system that has been offering small and large businesses extra loans to cope with the pandemic.

The pandemic has also found China better placed than other exporting nations. It is making what the world’s hospitals and housebound families need right now: personal protection gear, home improvement products and lots of consumer electronics.

At the same time, demand has withered for many big-ticket items exported by the United States and Europe, like Boeing and Airbus jets. And with most economies except China’s now mired in recessions, demand has also faltered for the commodities that most developing countries export, particularly oil.

Families all over the world are sprucing up the homes they are now stuck inside. They have been buying everything from computer screens and stereo systems to power tools and home saunas — many of which are made in China.

Hongyuan Furniture in the southern city of Guangzhou has hired 50 extra workers after export orders for its home saunas more than doubled this year. A short drive farther south in Zhongshan, Star Rapid has stayed profitable, making robot casings and quickly producing high-tech models — a process known as rapid prototyping. And a few miles to the west, Trueanalog has ruled out moving production of its top-end stereo speakers to the United States, its main market, or to Vietnam, where wages can be even lower.

At Trueanalog, rows of workers at long, green tables under fluorescent lights meticulously assemble audio speakers for professional recording studios in the United States. China dominates the world’s production of the components that go into the speakers they are putting together — whether magnets, paper cones or rubber foam.

“China has the largest supply chain of the parts you need to make a speaker, and China has the most stable, affordable labor force,” said Philip Richardson, the American owner of Trueanalog.

The Communist Party cast aside restrictive “zero Covid” policy, which set off mass protests that were a rare challenge to the Communist leadership.Traumatized and Deflated:Gripped with grief and anxiety, many in China want a national reckoning over the hard-line Covid policy. Holding the government accountable may be a quixotic quest.

A Cloudy Picture:Despite Beijing’s assurances that the situation is under control, data on infections has become more opaque amid loosened pandemic constraints.

Importance of Vaccines:As the government drops its restrictions, it not only needs to convince people that the virus is nothing to fear, but also thatinoculationsare essential.

Star Rapid, the prototype maker, has benefited from Chinese loans. Within days of the start of the pandemic, the state-controlled Bank of China called Gordon Styles, the company’s British chief executive and owner, and strongly urged him to take a $1.4 million corporate loan at low interest, which he did even though the company was still profitable. Chinese authorities also granted the company a rapid-fire series of partial rebates on taxes and government-mandated benefit costs that together exceeded 3 percent of the company’s sales.

ImageFamilies all over the world have been buying things to spruce up their homes, including saunas made in China.Credit...Andrea Verdelli for The New York Times

ImageDespite facing 25 percent U.S. tariffs, Hongyuan has not encountered new competition from other home sauna manufacturers outside China.Credit...Andrea Verdelli for The New York Times

ImageWorkers loading a truck with finished goods at Hongyuan. The finished saunas are disassembled for shipment, to be reassembled at homes in Europe and the United States.Credit...Andrea Verdelli for The New York Times

The strength of China’s export machine complicates the Trump administration’s push to reduce the trade deficit — the gap between what the United States exports and what it imports. Mr. Trump points to the deficit as proof that unfair practices by China have been hurting the United States, and has campaigned on promises to get tough on China.

Last January, China promised big increases in its imports from the United States as part of an agreement aimed at ending a protracted and increasingly bruising economic war. But actual purchases have lagged.

The agreement left in place most of Mr. Trump’s new tariffs, mainly at 25 percent. Yet those tariffs do not seem to deter many Americans from buying Chinese products, in part because the tariffs are collected only on the wholesale value of products when they reach America’s shores.

Hongyuan says it has not yet encountered any new competition from home sauna manufacturers based elsewhere despite facing 25 percent American tariffs for the past two years. Hongyuan also has access to dozens of suppliers within an hour’s drive that compete vigorously to produce inexpensive glass doors and hinges at the lowest cost.

