Import duty from China to US is a focus point while importing from China to US. The reason is that there is exiting a scenario of the trade war between China and US. China is a huge market for many products. Most people choose the best product and learn every step of selling them online or locally but they are still facing the confusion of import duty from China to US.
Importers face a lot of problems while importing from China to US because they don’t know the importance of import duties. For a new importer, before starting the business it is necessary to know the import duty from China to US.
It is a very important question, how much and when you have to pay as an import duty from China to US? But the answer is very simple if you learn it step by step. Even you can calculate the rough estimation of your Import duties from China to US.
In this article, we will learn the Import duties and the custom clearance problems while importing from China to US. So, let’s move on without any more delay.
Chapter 1: What is an import duty from China to US?
When you are shipping goods internationally from one country to another, you may have to pay import duty. Import duty from China to US is a tax imposed by the US government on goods while importing from China to US. Import duty from China to US varies from product to product.
While importing from China to US, you have to know two words tariff and import duty. It is confusing for most of the buyers.
The tariff is the percentage of tax on an imported item while the import duty is the actual amount of total tax. If you are importing a bicycle then the tariff rate is 10% and if the total worth of bicycles is $10000 then import duty is $1000.
Import duty from China to US is highly concern because China is a huge market of production while US is a selling market due to Amazon. It is very important to know the actual amount of import duty from China to US.
Chapter 2: How much and when you have to pay import duty from China to US?
The amount payable from China to the US as an import duty depends on the price of the commodity. Goods that have been under $800 are excluded from import duty, according to our trade policy.
That implies you do not have to pay any fee, priced at up to $800, for smaller items. But the tax on goods that are over $800 is compulsory. The amount of import duty depends on the H.S code.
The import duty from China to US also depends on the number of imputed items. The customs officer divided it into two parts. Formal entry: In order to receive clearance from the customs department, if you import anything from China and its worth is more than $2500, it really should be protected by a surety bond.
Formal Entries are considered these sorts of imports. This import would be regarded by the Customs Department as commercial since the price of the asset is high.
If the Customs Entry Bonds have already been sent to the CBP, you will collect your delivery well before submitting your import duty, fees, and taxes. Informal Entry: Those goods priced at less than $2,500 are referred to as Informal Entrants. There is no requirement for a surety bond or entrance bond to protect these items.
Those items are usually counted as an informal entry that is less than $2,500. But certain cases remain as well.
When you are expecting your shipment from the port, you can check the requirements for your goods. Mostly the textile imports are considered informal entries. But if the value of the product is $2500 or above then they are known as formal entries.
Duty-free carriage of goods is permitted under Section 321 if it is priced at a cost of up to $200. It is regarded only when importing a particular category of informal entry.
For instance, if you purchased a pair of boots for $150 from Mexico, you walk over the border to pick them up, and then there will be no customs duty on this pair of boots.
1.When you need to pay duty?
You have to pay some tax on certain goods whenever you buy or sell something from anywhere in the world. That number is referred to as customs duty.
It is necessary to pay the amount; otherwise, imports and exports are deemed illegal. When you purchase some goods from China and ship them to US then you have to pay import duty from China to US according to your product.
You can calculate your import duty from the given method. If you are importing from China to USA then you have to pay import duty to US government when you receive your goods.
Chapter 3: US import requirements
The import criteria of the US are whether you are a major business importing thousands of widgets a week or a hard-core dealer importing a rare piece through an internet purchase, anyone importing foreign goods to the USA is subject to Customs and Border Protection (CBP).
The importers and their products must take the required measures for entry and examination to receive clearance mostly from CBP.
The customs duties are, in general, an amount that is added to the taxed value of the product imported. Particular custom duties, certain papers are dutiable, but many are at variable rates.
1. Entry of goods
The owner, buyer or approved licensed authorized agent must provide an entry document for the goods while importing to US with the port director at the port. The imported goods must arrive at the port legally, the import duty must be paid by the authorized owner, and distribution of the product must be allowed by the Custom and Board Protection.
The entry document must be filled by the agent within 15 days of arrive at the entry port. The documents are given below:
• Cargo Manifest
• Proof of permission to entry
• Lists for packing, if necessary
• Commercial invoice
• Other documentation is available for the determination of the admissibility of products.
