China imports en route have shot at beating US tariff clock

China imports en route have shot at beating US tariff clock

US President Donald Trump on Friday increased tariffs on approximately $200 billion in imports from China from 10 percent to 25 percent. Photo credit: Shutterstock.com.

US importers under certain circumstances will be able to receive shipments from China by June 1 without having to pay the 25 percent tariff that took effect on Friday, according to a client advisory issued by C.H. Robinson.

US Customs and Border Protection Friday issued CSMS Message# 19-000238 advising the trade that shipments arriving in the country by June 1 will be subject only to the previous 10 percent tariff under two conditions: the goods were exported before Friday and the importer had either a customs entry on file with CBP on or after May 10 and before June 1; and the goods have an immediate transportation (IT) inbond issued for goods arriving on or after May 10 and before June 1.

The Trump administration and China have been engaged in a trade war that began last summer with the announcement of 10 percent tariffs on more than $200 billion of imports from China that took effect in September. China retaliated with tariffs on a number of US exports. When the administration announced that the tariffs would increase to 25 percent on Jan. 1, 2019, US retailers and manufacturers front-loaded imports in November and December, upending normal seasonal shipping patterns in the trans-Pacific and overwhelming warehouse capacity in Southern California.

The 25 percent tariffs were delayed until March 1, and then delayed again until Friday, as US-China negotiators attempted to reach an end to the trade war. Even as the negotiations continued this week, the 25 percent tariffs took effect Friday. However, confusion persists among some in the container shipping industry given the time lag in the departure of the vessels from Chinese ports and the arrivals at US ports.

It can take three weeks for vessels to arrive at US East Coast ports and two weeks to West Coast ports. Also, shipments involve various customs documents that are required in order to enter goods into US commerce. APL and Matson provide expedited ocean services with West Coast transits of about a week-and-a-half.

“Imports of Chinese goods on or after June 1, 2019, will be subject to the full 25 percent rate, even if the goods were exported prior to May 10, 2019,” the C.H. Robinson advisory stated. The Office of the United States Trade Representative also issued a notice regarding the temporary measures and the firm deadline of June 1. These rates are based on the country of origin, and not the country of export, the logistics provider stated.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.