Updated April 2021: To support efforts to combat COVID-19, the Government has introduced COVID Exclusions, which include mostly medical-care and COVID response products. This article has also been updated to reflect official links to the four Trade Action Lists as well as a compiled list of all granted product exclusions.
Updated January 2021: Despite Biden’s inauguration, the Trump tariffs remain in place completely.
Update January 15, 2020: China and the United States officially signed Phase 1 of the trade deal. All existing duties will remain in place except for $120billion of goods with 15% duties which will be rolled back to 7.5% (largely from Tranche 4A). View the full trade deal here.
Update October 11, 2019: The White House announced a “Phase 1” deal has been reached; duties will not rise to 30% on October 15 as they were expected to.
Updated August 23, 2019: Duties from List 1, 2, & 3 will increase from 25% to 30% on October 1, 2019. Duties from List 4 will increase from 10% to 15%. Duties from List 4 will be implemented either on September 1, 2019 for some products or December 15, 2019 for others.
Updated August 1, 2019: The Trump Administration announced a 10% additional duty on the remaining $300 bill of goods not currently subject to additional duties (List 4/Tranche 4).
Updated May 5, 2019: The Trump Administration announced that all products on Tranche 3 (“List 3”) would have tariffs raised from 10% to 25% on May 10, 2019. It was also announced that the remaining goods worth over $300 billion that are not currently subject to additional tariffs would also “quickly” be subjected to 25% tariffs.
Updated November 30, 2018: The Trump Administration has agreed to freeze the tariffs increase scheduled for January 1, 2019, for 90 days. Without an agreement reached in this time, tariffs will increase to 25% on April 1, 2019.
Updated September 17, 2018: The Trump Administration has set the implementation date of the latest round of 10% tariffs to September 24, increasing to 25% on January 1, 2019.
A very good percentage of people who read this blog are importers from China who are selling in America.
Starting August 23, 2018, the Trump Administration put additional tariffs on $16 billion worth of products. It escalated to the point that on May 10, 2019, nearly half of all goods that America imports from China were subject to an additional 25% tariffs. On August 1, 2019 the Trump Administration imposed 10% duties on all remaining products not currently subject to additional duties.
The List of Products Affected By Trump’s Tariffs
Trump’s list of items to be tariffed has come in four stages. The first two affected roughly $50 billion of the United States’ $500 billion worth of imports from China. The third list, which went into effect on September 24, 2018, affects $200 billion worth of goods. List 4, not yet in place, will encompass all products not currently hit by List 1, List 2, or List 3.
The first two lists have 25% tariffs. The third list started at 10% and escalated to 25% on May 10, 2019. This is in addition to any existing duties your product may have. So for example, if your product has an existing 8% duty, the new rate would be 8% + 25% = 33%. On August 23, 2019 it was announced that duties on all three of these lists would increase from 25% to 30% on October 1, 2019.
Below is a complete list of all the products affected by Trump’s tariffs. These are lists of HS Codes. If you are an importer and do not keep accurate records of your HS codes, now is the time to review your previous customs forms and figure out what these codes are for your products.
|List 1 – July 6, 2018 – $34 Billion (25%);||List 2 – Aug. 23, 2018 – $16 Billion (25%);||List 3 – Sept. 24, 2018 – , $200 Billion (10%). Increased to 25% on May 10, 2019;||List 4A/4B – All remaining goods (15%). List 4A starts Sept. 1, 2019; List 4B starts Dec. 15, 2019.|
|Download the list of Affected Items for Round 1, July 6, 2018||Download the list of Affected Items for Round 2, August 23, 2018||Download the list of Affected Items for Round 3, September 24, 2018||Download List 4|
|Does not include products approved by congress for exclusion listed here.|
Thousands of products have been excluded from the list of affected products. You can view an updated list of exclusions on the United States Trade Representative website. Each of the four lists have their own set of excluded products, but we also found a compiled list of all exclusions across all branches from ST&R.
