WHAT’S THE LATEST

On May 12, the United States and China agreed to a temporary suspension of the majority of reciprocal tariffs placed on each country’s imports after a meeting in Geneva. This agreement lowers each country’s tariffs by 115% for 90 days, effective May 14, and sets a framework for further negotiations.

Total remaining tariffs during 90-day pause:

  • China: 10% on U.S. imports
  • United States: 10% IEEPA Reciprocal tariff, with no change to 20% IEEPA Fentanyl, Section 301, Section 232, or any other previously implemented tariffs (which is effectively a 30% base rate on products made in China). 

WHAT WE KNOW

  • China is suspending retaliatory tariffs and other countermeasures announced since April 2 including the initial 34% tariff announced on April 4.
  • China is maintaining a 10% tariff during the 90-day suspension.
  • The U.S. is suspending the increased tariffs announced on April 8 and April 9, along with the initial reciprocal tariff of 34% announced on April 2.
  • The U.S. is maintaining tariffs announced prior to April 2, including Section 301 tariffs, Section 232 tariffs and the tariffs related to fentanyl. The tariff on Chinese imports stands at 30%.

WHAT'S NEXT?

SEKO's Guidance

Our team is actively monitoring developments day-by-day, ensuring we have the latest information to guide our clients. With 58 U.S. locations and 8 locations across China and Hong Kong, SEKO is well positioned to support your international trade operations and help you take advantage of new opportunities created by this deal.

SEKO advises clients to continue to utilize and consider the benefits of deferring duty payments utilizing direct ACH along with periodic monthly statement, which provides an average payment terms of 36 days for duty. 

SEKO also advises clients to review HS code classifications for products traded with China to ensure proper tariff treatment under this new agreement. Additionally, to help manage duty payments under the new tariff structures, clients may consider enrolling in U.S. Customs’ Periodic Monthly Statement (PMS) program to consolidate duty payments and improve cash flow management.

In addition, the 90-day window provides a level of certainty around tariffs on Chinese merchandise which has not existed in several months. Importers should review their supply chain to identify if this certainty creates opportunities to move up purchase orders to minimize impact of the potential for tariffs being increased at later time. 

With a potential rush of orders and/or pull forward of traditional peak season, combined with the repositioning of airplanes and vessels on the TPEB route, it is advised to make bookings as soon as possible with your SEKO representative.

Take Action: Schedule a free 30-minute consultation meeting with our team of experts today to explore how we can keep your supply chain moving smoothly.

If you have questions, please reach out to your SEKO representative, or email us at hello@sekologistics.com.