China's Opioid Chemists Hit with U.S. Import Duties Now
Published Date: 2/7/2025
Presidential Document
Summary
The U.S. is slapping new duties on chemicals from China that help make deadly synthetic opioids like fentanyl. This move targets Chinese companies and criminal groups hiding illegal drugs in regular shipments, aiming to cut off the flow that’s killing tens of thousands of Americans every year. These changes kick in soon and could impact trade and prices for certain imports.
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Analyzed Economic Effects
6 provisions identified: 0 benefits, 5 costs, 1 mixed.
10% Tariff on All PRC Products
The President ordered an additional 10 percent ad valorem duty on all articles that are products of the People’s Republic of China. This additional 10% duty applies to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern time on February 4, 2025.
No De Minimis or Drawback Allowed
The order says duty-free de minimis treatment under 19 U.S.C. 1321 will not be available for the covered PRC articles, and no drawback shall be available for the duties imposed by this order. These rules apply to articles subject to the additional duties on or after February 4, 2025.
Foreign Trade Zone Admission Rules Changed
Articles that are products of the PRC and subject to these duties and admitted into a U.S. foreign trade zone on or after 12:01 a.m. eastern time on February 4, 2025 must be admitted as "privileged foreign status" under 19 CFR 146.41. Such articles will be subject, upon entry for consumption, to the rates of duty related to their HTSUS classification at the time of admittance.
Tariff Duration and Potential Escalation Risk
The order states the additional duties will continue in effect until expressly reduced, modified, or terminated, and the President may increase or expand the duties if the PRC retaliates. The Secretary of Homeland Security will report and inform the President on PRC actions; removal requires Presidential determination that the PRC took sufficient steps.
Narrow Transit/Loading Exception with Certification
Goods entered for consumption after 12:01 a.m. eastern time on February 4, 2025 are generally subject to the new duty, but goods that were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. eastern time on February 1, 2025 are not subject to the additional duty if the importer certifies to U.S. Customs and Border Protection as specified in the Federal Register notice.
HTSUS Modifications and Federal Notice
The Secretary of Homeland Security will determine and publish modifications to the Harmonized Tariff Schedule of the United States (HTSUS) in the Federal Register to implement the duties described in this order. Those HTSUS modifications are effective for goods entered on or after 12:01 a.m. eastern time on February 4, 2025.
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