List 4 (Spring/Summer 2019)
Along with Lists 1-3, the Trump Administration released its final proposal for List 4, for implementing tariffs on the remaining $300 billion worth of goods currently not subject to additional duties. On August 1, 2019 the Trump Administration announced these remaining goods would be subject to an additional 10% tariff starting on September 1, 2019.
This final tranche will be reviewed until June 17, 2019. Previously for List 3, one month after the review period the additional tariffs were put in place. It’s reasonable to assume that List 4 will be implemented some time near the middle of July 2019 if no trade deal is reached.
Are You Affected by These Tariffs?
The first two lists largely targeted non-consumer products such as industrial products, medical products, transportation products, etc. In other words, there is a very good chance that the average Amazon seller was not affected by List 1 or List 2 of increased tariffs.
However, nearly every seller has ultimately been impacted as nearly every product imported from China is facing some type of additional duty (unless it is an excluded product).
How to See How Much Your Competitors Are Importing from China
Want to see how much your competitors are importing from China?
Custom import records are public information in the United States and there are multiple tools that allow you to simply search for a company name and see exactly how much these companies are importing from China.
My favorite tool for this is Jungle Scout’s Supplier Database tool which costs less than $50 a month (other more expensive options include Import Genius and Panjiva). These tools will neatly summarize all of the information included on a particular company’s Bill of Lading information such as product type, quantity, and supplier name/address.
What You Can & Cannot Do About These Tariffs
There are some things that you can do to minimize the impact of any additional tariffs:
- Review your products’ HS codes immediately and determine if they are affected by List 1, List 2, or List 3
- Use the daily $800 de minimis threshold to your advantage
- Diligently plan how much stock you hold considering that tariffs may be removed on very short notice if a trade deal is reached
- Raise prices
What you shouldn’t do:
- Deliberately misclassify your goods to avoid lower duties
- Ship goods through an intermediary country like Canada (duties are based on Country of Origin, not the last transit point)
The most important thing you can do is to determine if you will have any products impacted by the new duties and determine if your pricing should be raised to reflect the new tariffs.
Additionally, the United States does allow up to $800/day of goods to be imported without paying any duty which you can use to your advantage. Finally, plan your inventory diligently. Ordering 12 months worth of inventory is probably not a great idea given the fluidness of things and the fact a trade deal could be reached at any time.
What you should not do is look at deliberately misclassifying your items to avoid duties. What many people do not realize is that your shipments are not fully ‘liquidated’ until 12 months after clearance into the United States. This means that your shipments can be reviewed for up to 12 months after clearance to assess whether they have had the correct HS Code applied (you know that bond you pay for when importing goods into the United States? This is to pay for your duties in the event you are re-assessed and can’t afford to pay up). You can be sure post-clearance audits of shipments will increase significantly in the future.
Additionally, first importing your goods into another country like Canada will not avoid the tariffs as duties are based on the original country of origin.
Predictions for the Future
As polarizing as Donald Trump is, “getting tough” on China is one issue he has relatively bipartisan support on. As Elizabeth Economy (a well respected China commentator) from China File said “The trade war signifies far more than President Trump’s desire to rebalance the bilateral trade deficit. It represents the culmination of decades of pent-up frustration within the United States over China’s failure to make good on the promise of its 2001 WTO”.
While the current impasse will likely be resolved, it’s likely that strong resentment and disagreements on both sides of the Pacific will remain. Many have raised the possibility that even if the tariffs are removed in the short term, they may be reinstated at a later date. As China expert Michael Hirson said, “[Any] deal’s implementation is likely to be rocky, with a real risk that the U.S. will reimpose tariffs in the next one-two years.”
Importers find the announcement of a new round of duties extremely annoying, at the very least. We, the importers, are paying the costs in the short term and will be loathed to increase prices. But this burden will be passed on to the end-user. Prices will rise and consumers will be the real ones paying the cost in the long run.
The good news is, like most trade disputes, this is one will likely be resolved eventually. But hopefully, a lasting resolution is reached sooner rather than later.
Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He’s also a former Amazon warehouse employee of one week.