china tarriffs on lcd monitors made in china

Otherwise, without such Approval, even if the goods have arrived at the China Customs, they will not be cleared normally, and the goods will be detained in the port till get such approval, or even be returned, causing you huge losses.

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.

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.

China on Tuesday announced that it would remove tariffs on raw material and other products that cannot be produced domestically but are needed by next-generation monitor manufactures, in a move, analysts say, aimed at further bolstering China"s semiconductor supply chain.

From January 1, 2021 to December 31, 2030, producers of thin film transistor liquid crystal displays (TFT LCD), active-matrix organic light-emitting diode (AMOLED) display devices and micro-LEDs will be exempted from import taxes for raw materials and consumables that cannot be produced domestically, or in cases where domestic supply falls short of demand, according to an official notice.

Enterprises that import new equipment during the period will be able to pay value-added tax on their imports in installments within six years after the first items were imported, with no overdue payment fees, said the notice released by China"s Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.

It is timely for China to issue policies to support the next-generation display industry, which plays a very important part in building the semiconductor industry chain, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Tuesday.

"It shows that China encourages imported materials and equipment to enter the market to step up the nation"s self-sufficiency in a bid to establish China"s own semiconductor industry chain and prevent key technology from being strangled by the US," Xiang said.

TFT LCDs, AMOLED display devices and micro-LEDs are used in an increasing range of applications, giving products better visual presentation, contrast, response times, and energy efficiency. For instance, micro-LEDs are especially suitable for making smart watches and augmented reality displays.

"Next-generation monitors have a great market opportunity, since they can be used in various intelligent terminals. In the past five years, more and more enterprises have made such displays," Xiang added.

Imported raw materials account for over 60 percent of display panels in the next-generation display industry at present, said Wang Dongsheng, marketing director of an LCD manufacturer in Central China"s Hubei Province.

"The favorable policies come as good news for the industry," he said. "They are expected to give a boost to the technological innovation of upstream manufacturers, enhance the competitiveness of export enterprises, and accelerate the application of new intelligent terminal display devices," Wang said.

There are broad applications for next-generation display devices driven by China"s consumption upgrading and the dual-circulation economic development paradigm with a greater focus on the domestic market.

All the information, data and documents are provided by ETCN only for your reference. ETCN promises to collect and edit them in due care but shall not be liable for their correction and accuracy. In case of any discrepancy, official versions and interpretations shall prevail.

This website is using a security service to protect itself from online attacks. The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data.

Two days after Independence Day 2018, President Donald Trump’s aggressive new tariffs went into effect, imposing anextra 25% taxon imported Chinese goods. This affected over $50 billion worth of “industrially significant technologies” used by U.S. electronics manufacturers and their buyers.

Many industry groups held their tongues in hopes that the president would successfully force Beijing to play fairer with intellectual property rights and more. Until early May 2019, that seemed likely, as Trump repeatedly claimed a historic trade deal with China was imminent.

So, why are electronics makers suddenly looking at the possibility of tariffs on virtually everything? And where will the tariffs on electronics from China end up as we approach 2020?

In mid-June, 7 days of hearings were held before the Office of the U.S. Trade Representative on the president"s proposal to expand tariffs to an additional $300 billion in imports from China. These are pretty much the only imports from China -- from any industry -- that remain tariff-free.

The USTR has gotten more than 1,000s of written comments on the plan, almost all of them condemning the tariff proposal. They say the additional measures would:

Trump"s recent threats toimpose tariffs on Mexican imports in a dispute over border security, coupled with fading prospects for a compromise in the China trade war, has resulted in increasingly loud opposition.

On September 1, 2019 tariffs were instituted on roughly $110 billion in Chinese imports. This change hit a variety of markets, including apparel, footwear, home textiles, and some technology products -- including the Apple Watch.

Tariffs of 25% imposed previously on $250 billion worth of Chinese goods are set to rise to 30%. That was initially going to happen Oct. 1, but in September the president announced a delay to Oct. 15.

So, what does this mean? All suppliers should be expected to pass through current and any new tariffs. In 2018 this meant raising costs of all components listed in the Section 301 tariff act, including:

Since many suppliers produce components in multiple countries, you may not know until shipping whether the “country of origin” for your components will be China. This means that when placing orders, ECM buyersdo not always know whether they’ll be subject to additional taxation.

Additionally, there are current talks of additional 15% tariffs being placed on about $160 billion in Chinese goods, mostly electronics including laptops and cellphones, in December of 2019.

