U.S. Tariffs on Chinese Goods: Understanding the Updates

It can be a confusing time for the international shipping community due to the U.S. government’s implementation of new tariffs on Chinese goods entering America. As these rounds of regulations have unfolded over the last few months, shippers have been left trying to understand what products have been included in the first two waves of tariffed goods and what these changes mean for their supply chains. Recently, the United States Trade Representative (USTR) announced the implementation of additional tariffs – which was included in a new third list. Below is a full timeline of events and a comprehensive list of the updated regulations.

Earlier Tariffs Released (still actively being imposed)

List Number One:

On July 6, 2018, the first list was introduced and is comprised of 818 products with a total import value of $34 billion. These impacted goods are subject to a 25% increase upon arrival into the U.S. Affected goods include:

• Engines and motors
• Construction
• Drilling and agricultural machinery
• Machines for working minerals, glass, rubber or plastic
• Rail locomotives and rolling stock
• Motor vehicles and motorcycles
• Helicopters and airplanes
• Testing, measuring and diagnostic instruments and devices

List Number Two:

On August 23, 2018, the second list went into effect that includes 284 tariff lines with a total import value of approximately $16 billion. These impacted goods are subject to a 25% increase upon arrival into the U.S. Affected goods include:

• Plastics/plastic products
• Industrial machinery
• Machinery for working stone, ceramics, concrete, wood, hard rubber or plastic and glass
• Cargo containers
• Tractors
• Optical fibers

List Number Three:

On September 24, 2018, a third list was announced which includes 5,745 products with a total an import value of $200 billion. These impacted goods now have a 10% increase upon arrival into the U.S. and will increase to 25% starting January 1, 2019. Affected goods include:

• Agricultural products – such as fruits, vegetables and honey
• Consumer goods – including metal and wood furniture
• Industrial items – such as chemicals and liquefied natural gas
• Meats and fish
• Vehicle parts – including axles, driving shafts and radiators

Also, in the most recent USTR announcement was information about products that were originally supposed to be included in this third round of imports that have been removed from the list – such as “certain consumer electronics products such as smart watches and Bluetooth devices; certain chemical inputs for manufactured goods, textiles and agriculture; certain health and safety products such as bicycle helmets and child safety furniture such as car seats and playpens.”

What Should Shippers Do?

It’s critical that importers monitor current global trade news to ensure they understand any pending customs tariff, duty or trade agreement changes that could impact their material landed costs. Close collaboration with their international service providers is beneficial as well to ensure they are aware of current global transportation conditions that are affected by trade policy decisions. Getting caught off guard when you receive a customs duty statement with an unanticipated cost increase is never an enviable position.

Mollie Bailey, Director, International, Transplace, has more than 20 years of international transportation experience. She is responsible for operations and regulatory compliance for Transplace’s ocean and air forwarding business. Prior to joining Transplace, Ms. Bailey worked for CH Robinson International for 14 years in all facets of the global operations division. She served as General Manager of the DFW International office prior to joining Transplace International. Ms. Bailey is a Licensed Customs Broker.