China Tariffs (HTS 9903.01.20)

This update on China tariffs (HTS 9903.01.20) has major implications for importers. Here’s what it means for customs clearance, costs, and supply chain planning:

Key Takeaways from 9903.01.20 (Effective 2/4/25)

1. Covers Nearly All Chinese & Hong Kong Products

   • With few exceptions, most imports from China and Hong Kong will be subject to the additional ad valorem duty under HTS 9903.01.20.

2. Additional Duties Still Apply

   • Any existing antidumping (AD), countervailing (CVD), taxes, and fees will still be charged on top of these new tariffs.

3. No De Minimis Exemption

   • Shipments under $800 (which normally qualify for duty-free import under 19 USC 1321) will not be exempt.

   • Small e-commerce businesses that rely on de minimis shipments from China will face new costs.

4. No Duty Drawback Allowed

   • Importers cannot claim a duty drawback on these additional tariffs, meaning no refunds for re-exported goods.

5. "On the Water" Grace Period (For Goods in Transit Before 2/1/25)

   • Shipments already on the water (laden or in transit before 2/1/25) and entered before 3/7/25 can use HTS 9903.01.23, potentially avoiding the full impact of the new tariffs.

   • Importers should carefully time shipments to take advantage of this grace period.

How This Impacts Your Customs Clearance & Business

✅ Higher Import Costs – Businesses will need to recalculate landed costs and adjust pricing.✅ Potential Supply Chain Disruptions – Expect delays due to increased customs scrutiny and compliance requirements.✅ No Small Package Loophole – E-commerce businesses using de minimis entry will lose their tax advantage.✅ Reclassification & Compliance Risks – Customs may reclassify products, leading to unexpected tariffs or penalties.✅ Urgency for Early Shipments – To minimize impact, ship before 2/1/25 to take advantage of the on-the-water exemption.

Next Steps for Importers

🚀 Classify Your Products – Check if they fall under 9903.01.20 and determine applicable duties.📊 Reevaluate Sourcing – Consider alternative suppliers outside of China (e.g., Vietnam, Mexico).📦 Optimize Shipping Timelines – Expedite shipments before February 1, 2025, if possible.💡 Work with a Customs Broker – Ensure compliance and explore duty mitigation strategies.

Would you like assistance finding alternative suppliers or tariff mitigation strategies for your products? 🚢📦