The only way around the tariff is to ensure that goods were not reshipped into the U.S. from China via a third-party country. Most electronics contract manufacturers have provided OEMs with a surcharge, with the position that the tariffs were likely temporary. Others, however, have been charging at cost. Now, who knows how they"ll adjust charges?

A number of industry associations -- like the International Distribution of Electronics Association -- and individual businesses -- like Matric Group -- have made efforts to have component-level parts removed from the list. Still, the best thing to do in the meantime is to stay informed and know what to expect.

These are all consumer electronics tariffs. There have been rare exceptions made for general electronics, and we"ll wait to hear more about tariffs at the component level. The tariff increase"s scope has yet to be finalized, if angry U.S. CEOs have anything to say about it.

A 25% tariff on electronic components doesn"t mean a direct 25% increase in the final cost ofyour product.Some estimatesput the price hike in the 3% range for a typical low-to-mid-volume production, but that could increase if tariffs begin affecting active components like integrated circuits.

Even with the lack of consumer electronics on the currently enforced tariffs list (for now), higher prices in the supply chain have led in some cases to higher prices of finished goods for consumers.

Worried about the impact of tariffs on U.S. manufacturers? You may want help with component life cycle management? An electronics manufacturer that offers full aftermarket services can take that headache off your hands:

WASHINGTON (Reuters) - U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales.

The delay which, affects about half of the $300 billion target list of Chinese goods - along with news of renewed trade discussions between U.S. and Chinese officials - sent stocks sharply higher and drew cautious relief from retailers and technology groups.

Trump’s 10% tariffs will be effective from Dec. 15 for thousands of products including clothing and footwear, possibly buttressing the holiday selling season from some of the fallout from the protracted trade spat between the world’s two largest economies.

“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” Trump told reporters in New Jersey. “Just in case they might have an impact on people, what we’ve done is we’ve delayed it so that they won’t be relevant to the Christmas shopping season.”

The U.S. Trade Representative’s Office announced the decision just minutes after China’s Ministry of Commerce said Vice Premier Liu He conducted a phone call with U.S. trade officials.

Liu agreed with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to speak again by phone within the next two weeks, the ministry said.

The delay in tariffs on a substantial portion of a $300 billion list of remaining Chinese imports sent U.S. stocks surging, after steep losses in the past week, with the Standard & Poor"s 500up 1.5% and the Nasdaq Compositegaining nearly 2%.

Shares of market bellwether Apple Incsoared 4.2% on news that its core iPhone, tablet and laptop computer products would be spared from tariffs for the time being.

But the Trump administration still plans to impose 10% tariffs on thousands of Chinese food, clothing and other consumer electronics products beginning Sept. 1.

Among these are Chinese-made smartwatches from Apple and Fitbit, smart speakers from Amazon.com Inc, Googleand Apple, and Bluetooth headphones and other devices, a category estimated at $17.9 billion last year by the Consumer Technology Association.

Flat screen televisions from China, a category worth $4.5 billion, also will face 10% tariffs on Sept. 1 after being spared from Trump’s first round of tariffs more than a year ago.

A trade group representative said USTR informed them that it opted to delay tariffs on items where China supplies more than 75 percent of total U.S. imports. Product categories where China supplies less than 75 percent will still face tariffs on Sept. 1, the representative said, speaking on condition of anonymity because the information was not publicly released.

Based on a Reuters analysis, the delay could extend to around half of the $300 billion list of remaining Chinese imports. Chinese imports subject to the tariffs on Dec. 15 totaled about $156 billion last year, according U.S. Census bureau data.FILE PHOTO: U.S. President Donald Trump meets with China"s President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019. REUTERS/Kevin Lamarque/File Photo

While most retailers would have stocked their holiday merchandise before the September deadline, some might have faced the tariffs for fill-in orders late in the holiday shopping season.

Still, the Retail Industry Leaders Association said “removing some products from the list and delaying additional 10% tariffs on other products, such as toys, consumer electronics, apparel and footwear, until Dec. 15 is welcome news as it will mitigate some pain for consumers through the holiday season.”

The Consumer Technology Association applauded the delay on some items, but added: “Next month, we’ll begin to pay more for some of our favorite tech devices – including TVs, smart speakers and desktop computers. The administration should permanently remove these harmful tariffs and find another way to hold China accountable for its unfair trading practices.”

The 21-page-list of products that will not get hit with tariffs until December also includes baby monitors and strollers, microwaves, instant print cameras, doorbells, high chairs, musical instruments, ketchup dispensers, baby diapers, fireworks, sleeping bags, nativity scenes, fishing reels, paint rollers and food products.

A separate group of products will be removed from the tariff list altogether, the USTR said, “based on health, safety, national security and other factors.” It did not immediately identify these items.

