25% China Retaliatory Tariff Delay

The National Customs Brokers and Forwarders Association of America (NCBFAA) published the following news article. We want to share it with you so that you are aware of the situation and to make clear the timeline for the 90-day extension announced by the White House on December 1. Until the U.S. Trade Representative publishes the official notice in the Federal Register, we will be unable to pre-clear goods arriving in 2019. We will continue to monitor the situation and keep you up to date. If you have any questions, please contact your local C J representative. 

On December 1, the importing community was relieved when the White House announced that the 301 retaliatory tariff rates on $200 billion worth of products from China will not increase to 25% on January 1, 2019, but will instead remain at 10% for a 90-day period while U.S. and China negotiators seek agreement on structural changes relating to forced technology transfer, IP protection and other outstanding trade issues.

This development created some confusion among importers and customs brokers as to when the 90-day period started, due in part to conflicting statements from Administration officials. Further clarification from the Administration confirms that the starting point for the 90-day period is December 1, which means the 25% tariff rate will take effect on March 1, 2019, if an agreement is not reached by that date.

Still, more confusion is occurring when customs brokers who transmit entries early for shipments arriving after January 1 notice that CBP’s system applies a 25% tariff rate for these products. The reason: CBP cannot change the tariff rate to 10% until the USTR publishes an official notice in the Federal Register. The USTR General Counsel is working with the White House to prepare the Federal Register notice, which will be finalized and published prior to January 1.

Therefore, customs brokers should be aware that 10% will be the correct duty rate on January 1, but CBP’s system will nevertheless show a duty rate of 25% until official notification is published in the Federal Register.