Ask An Attorney - US China Pause
The US and China have agreed to reduce the crippling tariffs on each other’s exports for a period of 90 days. The U.S. is lowering the retaliatory tariff from 145% tariff to 30%. Please note the following:
- Pause is only for 90 days, with no guarantees or information what will or could happen then;
- Reduction likely to take effect this Wednesday, May 14, 2025;
- Will apply to all goods that are products (origin) of China;
- Other existing duties and tariffs will continue to apply – underlying MFN, Sec. 301, any Sec. 232 (none currently applicable to home products unless they contain aluminum or steel), the IEEPA Fentanyl tariffs of 20% AND now a Reciprocal Tariff of 10%: For example, your product’s normal duty rate is 5% but is also subject to a 7.5% Sec. 301 tariff. This agreement means that your new total tariff for the import from China would be 42.5% once this agreement is effective.
Also please note that if you still have exclusions from the Sec. 301 tariffs – those exclusions are expiring on May 31, 2025 and it is extremely unlikely that they will be extended.
Courtesy of Meeks, Sheppard, Leo & Pillsbury LLP
IB&M Additional Comment:
- Bond insufficiencies have surged over the past two months, due to the additional tariffs. It is important to note Customs bond formula includes the most recent 12 months of duties, taxes and fees paid. Therefore, it will be at least one year for those months with the higher duty payments to fall off the bond formula equation. Your bond principals are still encouraged to forecast their anticipated monthly duties to arrive at the proper bond limit to sustain a full 12-month bond period.
For more information on the US-China agreement, please see the
Fact Sheet published by the Trump Administration.