Update on the China Additional Duties


Feel like your head is spinning, when you review the latest developments in the ongoing trade issues between the US and China?  You’re not alone. 

Many US importers and other international trade professionals continue to scramble, just to keep up with the pace of developments in this area.  One especially challenging topic is the “additional duty” rates on various types of China origin goods.

Thus far, the current US Administration has imposed several sets of "additional duty" rates on specified products of China.  These China-specific rates are separate from the "additional duty" rates imposed earlier in 2018 on various products of iron or steel, or of aluminum, from almost all countries of origin.

The first group of these "additional duty" tariffs on products of China (and only China) became effective last summer, and included (among quite a few other types of goods) many types of machinery, including components and accessories.  This first group of "additional duty" tariffs is identified (in the US version of the Harmonized Tariff System) by the HTS number 9903.88.01, and the "additional duty" rate on all affected types of goods is 25%.  As the "additional duty" terminology implies, this is in addition to any other tariffs that would normally apply.

The second group of "additional duty" tariffs on additional specified products of China was imposed last fall, and is identified by the HTS number 9903.88.02.  The "additional duty" rate for this group is also 25%.

The third group of "additional duty" tariffs on still more specified products of China was imposed later last fall, and is identified by the HTS numbers 9903.88.03 or 9903.88.04.  The initial "additional duty" rate for this group was set at 10%, and was originally scheduled to increase from 10% to 25%, effective January 1, 2019.

At the beginning of December, the President announced that the previously scheduled increase in "additional duty" rates for this third group of products would be postponed, for approximately 90 days from the date of this announcement.  This was later clarified to specify that the current 10% "additional duty" rate on these products would continue until March 1.

As announced by the President on Twitter last Sunday night, the set of “additional duty” tariffs on some specified types of Chinese goods is now to remain at 10%, instead of increasing to 25% on March 1 as previously scheduled.

Meanwhile, the "additional duty" rates of 25% for products in the first two groups have remained unchanged since they were imposed, and there have been no announcements of any planned change in this rate, for these products.

So, until there is a further change in the current Administration's trade policy toward China, we can expect that the specified types of Chinese products will remain subject to the 10% or  25% "additional duty" tariff rate, in addition to the current general rate for each HTS classification, and the usual MPF and HMF "user fee" rates.

Many US importers of goods affected by any of these groups of "additional duty" tariffs on products of China are finding their operations significantly affected by the required "additional duty" payments, and are distinctly unhappy about the situation.  However, their comments on this topic do not yet seem to have persuaded the current Administration to modify its position on these "additional duty" tariffs.

Meanwhile, US-China trade negotiations continue, with no clear or obvious end date.  This is still very much a “to be continued…” situation.

Transmark Customs Brokers continues to actively monitor this issue, and we are happy to share our perspective with current and prospective clients, at any time.