So Hongyuan can afford to import lumber across the Pacific from Canada, saw the wood and polish it and assemble it into home saunas, and then ship the saunas in kits back across the Pacific all for less than it costs to make saunas in the United States. Considerable hand labor is still involved, although Chinese-made automatic saws now take the lumber in one end and put out boards of various shapes and dimensions.

Such a cost advantage has helped drive China’s share of world exports to nearly 20 percent in the April-to-June quarter this year, up from 12.8 percent in 2018 and 13.1 percent last year, said Rajiv Biswas, the chief Asia economist at IHS Markit, a global data and consulting firm.

Part of that increase is temporary. Some factories elsewhere closed temporarily during the spring because of coronavirus lockdowns or supply chain disruptions linked to the pandemic. China’s own share of global exports dipped somewhat in the January-to-March quarter, to 11 percent, as it was battling the virus.

But China now appears strong in exports across many sectors, even as the cost of its imports is likely to stay low for months to come. China’s trade surplus — when the value of its exports exceeds that of its imports — has ballooned this summer, especially in July.

China’s exports have been helped by the country’s currency, which has remained mysteriously weak even as the economy has emerged from the pandemic with growth stronger than in practically any other nation.

ImageWorkers on the assembly line at Trueanalog in Guangzhou. The company makes top-end audio speakers for professional recording studios in the United States.Credit...Andrea Verdelli for The New York Times

ImageLoudspeakers at the Trueanalog factory. The company ruled out moving production to the United States or Vietnam.Credit...Andrea Verdelli for The New York Times

China’s currency, the renminbi, has strengthened only slightly against the dollar in recent months. It has also weakened 6 percent against the euro since the start of May, even though Europe faces a severe recession.

Foreign economists suspect the Chinese government has used its tight control of the country’s financial system to keep the renminbi weak. Brad Setser, an economist at the Council on Foreign Relations in New York, said the most likely explanation for the currency’s performance this summer was that state-owned or state-controlled Chinese banks and other financial institutions were shifting some of their immense assets, selling vast sums of renminbi and buying dollars or euros to prop up those currencies.

The People’s Bank of China has said, including in a statement last week, that it is not manipulating the renminbi, but has also said it is committed to maintaining a mostly stable value for the currency.

ImageA factory in southern China that makes steel parts for use by other manufacturers. China has retained production of fairly low-tech industries even as wages have surged.Credit...Andrea Verdelli for The New York Times

ImageThe production of steel parts in factories like this one has mostly stayed in China instead of moving to lower-wage countries like Vietnam or Bangladesh.Credit...Andrea Verdelli for The New York Times

ImageExporters in China are often able to find all the parts they need for their products within a couple of hours’ drive.Credit...Andrea Verdelli for The New York Times

China’s advantages go beyond a weak currency, however. China has built a 700-city bullet train network in a decade. It also has an abundance of labor, a culture of long working hours and tightly restricted unions. Manufacturers are not as encumbered by environmental laws against pollution as in many other countries.

Robert Gwynne, a shoe manufacturing and exports specialist in Guangdong, said reviving competitiveness in the United States and elsewhere to compete with China would not be quick or easy.

To be sure, China’s dominance of global manufacturing could be hurt by geopolitical shifts, such as if other countries demand that companies move part of their supply chains elsewhere. The United States and Japan have begun to do so. European governments like France’s have started to move in the same direction, particularly for medical supplies. Large companies with the capacity to set up entirely new supply chains elsewhere, like Foxconn of Taiwan and Apple, are exploring alternatives.

But the pandemic, which has grounded many flights and slowed logistics, has shielded China at least temporarily from attempts to move factories to other countries. Many multinationals have cut back on investment as global demand has slowed, and so have little money to set up new operations elsewhere.

“In the middle of a global recession, companies are not going to divest unless trade barriers force them,” said Joerg Wuttke, the president of the European Chamber of Commerce in China. “Companies would rather close facilities than open up new ones.”

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