Tariffs vs. Fentanyl: US Slaps Duties on China to Fight Opioids
Published Date: 2/5/2025
Notice
Summary
Starting February 4, 2025, the U.S. is adding extra taxes on certain products from China to fight the flow of synthetic opioids linked to criminal groups there. This move follows the President’s national emergency declaration about drug threats and aims to protect America’s safety and economy. Importers of affected Chinese goods will see these new duties in action right away.
Analyzed Economic Effects
6 provisions identified: 2 benefits, 4 costs, 0 mixed.
Extra 10% Duty on China Imports
Starting February 4, 2025, imports that are products of the People's Republic of China (including Hong Kong) are subject to an additional 10 percent ad valorem duty under new HTSUS heading 9903.01.20. This 10% duty applies in addition to all other applicable duties, taxes, fees, and charges.
No De Minimis — Formal Entry for China Mail
CBP will not allow duty-free de minimis treatment for articles from China subject to the additional 10% duty, and all mail shipments from China will require formal entry regardless of their value. CBP states no mail shipments from China will be cleared or released unless formal entry is properly filed.
No Drawback; Additional Duties Stack
The new 10% ad valorem duty is imposed in addition to other duties and charges and no drawback (refund) is available with respect to this additional duty. Also, products that qualify for temporary duty exemptions or reductions under subchapter II to chapter 99 remain subject to the additional 10% duty.
Foreign-Trade Zones and Chapter 98 Rules Changed
Products of China admitted into U.S. foreign-trade zones on or after 12:01 a.m. eastern standard time on February 4, 2025 must be admitted as 'privileged foreign status' and will be subject to the additional duties upon entry for consumption. Goods properly claimed under chapter 98 entries are not subject to the additional duty except certain 9802 subheadings (9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80), where duties apply to the value of processing or assembled value as described.
Short Transit Exception Window
Goods that were loaded onto a vessel or in transit on their final mode of transport before 12:01 a.m. eastern standard time on February 1, 2025, and entered for consumption or withdrawn from warehouse on or after 12:01 a.m. eastern standard time on February 4, 2025 but before 12:01 a.m. eastern standard time on March 7, 2025, are exempt from the additional 10% duty if the importer certifies eligibility under new HTSUS heading 9903.01.23. This exception is time-limited and requires the importer to declare the special heading as described in the annex.
Humanitarian and Info Materials Exempted
Donations of articles intended to relieve human suffering (food, clothing, medicine) and informational materials (publications, films, CDs, artworks, news wire feeds) from China and Hong Kong are not subject to the additional 10% duty and are covered by new HTSUS headings 9903.01.21 and 9903.01.22. These exclusions remain subject to the conditions described in the new U.S. notes in the annex.
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