2. Examination of goods
For the CBP, national security is a major concern. Throughout the day, the CBP officer reviews many imported products to determine whether or not the items are secure for crossing the border. There is a need for inspections of products entering the USA.
They determine about:
• The goods must be marked by the origin country, the CBP officer checks it whether it is marked or not.
• Goods purchase and duty status
• Prohibited items
• Suitably invoice
• Legal narcotics
• Product quantity
It is necessary, correctly marked the imported items while import from China to US in the English language.
3. Ensuring that items are permitted to be imported in the US
While importing from China to US the Custom Board of Protection ensures that the imported goods are permitted. If the goods are not permitted then they will not allow you to receive their goods. There are different products that are prohibited to import to the United States, some of the items are given below:
• Illegal substances
• Dog fur
• Bush meat
• Religious artifacts
The CBP staff only allows the permitted products to be import from China to US. But some of the products needs extra inspection and also have higher import duty from China to US. While importing from China to US choose your product wisely, otherwise you will face problems and a heavy lose.
Chapter 4: USA import tariff rates, from China to US
The import duty from Chine to US varies from product to product. Some products have high tariff rates while some of them have low tariff rates. Five products and their tariff rates are given below which will be useful for a beginner, who want to import from China to US.
1. Import duty on LED bulb lights from China to US
China is a huge market of LED bulb production. Most of the countries in the world import LEDs from China because the purchase different LEDs parts and assemble them in their own country. US also imports from China. While importing from China to US the LED bulb’s tariff rate is different from LEDs.
LED, LED bulb, LED lamps and LED lights have different tariff rates. The tariff rate on LED bulb is 3.9% while importing from China to US. The import duty from China to US is imposed according to the tariff rate.
2. Import duty on cloths from China to US
US imports from China not only electronic items they also import cloths and other items. Before importing cloths from China to US, you must know the tariff rates of United States.
If priced at $200 and above, all imported clothes are required to pay with custom duties. The duty rate for standard clothing items is 16.5%, while for genuine garments made of wool and fur, including such as coats and jackets, this figure may be a little more costly.
Moreover, the US does not have VAT, which means that, apart from customs duties, you will not expect extra taxes.
3. Import duty on bikes from China to US
US import bikes form China, bikes are manufacturing in China and import on different countries according to the demand. The Chinese bikes are cheaper than others because due to labor cost. The labor cost in China is cheaper. The Trump’s tariffs on bikes importing from China to US increased up to 30% due to US China trade war.
However, the current import duty from China to US varies due to Bikes Company and designs. The tariff rate on bikes is now 0-10% it depends on the accessories.
4. Import duty on wristwatches from China to US
The import duty from China to US for wristwatches varies from 9.8-11% because in these items general duties and special tariff imposed. But if the special tariff rate is null then only general duties will be payable.
Import duties: 9.8-11% +$1.53 per item.
5. Import duty on peanuts from China to US
Peanuts are edible and uses two third of the total consumption of the peanuts in US. Peanuts use in different edible things such as peanut candy, peanut butter, nuts and chocolates. The tariff on peanuts is very high because US import it from other countries.
Peanut tariffs are 131.8% which are very high while importing from China to US. By following this tariff rates the actual amount of the import duty from China to US is also high.
Chapter 5: Different import duties from China to US
Import duty from China to US has been divided into different categories. These taxes depends on the products, what does the US import from China?
1. Import duty as merchandise processing Fee (MPF) from China to US
The Merchandise Processing Fee is subjected to all the imports from China to US. The Merchandise Processing Fee (MPF) depends on order vale and also has two sub-categories.
• If the imported products value is less than $2500 then it will be $2, $6, or $9 according to per shipment.
• If the imported products value is greater than $2500 then it will be 0.3464% of the actual value of the imported goods.
• The minimum Merchandise Processing Fee is $25 and the maximum is $485.
2. Import duty as harbor maintenance Fee (HMF) from China to US
Harbor Maintenance Fee (HMF) collected if the goods imported by sea. In late 80s the HMF was imposed on the importers. It is the maintenance cost of the terminals and also containers in the USA.