Trump announced the Sept. 1 tariffs less than two weeks ago, blaming China for not following through on promises to buy more American agricultural products during talks in Shanghai at the end of July. That move was met with a drop in China’s yuan currency a few days later, prompting the Trump administration to declare Beijing a currency manipulator and sending markets tumbling for several days last week.

In a sign the administration may be expecting something in return, Trump tweeted on Tuesday: “As usual, China said they were going to be buying ‘big’ from our great American Farmers. So far they have not done what they said. Maybe this will be different!” Trump tweeted.

Trump’s tariff delay comes amid growing concerns about a global economic slowdown. Goldman Sachs said on Sunday fears of the U.S.-China trade war leading to a recession were increasing and Goldman no longer expects a trade deal between the two countries before the 2020 U.S. presidential election.

Trump has also personally criticized Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl amid an opioid overdosing crisis in the United States.

Reporting by David Shepardson, David Lawder, Makini Brice and Susan Heavey in Washington; additional reporting by Jeff Mason in Morristown, New Jersey; Writing by David Lawder; editing by Tim Ahmann, Marguerita Choy and Cynthia Osterman

Aug. 15 – China may lift import duties on LCD panels in order to motivate domestic LCD panel manufacturers and attract more foreign direct investors to build production lines in the country, according to a report by Right Site Asia, an online Asian industrial information platform. The tariff rate may jump to 8 percent from the current 5 percent.

China’s Ministry of Industry and Information Technology announced fiscal and policy support for domestic panel production back in 2008 in a bet to reduce the country’s heavy reliance on LCD panel imports from Japan and Taiwan. If the government approves the tariff hike this time, a number of traditional LCD exporters to China will likely lose competitiveness in prices.

However, on the other hand, the tariff increase is expected to largely encourage those enterprises that already have their own production lines in China. Both China’s BOE Technology Group and China Star Optoelectronics Technology have put their fresh 8.5-Generation LCD panel plants into production recently, leading the whole industry to step into a new era where the country’s demand for LCD panels larger than 32 inches is no longer completely dependent on imports.

Bai Weimin, vice chairman of China Video Industry Association, recently expressed his confidence in the future of Chinese LCD panel companies after a major import order worth US$5.5 billion was struck between mainland color TV manufacturers and Taiwanese LCD panel producers. Bai said he believes such orders will be reduced in the future because Chinese enterprises will start to produce more panels by themselves.

It is also hoped that increasing levels of foreign direct investment (FDI) will be introduced to the industry. In fact, several Asian LCD panel giants are already moving. The South Korea-based Samsung Electronics’ 7.5G panel plant in Suzhou Industrial Park (SIL) – the company’s joint venture with the SIL and the Chinese consumer electronics maker TCL – has kicked off construction in May this year, and is expected to boast a monthly capacity of 100,000 glass substrates when it enters mass production in 2013. Another South Korean company, LG Display, also plans to begin construction on an 8.5G plant in Guangzhou at the end of August, while the Taiwan-based AUO is investing in a joint venture to build an 8.5G plant in Kunshan, which will be put into mass production in 2013.

Before China, the European Union has set up the example of using a tariff strategy to attract more FDI into the region’s panel industry. The region’s import duties on LCD panels – which used to be as high as 14 percent – worked effectively to make a large number of LCD monitor suppliers relocate their production lines to the East European countries, but it also incurred trade disputes. The EU had to agree to void LCD monitor tariffs earlier this year, following a trade complaint filed by Taiwan.

May 10thsees the US-China trade dispute escalating yet again as the US continues to hike tariffs on US$200 billion worth of Chinese imports, going from 10% to 25%.TrendForcepoints out that TVs , monitors, notebooks and other display products were not among the US$250 billion worth of goods hit by the 25% tariffs, thus the current impact on panels and the display industry remains to be fairly limited.

Yet tensions amid the US-China trade war has intensified. China has swiftly responded in retaliation, imposing 5%-25% punitive tariffs of its own on US$60 billion worth of goods on May 13th, Taipei Time. Likewise, the US has released its 4thlist of tariffs, including US$325 billion worth of China exports among the items to suffer 25% tariffs. Notebooks, which make up a sizeable proportion of imports in revenue, are especially deserving of close attention.

The significance of notebook PCs lies in 3 areas, and one should note that not only are the US and China both harmed by the high tariffs, but Taiwan is also caught up in the storm. First of all, nearly 90% of notebook PCs imported to the US are assembled in China, with Chongqing as its main industrial city for these products. Lacking other production bases of similar scale with highly integrated supply chains for flexible procurement, China will suffer a terrible hit in exports should punitive tariffs begin to fly.

