The United States Announces Implementation Details of the 10% Tariff Increase, Including Exemption Policies!

According to the Federal Register of the United States, effective February 4, 2025 (local time), all goods originating from China and Hong Kong that are imported for consumption or withdrawn from warehouses for consumption in the U.S. will be subject to an additional tariff of 10% under the new regulations.

Except for specific exemption categories, all products from China and Hong Kong, regardless of their value, will no longer qualify for the “de minimis duty exemption” under 19 U.S. Code § 1321(a)(2)(C).

The following are the detailed implementation guidelines:

Main Tariff Categories

Tariff Rate: An additional 10% ad valorem tariff will be imposed on top of existing tariffs, including anti-dumping (AD) and countervailing duties (CVD). This means that goods previously subject to a 25% tariff will now face a 35% total tariff.

Scope of Application: The additional tariff applies to all goods originating from China and Hong Kong, except for the exempted categories listed below and personal belongings carried by travelers.

Exempted Categories

Exemption Categories Eligible for Additional Tariff Waivers

The following three categories of goods may apply for an exemption from the additional 10% tariff, provided they are declared under the specified Harmonized Tariff Schedule (HTSUS) codes:

1. HTSUS 9903.01.21 – Humanitarian Aid Donations
   • Includes donated goods such as food, clothing, and pharmaceuticals intended for humanitarian relief.
   • Importers must ensure proper classification to distinguish between humanitarian goods (9903.01.21) and regular goods (9903.01.20) to avoid customs delays or penalties.
2. HTSUS 9903.01.22 – Informational Materials
   • Covers materials including publications, films, audiovisual works, and news media content.
3. HTSUS 9903.01.23 – Pre-Shipped Goods Meeting Specific Conditions
   • To qualify, goods must meet both of the following conditions:
     • Shipped on or before February 1, 2025, or in the final stage of transportation.
     • Entered the U.S. for consumption between February 4 and March 7, 2025.
   • Key Compliance Note:
     • Only shipments that departed before February 1 and arrive by March 7 are eligible for exemption.
     • Exporters failing to adjust shipping schedules accordingly may face overstock risks or non-compliance penalties.

Special Provisions & Exceptions

1. Chapter 98 Goods Exception

Goods declared under Chapter 98 of the U.S. Harmonized Tariff Schedule (HTSUS) (such as re-exported processed goods and temporary imports) are generally exempt from the additional 10% tariff. However, the following subcategories are excluded from this exemption:

• HTSUS 9802.00.40 – U.S. goods exported for repair or improvement abroad.
• HTSUS 9802.00.50 – U.S. metal products processed overseas.
• HTSUS 9802.00.60 – U.S. components assembled abroad.
• HTSUS 9802.00.80 – Foreign-assembled goods incorporating U.S. parts.

Exception Rule:

For the above excluded subcategories, the 10% additional tariff applies only to the value added during processing, assembly, or modification performed in China or Hong Kong.

2. Foreign Trade Zone (FTZ) Regulations

• Effective February 4, 2025, goods originating from China and Hong Kong that enter U.S. Foreign Trade Zones (FTZs) must be declared under “Privileged Foreign Status” (PFS) unless they qualify as “Domestic Status” under FTZ regulations.
• Such goods will be subject to the additional 10% tariff at the time of final consumption entry into the U.S. market, based on the applicable duty rate at that time.

3. Elimination of the De Minimis Exemption

• As of February 4, 2025, goods originating from China and Hong Kong will no longer qualify for the $800 de minimis duty exemption under U.S. customs regulations.
• Importers must file formal customs entries and pay full duties regardless of shipment value. Failure to do so will result in customs clearance denial.

Advisory for Shippers & Importers

• Review in-transit shipments to ensure compliance with exemption criteria.
• Monitor regulatory updates on tariff adjustments and exemptions.
• Plan shipments strategically to mitigate potential tax impacts and clearance delays.