New Tariff Increases on Imports from China: What You Need to Know

On May 22, 2024, the Office of the U.S. Trade Representative (USTR) unveiled significant changes to the tariffs imposed on Chinese imports under Section 301 of the Trade Act of 1974. This move, driven by the Biden Administration, targets $18 billion in imports from China and aims to address ongoing concerns related to technology transfer, intellectual property, and innovation. The new tariffs will take effect on August 1, 2024, with subsequent increases scheduled for January 1, 2025, and January 1, 2026.

Key Tariff Increases

The revised tariffs will impact several critical U.S. industries, particularly those where China has been expanding its production capacity. Here’s a breakdown of the notable changes:

Steel and Aluminum

Tariffs on certain steel and aluminum products will rise from the current range of 0-7.5% to a hefty 25% starting August 1, 2024. This affects products within Chapters 72, 73, and 76 of the Harmonized Tariff Schedule of the United States (HTSUS), including steel bars, beams, wire, and aluminum bars, wire, and foil.

Solar Cells

The tariff rate for solar cells, whether or not assembled into modules, will jump from 25% to 50% on August 1, 2024. This includes goods classified under HTSUS subheadings 8541.42.00 and 8541.43.00.

Semiconductors

Starting January 1, 2025, tariffs on semiconductors and related components such as diodes, transistors, and electronic integrated circuits will increase from 25% to 50%.

Electric Vehicles (EVs)

Fully electric and certain hybrid passenger vehicles will see their tariff rate surge from 25% to 100% on August 1, 2024. This includes vehicles that can be charged through an external power source.

Batteries

Tariffs on lithium-ion batteries used in hybrid and fully electric vehicles will rise from 7.5% to 25% on August 1, 2024. Other lithium-ion batteries will face the same increase starting January 1, 2026. Parts of rechargeable lead-acid batteries will also see a tariff increase from 7.5% to 25%.

Critical Minerals for Batteries

Tariffs on natural graphite and permanent magnets will increase from zero to 25% on January 1, 2026. Other critical minerals like manganese, cobalt, aluminum, tungsten-related products, and certain ferroalloys will experience the same hike on August 1, 2024.

Medical Products

Significant tariff increases will apply to various medical products:

Facemasks: Tariffs will rise from 7.5% to 25% on August 1, 2024.
Syringes and Needles: The rate will jump from 0% to 50% on the same date.
Medical and Surgical Gloves: Tariffs will increase from 7.5% to 25% on January 1, 2026.

Ship-to-shore Gantry Cranes

Products under HTSUS subheading 8426.19.00 will see tariffs rise from zero to 25% starting August 1, 2024.

Exclusion Process for Machinery

The USTR notice also outlines a proposed duty exclusion process for machinery used in domestic production operations. This includes solar manufacturing machinery, with exclusions effective from the publication date of the notice. The USTR is seeking public comments on the proposed tariff increases and the scope of the machinery exclusions, with a deadline for submissions set for June 28, 2024. You can read the full details of the proposed modifications and the exclusion process in the official USTR notice.

Impact and Next Steps

These tariff increases are poised to affect numerous industries and importers relying on Chinese goods. It’s crucial for businesses to review the specific HTSUS codes impacted and assess the potential cost implications. Stakeholders are encouraged to participate in the public comment process to express concerns or support for the proposed changes.

For those in the industries affected, A & A Customs Brokers can provide comprehensive support in navigating these new tariffs and exploring options for duty exclusions. Our expert team is ready to assist you in understanding these changes and ensuring compliance with the updated regulations.

Stay Informed with A & A Customs Brokers

If you have any questions or need assistance with your customs and trade compliance needs, please don’t hesitate to contact A & A Customs Brokers. We are here to help you manage the complexities of international trade and keep your business running smoothly.

This blog will be updated with any new information or tariff changes. Stay informed about the latest trade developments with our blogs. Follow us for regular updates!