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From China to the U.S – Import Tax Explained in 2022

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(Last Updated On: 2022年5月10日)

Anything imported into the U.S. that has a value equal to or surpassing $800 has to go through custom or import duties. Basically import duties are the tax an importer needs to pay to the customs of the US. In the following article we will explain what exactly you need to know and what to avoid in order to navigate in the trade war between China and the U.S.

What Import Tax do You Need to Pay for Imports from China to the USA?

The rate of tax is decided based on the estimated value of goods. This is in accordance with the Harmonized Systems (HS) code of the item and the country it is coming from. There are further, but fairly small extra taxes. For example: Merchandising Processing Fee (MPF) and Federal Excise Tax (FET).

Whether it is a formal or informal entry of your goods, you must pay an MPF fee after imports. The amount is 0.3464% of the imported item’s value, which is ad valorem based. However there is a minimum and maximum fee that needs to be paid even though it is value based. This number is between $26.22 and $508.70. There is also a 0.125% ad valorem fee for Harbor Maintenance Fee (HMF), which of course only applies if you import your goods by sea.

How much Customs Duty Will You Pay? Are Your Products Included in the 25% Tariff List?

At the moment, as part of the US-China trade war, adding an extra 25% tariff on Chinese imports has gone through several stages. Two of these targets, the Made in China 2025 initiative, focusing on imports with a value surpassing $50 billion. Certain goods like technological equipment aiding the manufacturing of food or textiles will be given a 25% fee in tariff as a consequence. A product of China can be matched with a tariff number, if the person bringing the goods looks up HTS9903.88.01 or 9903.88.02. The next stage includes the list covering goods of $200 billion. This includes chemical, construction, food and other consumer products among others. These products can be matched with their special tariff number if you look up HTS 9903.88.04 or 9903.88.03.

All remaining types of imports from China belong to a 4th list. These are covering the ones that surpass the value of $300 billion and extra duties will have to be paid after them. This lengthier list includes the following:

  • Animals such as bird or insects for instance
  • Precious metals and jewelry 
  • Chemicals & raw materials
  • Textiles & footwear
  • Food products such as: dairy, meet or alcohol
  • Household electronics
  • Vehicles 
  • Artwork
  • Books
  • Toiletries and grooming items
  • Waste materials
  • Weapons 

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How To Calculate The u.s. import tax - A Step by Step Guide

The following section of the article is very useful if you need to calculate the right import tax for your goods. The next 4 steps will give you the right answers you need to get your taxes under control nice and easy.

Step 1: Understand H.S Codes And How to Check Them

H.S code and HTS (Harmonized Tariff Schedule) will determine the rate of tariff that you will have to pay after everything imported into the United States. That is why it is important to take a minute to understand what these terms really mean. To explain it very simply: HTS identifies the rate of tariff after every single item brought to the US. This is based on the H.S code and the country the goods are coming from.

HS or International Harmonized System is managed by World Customs Organization (WCO). In every country the first 6 digits of HS code, belonging to a type of product, are the same. Then these digits are extended by the HTS (import) and schedule B classification systems (export) to 10 digits. If you have a product name and you need to obtain the corresponding H.S code you can do one the three following simple steps to get the information:

    •  H.S Code Lookup Tool
      • Simply do a search using the lookup tool of the H.S codes. Do this by selecting the exact type of product within the right category. This will lead you right to the 6 digits you need. 
  • Use USITC
      • Search for the right items’ keyword (eg. t-shirt) on USITC. Just scroll down to the right item and select the definition best describing your product. This will give you the H.S code and the tariff rate as well.
  • Check With A Customs Broker Or Freight Deliverer 
    • In case you have issues with finding the right product, you can always check with your customs broker or with your freight deliverer.

Step 2: Know How to Check Import Duty Rate Online 

Identifying the right category in HTS can be tricky. If you do it wrong, that could end up quite an expensive mistake. You can always get a rough idea of your goods’ category through your own research. However the U.S Customs and Border Protections makes the ultimate decision about what the right rate of your tariff will be.

The following 3 ways can be useful in helping you self-check your rate online:

  • Ackwire the newest information on tariff rates on the USITC website.
  • Type in the H.S code you get (eg. 5303.17.1000) on the search panel of the website.
  • Get in touch with a customs broker if you need information on tariff that is more specific.

Step 3: Know How to Calculate Import Tax 

In order to calculate the right import tax, add up the insurance, cargo expenses, the value of the imported products and then multiply it by the tariff rate. The number you get is the right fee you have to pay for customs after your imported goods.

Step 4: Know if Your Product is Hit with Another 25% Duty Rate 

After the previous steps you know how to check your fees on USITC. However you need to be sure to check if you were charged with an additional 25% rate. This could happen because of the trade war, as it had radical influence on imported goods. To be absolutely certain of what applies to you, check for 2019 HTS Revision and see if your CBP or customs broker has more information about your customs duty.

How to Pay u s import tax?

Import tax is paid for the U.S Customs and Border Protection. However you don’t need to worry about conducting this complex process. You have the option to hire the service of a local customs broker to help you arrange all the necessary documents for identifying the goods when they are delivered to their destination. 

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Common Ways to Avoid or Reduce Import Tax?

You can buy large or small amounts of goods. Regardless, import tax can still be difficult to wrap your head around. Allow us to list a few ways to reduce your taxes. Below are some often used methods:

Exceptions When No Duties Are Paid

There are circumstances under which you do not need to pay import tax. Here three of the common reasons you could be exempt:

  • Personal exemption – CBP’s rule is that you can bring in goods valued equal or under $800. (e.g tobacco, alcohol) with limitations to the exact number of these items. This is also called the duty-free exemption
  • Samples – Samples are for your own personal use and will not be resold with commercial purposes. This is another exemption.
  • Dropshipping – The goods are delivered through a third party and only sales and income tax has to be paid by the vendor

Common Ways to Reduce Import Duty 

The below methods are also often used, however they come with risks. Do use them only if you are clear with the risks they might come with:

  • Decreasing value on the invoice – some suppliers are keen to help by putting a lower price at the imported goods. This will result in lower customs duty. Though this comes with a high risk. If U.S customs figures out that the value is reduced on purpose they can fine you or even destroy the goods.
  • Separating the shipment into several deliveries – This could apply for instance if the value of each delivery would not surpass the before mentioned $800. In that case the individual delivering the goods could still be caught based upon suspicious behaviour. Afterward they would be prohibited from repeating the same delivery again.
  • Intermediate trade – Under the current pressure many people consider using a third country as the country of origin before transporting the goods to the U.S. There are many risks involved of course, and potentially increased transport costs.

How much can you send to US without paying duty?

Normally if value below 800USD, no need pay tax

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