The HMF is currently 0.125% of the imported cargo. However, it does not affect your import duties because it is a minor amount.
3. Additional import duties
The Federal excise tax is imposed on different products in which alcohol and tobacco included. It is an additional tax, you have to pay. But for other products, there is no additional tax because US does not have VAT.
The Federal excise tax does not apply to consumer goods imported from China to the United States.
4. Customs value
HMF, MPF and custom duties are calculated according to the Free on Board (FOB) value of the goods which are imported. The following things are included:
• Product cost
• Export clearance from China
• Transportation cost which is the loading cost from China port.Mostly Chinese suppliers quote goods based on the Free on Board terms.
Chapter 6: How do you calculate import duty from China to US?
If you want to calculate the import duty from China to US, the code for those goods that you want to import, needs to be verified from HTS. Every H.S code has its duty rate, which is according to it, you have to pay the price according to the H.S code.
To measure the import duty from China to US, let’s address the measures involved.
1. Do you know about harmonized system code?
First, you should know what Harmonized System code is. What the coding is and how it can be tested?
2. What is H.S code?
H.S. stands for The Harmonized System Code. It is a global multifunctional product nomenclature established by WCO (World Customs Organization). It’s being used to find the commodity type that you are importing from different countries to US.
3. How to check H.S code?
In order to check the H.S. Product code, you can go to the official HTS website and type the question in the search box. You’ll get the results:
• Six digit code recognition code
• 5000 product categories99 Pieces
• Each chapter has 21 sections
• Arranged in a logical structure
• Well-defined Standard Classification Rules.
4. How to check import duty rates from China to US online?
Multiple websites are accessible which can be used to validate the online import duty rate. But there’s an official HTS website where you can use the product description to search the H.S, the item code and to verify the amount of import duty.
5. How to calculate import duty from China to US?
When you import anything from China to the USA and just want the import duties to be measured, you need to search the H.S code or HTS or product code of that individual product (these are all the same).
The import taxes rate for that code is then added. For that item, this tax would apply without shipping.
If a further 25 % duty rate hits your imported goods, then the costs of American products will just go up. There are three alternatives for those importers who are influenced by this tariff:
• Absorb excess expenses
• Increase consumer prices
• Switch development to a foreign nation
Chapter 7: How to pay import duties from China to US?
You have to be there with relevant records when the shipments arrive. Send these papers to U.S. Customs and Border Control as quickly as possible so you need to transfer your freight within 15 days of your arrival.
If you refused to do that, the goods will be moved to the warehouse. You will also have to pay additional storage charges. You have to pay the dues six months after the delivery of your shipment. Otherwise, these items will be sold at the auction. It’s a little difficult to clear the customs charges. You need the following papers to clear your fees.
1. Bill of lading
It is a valuable paper to ensure that the invoice has been obtained by the exporter and that the importer has his goods. That is the receiving by the carrier of the shipping of the cargo.
2. Commercial invoice
It is a collection that contains all the specifics of distribution and goods. CBP Receives custom charges on the basis of this paper.
It contained the following details
• Product Description
• Destination address in the U.S.
• Country of Origin
• Name and address company selling these Products
• Value of goods in both currencies
• Tariff Classification
3. Packing list
This list includes all the material on the invoice and the packaging details of the items. The customs officials used this list to search the package.
4. Arrival notice
This document is provided by the freight company to inform you of the arrival of your shipment.
5. Surety bond
One must ensure that charges such as customs tariffs, fines, or import fees are clear; the importer must provide the customs authority with a contract. This bond can be bought by any U.S. security firm, or you can employ a customs broker.
6. Two types of custom bonds
This bond is acceptable and more general, as the name of this bond indicates since it can be used for one year for all imports. If you want a bond that covers $50,000.00 USD, it would cost you from $400.00-$450.00. If you wish the cheaper bond to be extended, you can still purchase the bigger one.
-Single Entry Bond
When you’re an importer and import several shipments per year, such as 5-10 a year, then you can find this bond handy. It would save you only 5% of the amount of the shipment. Some of the experts also told that it will affect the import duty from China to US.