Secondly, the North American notebook PC market is highly reliant on domestic brands in the US. According to TrendForce"s global shipment statistics for notebook PC brands 2018, American brands HP, Dell and Apple"s market shares combined comprised up to 66% of the entire North American market. Looking at it from another angle, shipments for the North American market took up 40~50% of total shipments and formed the main source of business for each of the three giants. If tariffs are imposed on notebook PCs, American brands will begin to lose competitive power due to elevated costs from tariffs, impacting both business and profits. If the tariffs reflect themselves in the end prices for notebook PCs, then there will be good reason to worry whether the North American market, which comprises up to a third of global notebook PC shipments,will suffer from a stifled sales momentum. Should that come to pass, it shall be mayday for both American notebook PC brands and the global notebook market.

Lastly, Taiwan"s suppliers have long accumulated competitive power in and concentrated on notebook PC manufacturing. The three aforementioned American brands all depend 90% on Taiwan"s suppliers. If punitive tariffs become unavoidable, Quanta, Compal and Wistron may become another center of impact in this disaster . Some notebook PC ODMs have expanded their production capacities in Vietnam, Taiwan and other locations outside China since 2018 in an attempt to minimize the potential impacts from tariffs. Although the change in places of production may circumvent the tariffs, notebook PC supply chains have long been situated in China. Shipping the relevant upstream components to new plants overseas of China will incur additional fees and time costs, thus leading to an inevitable overall increase in cost despite the tariff work-around.

In TV markets, having TVs made in Mexico and shipped to America for sale have always been the business model for years under considerations of tariff-related incentives and logistic costs. Taking the current top four TV brands by market share for example, we see that Samsung and LG have enormous production capacities in Mexico, allowing the two Korean manufacturers to circumvent the towering tariffs on China imports with ease, thanks to the additional resources at hand.

In contrast, Chinese brand TCL, catapulted by sharp price strategies, and Vizio are still highly reliant on China manufacturers for production. Although TCL possesses some capacity in Mexico, it is only enough for 50% of US demand. That is to say, once TVs are included in the list of products to suffer punitive tariffs, a reshuffling of brands by brand strength and market shares shall ensue.

China-based CEC-Panda LCD Technology and Top Victory, a subsidiary of TPV Technology, will jointly invest CNY35 billion (US$5.57 billion) to set up a 10G line for the production LCD...

The China government has officially announced that it will raise the tariff rate levied on imports of LCD panels in sizes over 32-inch from the current 3% to 5%, effective on April...

Samsung Electronics reportedly has submitted an application to Korea"s Ministry of Knowledge Economy (MKE) for upgrading its planned 7.5G LCD panel production line in Suzhou, China...

China"s second largest LCD panel maker China Star Optoelectronics Technology (CSOT) is set to start mass production at its 8.5G plant on October 12, 2011, becoming the second maker...

China has emerged as the world"s third biggest supplier of large-size TFT LCD panels, with over 70% of the end products in the four major large-size panel applications being made...

BOE Technology"s (BOE) first 8.5G TFT LCD panel production line began trial operations in June 2011 and is expected to enter mass production in October. According to industry sources,...

Market rumors indicate that Taiwan Ministry of Economic Affairs (MOEA) may allow China-based TV vendors to joint-invest in Taiwan panel makers as long as the stake is no higher than...

With AU Optronics (AUO) receiving permission from the Taiwan government to set up a 7.5G TFT-LCD panel production plant in China, Chimei Innolux (CMI) has reiterated that it will...

Acting president of AU Optronics (AUO), Max Cheng, has again urged the Taiwan government to speed up the review of AUO"s project to set up a 7.5G TFT-LCD production plant in China...

The US is rapidly ramping up efforts to try to hobble China"s progress in the semiconductor industry - vital for everything from smartphones to weapons of war.

In October, Washington announced some of the broadest export controls yet - requiring licences for companies exporting chips to China using US tools or software, no matter where they"re made in the world.

Washington"s measures also prevent US citizens and green card holders from working for certain Chinese chip companies. Green card holders are US permanent residents who have the right to work in the country.

Alan Estevez, undersecretary at the US Commerce Department announced the rules, saying his intention was to ensure the US was doing everything it could to prevent "sensitive technologies with military applications" from being acquired by China.

Countries in Asia that produce chips - such as Taiwan, Singapore and South Korea - have raised concerns about how this bitter battle is affecting the global supply chain.

