Tips To Help Minimize or Avoid the 10% Tariff Increase
Last night, the Trump administration released a list of Chinese goods that will be subject to an additional 10% tariff; that are worth up to $200 billion dollars. This 10% tariff would be an addition to the July 6th, 25% tariff increase and is due to concerns with China's policies on intellectual property protection. However, there is no effective date yet and will undergo a 2 month review. If you have any questions, please fill free to contact your sales representative or email email@example.com
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Below are some recommendations to minimize the 10 to 25 percent tariff increase.
Tariff Exclusion Request: Companies are given an opportunity to request specific products to be excluded from the tariff increase. The U.S Trade Representative is giving companies 90 days (until October 9th) to explain why their imported goods are important in aiding to the United States economy and if the product cannot be sourced anywhere else.
Assembled vs. Unassembled: Importers should consider checking with their broker on importing products that are unassembled or unfinished, if their finished product has a higher duty rate. Many imported products that are unfinished can qualify for a lower or free duty rate compared to the finished product.
Substantial Transformation: If a product undergoes "substantial transformation", an importer can change the country of origin. The product needs to have a new name, new character, and new use. For example, if you ship sand to Taiwan and they use the sand to make a lamp. The sand underwent substantial transformation, and the country of origin would change to Taiwan instead of where the sand came from originally.