301 Tariff lists Questions and Answers
Not surprisingly, the recent 301 Tariff increases have caused a lot of confusion and questions. To that end, this Blast will answer some basic questions that people have posed. By no means is this Blast intended to be the final determination on this subject. As always, it is the Importer’s responsibility to know the products they import and use due diligence in providing the correct information to the US Government. If you have further questions, please contact your BOC Representative.
Attached are the three 301 Tariff lists as they were announced. As we’ve seen, though – with anything that’s in the news and potentially political, these are subject to change.
Question: What date does List 3 go into effect?
Answer: September 24, 2018, all products included in this list will be subject to an additional 10% rate of duty. This duty rate will remain at 10% for the rest of the year and then increase to 25% beginning on January 1, 2019.
Question: If our vendor manufacturers product in China, can we ship the product from China to another country, like Taiwan, and then ship it to the US to avoid these increased tariffs?
Answer: No. The US Government looks at where the product is manufactured, or where a “substantial transformation” happens, not which ports were shipped from/to.
Question: : If our vendor manufacturers product in China, and we ship first into Canada, and then ship it to the US, will we avoid these increased tariffs?
Answer: No. The US Government looks at where the product is manufactured, or where a “substantial transformation” happens, not which ports were shipped from/to. When it comes into the US, it will be subject to the increased duty rate.
Question: With the new increased tariffs, we’ve realized that we should be using a different HTS number to classify our freight. This would result in lower duties. Is this okay?
Answer: It depends. CBP is watching closely for companies who change their HTS number of a product to avoid paying the higher duty rate – this is a key red flag, that will raise increased scrutiny of your entries.
HOWEVER, if you have analyzed your classifications, and find that your product truly was classified incorrectly in the past, and you need to change the classification to be correct, then we would recommend filing a prior disclosure with CBP, showing all the entries where you’ve brought this product into the country for the past 5 years. This could open your company up to paying a higher duty rate for the past 5 years’ of product, but you may pay a lower duty rate going forward. The key element, always, is to ensure your product is classified correctly. Again, it is the Importer’s responsibility to make sure the information you provide to CBP is accurate.
Question: My HTS number is on one of the three lists, but the description does not match exactly. Does that mean I am not subject to the higher duty rate?
Answer: No, the duty rates go by HTS number. However, if the description in the full Harmonized Tariff Schedule does not match the description provided, please double-check the HTS number you are using to make sure it is correct for the product you are importing.
Question: What date is determinative for the new increased duty rates?
Answer: Date of arrival at the first port in the US is the date the duty rates are applied – first arrival by plane, ship or train. The application date has nothing to do with entry filed date. For example, if duty rate goes into effect 9/24, and ETA of the vessel into Long Beach is 9/22, and entry is filed 9/20, and then the vessel actually arrives into Long Beach on 9/25, the new higher duty rate will apply, because the vessel arrived 9/25, after the date the new duty rate goes into effect.
Question: What if we bring freight into a bonded warehouse in the US. What date is determinative for the new increased duty rates?
Answer: The date the product is pulled from the warehouse will determine what duty rate will apply.