The US restrictions have broad implications. Last week, UK-based computer chip designer Arm confirmed that it was not selling its most advanced designs to Chinese firms including tech giant Alibaba because of US and UK controls.

China has filed a complaint against the US with the World Trade Organization (WTO) over its export controls on semiconductors and other related technology.

In its WTO filing, China alleged that the US is abusing export controls to maintain "its leadership in science, technology, engineering and manufacturing sectors".

US Assistant Secretary of Commerce for Export Administration Thea Kendler said "US national security interests require that we act decisively to deny access to advanced technologies."

The complaint specifies that the US has imposed restrictions on the export of approximately 2,800 Chinese goods, but only 1,800 of these were allowed under international trade rules.

Earlier this month, the WTO ruled that US tariffs on steel and aluminium that were imposed by the US under former President Donald Trump violated global trade rules.

Japan and the Netherlands could possibly impose export controls on China - limiting the ability of Japanese and Dutch companies to sell advanced products to the Chinese market.

On Monday, White House national security advisor Jake Sullivan said the US had discussions with the two major suppliers of chip making equipment around adopting similar US controls on Beijing.

"I"m not going to get ahead of any announcements," Mr Sullivan told reporters. "I will just say that we are very pleased with the candour, the substance and the intensity of the discussions."

Mr Wennink said that the Dutch government, in response to US pressure, had already stopped ASML from selling its most advanced lithography machines to China since 2019.

For instance, Apple"s new laptop will contain chips from industry leader Taiwan Semiconductor Manufacturing Company measuring 3 nanometres. To put that into perspective - a human hair measures roughly 50,000 to 100,000 nanometres.

Analysts say US controls could put China further behind other chip producing countries, even though Beijing has openly said it wants to prioritise the manufacture of semiconductors and become a superpower in the sector.

WASHINGTON (Reuters) - The U.S. Trade Representative’s office said on Tuesday it has extended China tariff exclusions for a wide range of goods, including smart watches and certain medical masks, through the end of 2020, rather than renewing the previous one-year extensions.

The extension of only four months would likely maintain some leverage over China’s implementation of a Phase 1 trade deal, but would increase uncertainty for importers of products ranging from Bluetooth devices to upright pianos.

In a Federal Register notice here, USTR said the extensions applied to products excluded from "Section 301" tariffs imposed by President Donald Trump a year ago on a range of Chinese consumer goods amid tense trade negotiations between the world"s two largest economies. The tariffs on some $125 billion worth of goods were set at 15%, then lowered to 7.5% by the Phase 1 deal signed in January.

The products included a number of Bluetooth and wearable data-transmitting devices, such as those imported from China by Apple Inc, FitBit, Sonos and other technology companies.

Also on the list of extended exclusions were a number of face masks, respirators and other medical products, including stethoscope covers, cotton gauze sponges and blood pressure cuff sleeves. Products ranging from upright pianos to liquid crystal display modules and stainless steel watch cases also were excluded until year-end.

USTR had previously granted one-year exclusions from the tariffs. The Federal Register notice did not indicate a specific reason for extending the exclusions for only four months, but the Trump administration has threatened to raise tariffs should China fail to implement the Phase 1 agreement launched in February.

While U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He reaffirmed their commitment to the deal last week, China’s purchases of U.S. goods and services are well behind the pace needed to meet first year targets of a $77 billion increase over 2017 levels.

“The U.S. Trade Representative will take account of the cumulative effect of exclusions in considering the possible further extension of the exclusions covered by this notice, as well as possible extensions of exclusions of other products covered by the action in this investigation,” the agency said.

WASHINGTON, July 19 (Reuters) - Importers of technology products from China paid over $32 billion worth of tariffs imposed by President Donald Trump between mid-2018 to the end of 2021, a new trade group report showed on Tuesday as the Biden administration continues to deliberate over whether to remove some duties.

The Consumer Technology Association said in the report that the tech industry has reduced its dependence on China in the wake of the tariffs, but this has been offset by increased imports from Vietnam, Taiwan, South Korea, Malaysia and other countries.

Roughly half of the $32 billion in tariffs were paid on Chinese-produced computers and electronic products, CTA said. Total "Section 301" tariffs paid on Chinese goods through July 13 totaled $145.43 billion, according to Customs and Border Protection data.

The report comes as the Biden administration is trying to determine whether to remove some of the tariffs as a way to provide American consumers relief from high inflation, which remained low during the first two years that the tariffs were imposed.

Ed Brzytwa, CTA"s vice president of international trade, said in a statement that the tariffs were hurting U.S. businesses, not solving China trade challenges.

"With rising prices across all sectors of our economy, removing tariffs would mitigate rampant and harmful inflation and lower costs for Americans," he said.