Chapter 8: Some important things you must know
1. The Operation process of the US agent import goods
A step by step process is given below:
• Receive an agent file (must include: 1+B/L, M B/L COPY + D/C NOTE) and enter a device.
• The order for the delivery of the goods to SSL or CO-LO is initiated one week before the arrival of the product, so the port OP should write the date of delivery to the D/C Note, which allows the US agent to verify the date of delivery in time.
• After reception of the delivery notice via SSL or CO-LO, enter the device and send it to C/and their customs broker (if known).
• Collect the original shipping or sea freight bill submitted by C/or customs broker. Quickly use the transporter or courier to send the freight and the original bill of lading that we need to pay to SSL or CO-LO. This commonly starts within 24 hours. If there is an IC, please give it to SSL or FAX.
• After issuance of the bill of lading and the charge, SSL will reach the computer to release the products. When sent to CO-LOADER, they will repeat (above D) and transfer it to SSL for distribution. As a result, the CO-LO goods will be shipped one day to a day or so.
• Moving inland products, following the goods itinerary before PICK UP # after FAX to C/
• Give D.O. after arrival. (DELIVERY ORDER) to the transport company and call the harvesting warehouse before verification, some C/need POD, then get it from the truck to C/.
• The SOC tracking box shall also be returned to the assigned yard (requires C/sign-in verification at the date of shipment).
2. AMS IC and VSSL ARRIVAL
VSSL ARRIVAL: Inform the Customs Office the same day that the ship reaches at the destination port. This is determined from the current port of entry, not considering whether it reached at the last port.
AMS IC: The AMS device will instantly view the IC, showing customs clearance, when customs clearance is issued. It is possible to declare nearly all items to the port until the ship reaches.
While many inland items are used as PRE-CLEAR, after ARRIVAL I.T., the shipping service must know when to allow it. Most NVOCCs neglect ARRIVAL I.T. after doing AMS. That results in products that are not issued after customs clearance.
3. Customs fines
If the import taxes are not charged on deadline, a fine will be applied by the customs authority and interest will be collected. The products must be reported to the customs authority within 15 days. If no one has yet to return to the customs office after 15 days, the customs office will challenge the security of the goods and move the goods to the supervisory warehouse (GO WAREHOUSE) for inspection of the shipment.
The customs clearance needs to be cleared during that period by the supervision number (GONO). The following expenses would be borne as the goods enter the supervisory warehouse (G..O.WHSE-General Order).
• The cabinet fee and returning cabinet fee
• Demurrage fee or railway Demurrage fee.
• Warehouse storage fee per Container costs.
• The Warehouse decommissioning fee and loading fee.
Just pay these payments and pay the delivery charge to the shipping company to collect the goods in return for the LIEN note. If the items are not approved during six months, they will be seized by the customs and then auctioned to collateralize the cost of storage.
4. Free Storage period for docks
Many docks have a storage time of five days (from the time the container is hoisted from the ship, starting from the time of picking up). Remember that after a spare time, you have to pay a storage charge for holidays and weekends. Rickmers’ dock in Houston has a free duration of just three days.
1. Demurrage fees
No matter where the products come from, you will generally be paid $60 every day for the first five days of the port, preceded by $120 a day. After all, some ports, like HANJIN, COSCO, have a late demolition charge of $100 per day per CTNR.
The delivery company and the dock are separate businesses. Demurrage penalties can occur when there are no persons to pick up the load for longer than five days.
If it is the liability of the shipping company, the shipping company will be paid to the port in compliance with the arrangement. If the shipping company cannot bear this, the terminal will cost the extraction system.
Chapter 9: How to avoid import duties from China to US
It doesn’t matter that you are buying from China a large or small number of items, form many people the import duty from China to US will be a great burden. They will try as many ways as possible to prevent or minimize tax during business purchases. Below are some of the most common approaches we’ve seen.
There are some conditions where there is some relief in paying import duty from China to US, which includes
1. Personal Exemption
There is a duty-free allowance, or personal exemption, as per the CBP, which is the net amount of products that you may return to the United States before having to pay duty. The personal exemption is $800 in certain situations, although there are restrictions to the number of alcoholic drinks, cigarettes, cigars, and other tobacco items that you can use in your personal duty-free exemption.
