CT MarketAlert: Navigating the Impact of New Tariff Regulations: What we Know…

Overview
Significant changes are being proposed to the U.S.-China trade landscape that could dramatically increase costs for goods of Chinese origin. Here’s what you need to know:

1. China 301 Tariff Increase

   • Current rates (25%) may rise to 60%, with an additional universal 20% duty.

2. Restoring Trade Fairness Act (RTFA)

   • Proposes revoking China’s Normal Trade Relations (NTR) status, shifting tariffs to higher Column 2 rates.
   • Incremental increases:
     • Non-strategic goods: 35%+ tariffs.
     • Strategic goods (e.g., electronics, machinery): Up to 100%.
   • Full implementation would occur over five years.

3. De Minimis Eligibility

   • Proposed removal of small-value shipment exemptions for Chinese goods.

4. Valuation Changes

   • The proposed RTFA introduces a new system for calculating the value of goods from China, called “United States Value.” This system requires importers to declare the price at which goods would be sold in the U.S. market at the time of importation, rather than relying on traditional transaction values. Key details include:
     • Importers must submit the “United States Value” to U.S. Customs and Border Protection (CBP) at the time of entry.
     • CBP will independently verify these declared values and report findings to the U.S. International Trade Commission (ITC).
     • If discrepancies are found, CBP will assign a revised value, potentially altering the final duty owed.
     • The implementation process and enforcement mechanisms remain unclear, raising concerns about administrative challenges and delays.

This change could introduce additional complexity and financial uncertainty for importers, emphasizing the need for diligent compliance and proactive planning.