CTA"s review of import trends since the tariffs were first imposed in phases in mid-2018 show that imports of Chinese tech goods hit by Section 301 tariffs fell by 39% over the next three and a half years, while those not affected grew by 35%.

China’s share of U.S. imports of tech products hit by the tariffs roughly halved to 17% in 2021 from 32% in 2017, CTA said. About half of the $32 billion in tariffs were for computers and electronics products.

The group said there was no such shift tech products unaffected by tariffs, with China accounting for 84% of U.S. imports in these categories in both 2017 and 2021.

But some imports of Chinese produced consumer tech goods were higher in 2021 than 2017 despite the tariffs, suggesting that the motivation among some companies to "leave China" had abated. Among these were digital cameras, certain cooking appliances and vacuum cleaners including robot vacuums.

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.

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.

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.

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.

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.

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.

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.

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.

Since the beginning of 2018, the United States and China have increased tariff rates on each other"s imports, contributing to fears of a global downturn. In the near-to-medium term, there are several channels through which increased tariffs and continued uncertainty could affect global growth. First, higher tariffs are equivalent to a tax increase, with negative effects on consumption and investment. Second, given China"s important role in global value chains, an increase in bilateral tariffs could disrupt supply chains, with significant negative effects on output. Third, increased uncertainty could dampen GDP if firms delay investment and hiring. Finally, the same forces could negatively affect sentiment and roil international financial markets. Outside of these immediate though eventually temporary effects, a persistent increase in tariffs would likely negatively affect the long-run productive capacity of the economy. Higher tariffs could slow the accumulation of capital, shift resources into less productive sectors, reduce the extent of competition, or interfere with the dissemination of technological advances.

In this note, we employ a particular model of trade policy effects following Caliendo and Parro (2015) that focuses on the role of tariffs in spurring adverse resource reallocations. Higher U.S. tariffs on imports from China raise the price of those goods, increasing the production cost for U.S. firms as intermediate inputs become more expensive, thus lowering U.S. productivity and GDP. In China, tariffs decrease demand for those products for which China is most productive, pushing resources into less productive sectors and lowering overall GDP. While the primary focus of our note is to quantify the long-run effects of permanent increases in U.S.-China import tariffs on Chinese GDP, our model also provides an estimate of the effect on U.S. GDP, as well as third-party effects on countries not directly involved in the tariff increases.

Our trade model suggests that the direct long-run impact of the currently implemented tariffs on Chinese output is likely to be small, effectively reducing the level of real GDP by 0.25 percent. Further, the model estimates that if the United States were to hike tariffs an additional 25 percentage points on the remainder of imports from China, Chinese GDP would fall by a modest 0.39 percent. All told, these results suggests a limited long-run imprint from a further significant increase in tariffs by the United States and China. That said, these are long-run impacts under the assumption of full employment and therefore do not capture the impact of any transient factors described above. In addition, the model does not capture a wide range of other indirect effects, such as associated decreases in investment or reduced innovation stemming from less competition. As such, we view these estimates as a likely lower bound.

Table 1 presents the tariff hikes by the United States and China since the beginning of 2018. Panel A shows the implemented tariffs and Panel B shows the proposed tariffs. Columns (1) through (3) present the U.S. trade policy actions and columns (4) through (6) present China"s actions.

The first trade policy action by the United States was the approval of a 28-percent tariff increase on all imported solar panels and washing machines (line 1) after manufacturers in those industries filed petitions for more protection against foreign competition. The tariff took effect in January 2018 and affected all U.S. trading partners (not shown), including China (column (3)).

The second announcement came in March 2018 after an investigation by the U.S. Secretary of Commerce concluded that foreign countries" trade practices with the U.S. posed a threat to U.S. national security. Consequently, under Section 232 of the Trade Expansion Act of 1962, President Trump signed an executive order to impose a 25- and 10-percent tariff hike on steel and aluminum imports, respectively (line 2). While some countries received an extension, the tariffs went into effect for China on March 23 on an estimated $3 billion of imports. China in turn imposed a 15- to 25-percent tariff hike on $3 billion of U.S. goods, including pork, nuts, fruits, and scrap aluminum.

The third development also occurred in March. Following a year-long Section 301 investigation, the United States Trade Representative (USTR) released a report stating that China"s "Made in China 2025" tech strategy has systematically sought to misappropriate U.S. intellectual property. As a result, the U.S. government announced it would impose a 25-percent tariff hike on $50 billion of Chinese goods. On July 6, the 25-percent tariff increase went into effect on the first $34 billion of imports from China (line 3) and China imposed an equivalent tariff increase of 25 percent on $34 billion of U.S. goods, including soybeans. The 25-percent tariff hike on the remaining $16 billion of Chinese goods took effect on August 23, eliciting an equivalent response from China.