Samples are also an example since the samples are with your own use and it will not be sold back for business reasons, one can request his supplier to place samples at a nominal value of $1 and to say on the Sample invoice “Sample of No Commercial Value.”
Because the goods are shipped straight from a third party (manufacturer or wholesaler) to the consumer via ePacket or China Postal Package in the drop shipping sector, there is no Import duty from China to US on the goods furthermore, the seller will have to pay those taxes.
Chapter 10: How to reduce import duties from China to US
While some people prefer to use the strategies below to minimize import duty from China to US, we would not recommend that you like them, taking into account the risks involved.
1. Reducing product value on the commercial invoice
Provided that a certain amount is dependent on the formula for determining the customs duty, reducing the declared value is one reasonable option to minimize the import tax. Any suppliers will effectively guide a cheaper value on the goods, as negotiated with the importer, to help the customer reduce the customs duty.
Even so, if the U.S. customs discover that the stated price is smaller than the real value and is deliberately reduced, a penalty tax would be levied on the customs, and even worse, the products may either be lost or returned to the loading port.
2. Several Batches Delivery by International Mail
As goods valued at more than $2,500 are imported, official entry will be required. They will ask a few importers to deliver the supplier through the international postal service and differentiate the shipment into several lots, each of which is less than $800.
Be careful, however, and think very carefully before actually doing this. Only goods associated travelers may be covered by the personal exemption. The exemption would not be allowed if the U.S. customs identify your conduct is intentionally adjusted to prevent tax. But at the other hand, the total cost of shipping by express, can also be significant.
3. Through Entrepot Trade
There is a burden of an increased 25% tariff policy targeting importation; some consider transporting goods to a third country and then exporting them to the USA with the help of a third country as their place of origin, rather than China, in order to avoid rising import duty from China to US. There are also numerous risks inherent in the system and final transformation costs can still arise.
Chapter 11: FAQ about import taxes from China to the USA
1. What are the import taxes from China to the USA?
China is a huge market of goods production and the import duty from China to the US is a highly concerned topic. There are different taxes you have to pay. The tax rate is according to the product imported from China to the US.
US tariff on China imports varies from product to product. The import duty from China to US is calculated and the calculation method is given above. You can read it and calculate the import duty from China to US according to your product you want to import.
2. What is the effect of high tariffs in USA on imports from China?
The high tariff rates on the import by US government are hurting both countries. Trump’s tariff rate imposed on the buyers and it also felt by the US population. But China reduced the cost price of the product to absorb the high tariff rates. US is a selling market due to Amazon, it’s worth is about $1.7 trillion.
The import duty from China to US on cloths, peanuts, wristwatches, bikes and LEDs is mentioned above. On peanut, it is 131.8% while on cloths it is 16.5%, if this tariff rate decrease then trade will be automatically increased. It is also helpful for the consumers. The tariff rate should be low which is beneficial for both countries.
3. How to calculate import duty on your product for USA?
The import duty from China to US is calculated by using Harmonized System code. You can check the H.S code of the product and every H.S code has it tariff rates. You will pay according to you H.S code. If you want to calculate the US tariff on China imports, the detailed guideline is given above.
You can also check your import duty from China to US online from the official website HTS. You can type product name and find the H.S code, from H.S code one can easily find the import duty from China to US.
After reading all such details and descriptions, you may feel that the entire process of importing is too difficult and complex.
Hiring a procurement agent or customs broker, though, will complete the shipment process without any difficulty. Such agents are experienced and well-trained people and have a good knowledge of the import process. Based on their services, they will bill you.
Ultimately, a few things should be kept in view when shipping from China. You need to ensure that CBP is correctly declared for all goods. So, with the customs authority, you should not get into any difficulty.
You need to pay tax for hassle-free shipping if you import anything from China to the US. You must send those papers to the customs authority when you obtain the paperwork of your distribution from the seller. You can spare yourself from fees, taxes, and late fillings when you do this properly.
Paying the import duty from China to US at the proper time will save you from being penalized. So, to make the whole process seamless and quick, recruit any customs agent or sourcing agent.