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Phillip Moorman

Yesterday a freight forwarding partner, Flexport, reported that the U.S. started hiking tariffs on Chinese goods from 10% to 25% without any formal notice from the U.S. Trade Representative. Customs Brokers prepared Harmonized Tariff Schedule (HTS) entries on Chinese goods through Customs and Border Patrol (CBP) and noticed a 25% tariff was included on goods arriving May 10th or later.

Large and small businesses could be impacted greatly by the preemptive hike in tariffs depending on the HTS codes used to identify their products. Without an official announcement many companies may not be able to make adjustments in time to protect their margins.

On May 6th, the U.S. Trade Representative, announced that plans were being made to increase tariffs on goods subject to Tranche 3 of the China 301 Tariffs from 10% to 25% on May 10th and later. However, due to a lack of an official notice posted in the Federal Register, many companies will undoubtedly be caught by surprise.

The Tweet Heard Around the World

On May 5th, President Trump posted a tweet threatening that tariffs on Chinese goods were to increase from 10% to 25% on May 10th. However, there is an official process that typically must be conducted before changes can be made to the HTS. It appears that this process has been bypassed.

According to Politico, half of the $505B in Chinese goods the U.S. receives will be hit with a 25% tariff and furthermore Donald Trump has signaled that as much as $325B worth of goods may soon see the increase as well. Many American companies will immediately see drastic cuts to their margins unless they quickly pass the costs onto their customers.

Please stay tuned as we continually update this article as we receive more information.

Avoid the Tariffs, Move Your Production to Vietnam

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