The fourth trade policy action occurred in September, when President Trump announced a 10-percent tariff increase on approximately $180 billion of Chinese goods, which went into effect on September 24 (line 4). In response, China increased tariff rates by 5 and 10 percent on an additional $60 billion of imports from the U.S. In late 2018, the United States and China agreed to temporarily hold off on additional tariff hikes up to March 1, while resuming trade negotiations and in early 2019 President Trump extended this deadline indefinitely following progress in ongoing trade talks.

The fifth and most recent trade policy action occurred in May 2019; citing a breakdown in negotiations, President Trump announced a 15-percent tariff hike on top of the 10-percent tariff already in place on $180 billion of Chinese goods, which went into effect on May 10 (line 5). In response, the Chinese authorities released a list with tariff hikes of 5 to 15 percent on the $60 billion of U.S. goods, which took effect on June 1. To date, the United States has raised tariffs on about $235 billion of Chinese goods and China has raised tariffs on about $113 billion of U.S. goods (lines 1-5).

The U.S. administration has additionally threatened to impose a 25 percent tariff increase on the remaining $275 billion of Chinese imports currently unaffected by the recent U.S. tariffs (line 6).2 As shown in table 2, if the totality of tariffs enumerated (lines 1-6) were implemented, they would cover 23 percent of U.S. non-oil goods imports and 2.6 percent of U.S. GDP and would raise the average U.S. tariff on imports from China by 24.9 percentage points. Similarly, a retaliation by China on all imports from the United States would cover 8 percent of all Chinese non-oil goods imports and 1 percent of Chinese GDP.

We analyze the impact of the recently implemented and proposed tariffs using an international trade model developed by Caliendo and Parro (2015), which builds on the seminal model of trade and geography of Eaton and Kortum (2002) to include multiple tradable and non-tradable sectors, input-output linkages, and global imbalances. In the analysis, we include 30 separate countries and a rest-of-the-world (ROW) entity modeled as one aggregate block.3 The model includes 40 sectors, of which 20 are tradable and 20 are non-tradable, as shown in Table 3.

Each country consists of consumers who purchase final goods, earn labor income, and receive transfers from tariff revenues and from country-specific trade imbalances with all other countries.4 Countries produce composite intermediate goods, which can either serve as final goods for consumption or can be used as inputs in the production of other (tradeable and nontradeable) intermediate goods. We assume that production exhibits constant returns to scale and operates at full employment, using labor and a composite intermediate good (also referred to as materials) as inputs. If we define sectors by $$$j$$$and countries by $$$n$$$, the production function for intermediate goods is given by:

where $$$z_{n}^{j}$$$ denotes productivity in country $$$n$$$ and sector $$$j$$$, $$$l_{n}^{j}$$$ denotes labor, and $$$m_{n}^{k,j}$$$ are the materials needed from sector $$$k$$$ for the production of the intermediate good in sector $$$j$$$. Since production exhibits constant returns to scale and markets are modeled as perfectly competitive, firms price goods at their unit cost:

Countries can source composite intermediate goods domestically or from international suppliers. International trade, however, is subject to trade costs. Denoting country $$$n$$$ as the importer and $$$i$$$ as the exporter, we split trade costs into tariffs $$$\tau _{ni}^{j}$$$ and the typical iceberg trade costs $$$d_{ni}^{j}$$$ which include shipping and other costs. We model these trade costs as multiplicative: $$$(1+\tau _{ni}^{j})d_{ni}^{j}=1$$$. Therefore, the price of an intermediate good in destination country $$$n$$$ is the lowest price across all producers $$$i$$$ after accounting for trade costs, $$$p_{n}^{j}=\min_{i}(\frac{c_{t}^{j}(1+\tau _{ni}^{j})d_{ni}^{j}}{z_{i}^{j}})$$$. Plugging in the firm"s pricing equation (2) and adjusting for international trade costs yields the final price:

In this note, we focus on the role of tariffs in spurring adverse resource re-allocations through the lens of our model. For example, as shown in equation (3), higher U.S. tariffs on imports from China, $$$\tau _{USA,CHN}^{i}$$$, raise the prices of those intermediate goods, $$$p_{USA}^{j}$$$, thus lowering U.S. productivity and GDP. In China, tariffs decrease demand for those products for which China is most productive, pushing resources into less productive sectors and lowering overall GDP. We note that the model assumes each country operates at full resource utilization, including full employment, so misallocation of resources is the sole cause of productivity loss.

