Trump: 10% on China 'Opening Salvo'; Goods on the Water Spared Through March 6

President Donald Trump, speaking to reporters at the White House Feb. 3, said imposing additional 10% tariffs on all Chinese goods "was just an opening salvo," and said, "if we can't make a deal with China" to stop fentanyl smuggling, the tariffs will go "substantially higher."

One of the biggest changes with the tariff action is that goods from China no longer will be eligible for de minimis.

For all imports from China and Hong Kong starting Feb. 4, "requests for de minimisentry and clearance for ineligible shipments will be rejected," CBP said in a CSMS message Feb. 3. "The filer/importer has the option of filing an appropriate formal or other informal entry and paying all applicable duties, taxes and fees," it said.

All mail shipments from China will not be released by CBP unless there is a formal entry filed, CBP said in the Federal Register notice announcing the China tariffs.

Thompson Hine's Dan Ujczo wrote that the de minimis change "has implications for e-commerce retailers, fast fashion and many other North American companies, including the warehouse and third-party logistics providers that have large presences in border regions."

Marianne Rowden, CEO of E-Merchants Trade Council, told International Trade Today that she believes that Trump's executive orders calling for import duties on goods from China, Canada and Mexico could preempt the notice of proposed rulemaking for entry of low-value shipments (see 2501130006) for the duration of the emergency declared under the orders.

Should the executive orders levying duties on China remain in place, importers and e-sellers will need to keep track of a product's country of origin, as opposed to the country where the good is shipped from, to determine whether de minimis is available, Rowden told ITT.

Rowden also said importers should be aware that "these duties are cumulative, so e-sellers and/or importers need to calculate the General or Preferential rate, any additional duties (sec. 301 duties on Chinese products), AND the new duties imposed by the President’s Executive Orders," Rowden said by email. "The cumulative effect of these duties may result in the e-seller and/or importer not being able to sell the product at a competitive price especially when other related fees (e.g., customs brokers fees to make entry, surety bond, etc.) are added."

Cindy Allen, CEO and managing director of Trade Force Multiplier, questioned whether the orders would inhibit customers from ordering cheap products online or reducing the amount that is imported from China.

The tariffs are imposed through the International Emergency Economic Powers Act, and are based on an earlier emergency declared for fentanyl smuggling and immigration at the southern border.

CBP's FR notice said that emergency's scope was expanded "to cover the failure of the People’s Republic of China (PRC or China) government to arrest, seize, detain, or otherwise intercept, chemical precursor suppliers, money launderers, other transnational criminal organizations, criminals at large, and drugs."

Goods on the water that were loaded before 12:01 a.m. EST on Feb. 1 will be spared the tariffs as long as they arrive before 12:01 a.m. EST on March 7.

No drawback shall be available with respect to the additional duties imposed pursuant to the Executive Order. You cannot use foreign-trade zones to avoid the tariffs, either.

Trump said in the Oval Office Feb. 3 that he would be speaking to China in the next 24 hours. China hadn't announced a retaliation action yet but said it "has conducted counternarcotics cooperation with the U.S. side in a broad-based way. The achievements we have made are there for all to see. The U.S. needs to view and solve its own fentanyl issue in an objective and rational way instead of threatening other countries with arbitrary tariff hikes. Additional tariffs are not constructive and bound to affect and harm the counternarcotics cooperation between the two sides in the future."