WHAT’S THE LATEST

In an Executive Order issued on May 12, U.S. President Trump provided further details on the trade deal reached with China, including changes to the de minimis treatment for low-value imports from China and Hong Kong.

WHAT WE KNOW

  • Reciprocal Tariffs
    • On May 12, the United States and China agreed to lower each country’s tariffs by 115% for 90 days.
    • The reduction is for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on May 14.
    • China is maintaining a 10% tariff during the 90-day suspension.
    • 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%.
    • HTS language is amended to allow for 9903.01.25 to be used for products of Chinese origin. This HTS was previously used for all IEEPA reciprocal 10% tariffs which was set to expire on July 9th.
    • 9903.01.63 of the HTS is amended by deleting “125%” each place that it appears and by inserting “34%” – meaning reciprocal tariffs on China would be expected to increase from 10% to 34% (or 30% to 54%) if a full deal is not reached during the 90-day pause.
  • Tariff on Products Moving via Postal Network 
    • The ad valorem rate is reduced from 120% to 54%.
    • The per item rate of $100 is maintained, however, the increase to $200 previously set to go into effect on June 1 is removed.

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 advises clients to review HS code classifications and entry dates for products traded with China to ensure proper tariff treatment under this new agreement.

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.