U.S. tariffs on many imports from China are already high and there is increasing pressure to raise them still further. ST&R can help you determine how much such a change would cost your business and how best to mitigate that impact.

The Biden administration appears to have no intention of eliminating Section 301 tariffs on imports from China and has continually delayed a review that could offer limited relief. Former President Donald Trump is threatening to increase tariffs on Chinese goods to 60 percent or more if he is elected this November. In Congress, a bipartisan report issued in December recommended moving China to a new column in the Harmonized Tariff Schedule that would result in substantially higher tariffs on imports of Chinese products. In each case the underlying motivation is to give the U.S. leverage to hold China to its trade commitments, prevent it from engaging in coercive or other unfair trade practices, and decrease reliance on Chinese products in sectors important for national and economic security.

Further tariff increases on Chinese goods would come at a substantial cost to U.S. companies. For example, a recent analysis by Sandler, Travis & Rosenberg found that rescinding China’s normal trade relations status and moving Chinese-origin imports from Column 1 to Column 2 of the HTSUS would (at current tariff rates) have resulted in additional duties of approximately $195.3 billion in 2022 and about $131.4 billion during January-October 2023. U.S. import duties on Chinese goods (including Section 301 duties) totaled $57.7 billion in 2022, but those duties would have soared to an estimated $253.0 billion had Column 2 duties been in place on such goods during that time. Similarly, the $37.5 billion worth of duties assessed on Chinese goods during January-October 2023 would have jumped to about $168.9 billion.

ST&R’s analysis shows that this tariff increase would have been particularly harmful for products for which the U.S. is largely reliant on China. Smartphones, which currently benefit from duty-free treatment on an NTR basis and are not subject to Section 301 duties, would have been hit with $12.3 billion in Column 2 duties during the period January-October 2023, followed by laptops at $10.8 billion, toys at $7.1 billion, lithium-ion batteries at $4.0 billion, and video game consoles and machines at $2.9 billion.

ST&R can provide a detailed assessment of the additional duties your company would have faced over the past two years if the products you import from China had been subject to Column 2 duties. ST&R can also provide, among other insights, breakdowns of the Column 2 duty impact at the HTSUS chapter level as well as on any number of eight-digit subheadings.

For more information on this service, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.

In the meantime, there are a number of proven and legitimate ways for importers, exporters, and manufacturers to effectively escape or limit the impact of current and potential future tariffs. Click here for more information.

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