An important feature and advantage of our multi-country model is that it incorporates trade diversion– exporters can divert their goods to other destinations and importers can switch suppliers, thereby mitigating the negative effect of higher import prices. This approach highlights the main offsetting forces in analyzing the spillovers of permanent U.S.-China tariff hikes. On the one hand, countries could lose as China and the United States push resources into less productive sectors whose goods would otherwise have been imported. On the other hand, countries could gain via trade diversion.

Bilateral Trade We use bilateral trade from the United Nations Statistical Division Commodity Trade (UNCOMTRADE) database for 2016 at the Harmonized System 6-digit (HS-6) level.

Bilateral and Sectoral TariffsWe collect sectoral tariff data from the United Nations Statistical Division-Trade Analysis and Information System (UNCTAD-TRAINS) and Most-Favored Nation (MFN) databases for 2014 and 2016, respectively. The UNCTAD TRAINS data contain bilateral tariffs at the HS-6 product level. The MFN data provide importer-specific MFN tariff rates. We then aggregate bilateral tariffs at the HS-6 level to sectoral bilateral tariffs for the tradable sectors in Table 3 using bilateral trade weights. All told, we compute 31 by 31 bilateral tariffs for each of the 20 tradable sectors in 2016 and assume infinitely large trade barriers for the 20 non-tradable sectors to serve as our baseline. The implemented and proposed tariffs are computed using the lists released by the USTR and China"s Ministry of Commerce.

We first present the computed changes in trade-weighted bilateral tariffs. Table 48 shows the import-weighted bilateral tariffs between the U.S. and China for the scenarios described in Table 1.

The first important finding from studying the baseline tariffs is that bilateral trade between China and the United States was already subject to non-zero tariffs. For instance, the top line shows that the initial import-weighted tariff on U.S. imports from China is about 2.5 percent. Interestingly, the import-weighted tariff on China"s imports from the U.S. is notably higher at 5.9 percent. To date, the import-weighted tariffs on U.S. imports from China have risen to 16 percent, whereas those on China"s imports from the United States have risen to 20 percent (line 5).

The scenario in line 6 highlights that the effective tariff rates would increase sharply if the proposed tariffs were implemented. For example, if the U.S. were to impose a tariff increase of 25 percent on the remaining $275 billion of imports from China, line 6 shows that the effective new tariff for the U.S. would be 28 percent, an increase compared to the baseline of about 25 percentage points (=28-2.5).

Figure 1 plots the bilateral tariffs for each sector. The top panel plots the U.S. tariffs on imports from China in the baseline and shows the tariff rate for the implemented and proposed tariff actions. The bottom panel shows the corresponding Chinese tariffs on U.S. goods.

Several features are noteworthy. First, tariffs vary widely by sector. For instance, the U.S. import tariff on China"s textile sector is above 10 percent, whereas in the paper sector, it is nearly 0. Second, China"s import tariffs are generally higher than those in the U.S.; that is, the blue bars in the bottom panel are taller for most sectors than in the top. This highlights the importance of having a model with multiple sectors to capture the differences in trade exposures and net increases in tariffs. Finally, the sixth scenario in Table 4 would dramatically increase tariffs and thereby poses a significant downside risk (grey bars).

We study the impact of each of the six trade scenarios highlighted in Table 4 on Chinese and U.S. growth. For each of these scenarios we increase the bilateral tariffs for the U.S. and China at the HS-6 level and aggregate those into sectoral bilateral tariffs. We then solve for a new steady-state equilibrium using our international trade model and compute the changes in real Chinese GDP, real U.S. GDP, and these countries" bilateral trade relative to our baseline scenario.

Table 5 presents the results. According to our model, the currently implemented tariffs are expected to have a limited impact (line 5), reducing the level of real GDP in China by 0.25 percent (column (1)). The direct negative effect stems from a drop in Chinese exports to the U.S. Higher tariffs on imports from China increase the prices U.S. consumers and producers face on Chinese goods, as highlighted in equation (2), and thereby reduce U.S. demand for Chinese goods by an estimated 33 percent, or $159 billion as shown in columns (3) and (4). However, we find that this negative effect is in part mitigated by China diverting its exports to other countries (not shown).

Turning to the United States, the model estimates show that the implemented tariffs lower real U.S. GDP by 0.19 percent. Similarly, higher Chinese tariffs on imports from the U.S. reduce Chinese demand for U.S. goods by an estimated 43 percent or $58 billion as shown in columns (5) and (6). Note that the decrease is smalle