New China Tariffs Target Fentanyl Flow via Prez Executive Order
Published Date: 2/12/2025
Notice
Summary
Starting February 5, 2025, the U.S. is adding extra taxes on certain products from China to fight the flow of synthetic opioids. This change affects importers bringing in goods from China, with new rules on which items get taxed and how small shipments are treated. The goal? To cut off the supply chain and protect American communities from dangerous drugs.
Analyzed Economic Effects
6 provisions identified: 2 benefits, 4 costs, 0 mixed.
10% Extra Tariff on China/Hong Kong Imports
Starting February 5, 2025, most goods that are products of the People’s Republic of China (including Hong Kong) will be charged an additional 10% ad valorem duty under new HTSUS heading 9903.01.20. This 10% duty is applied on top of any other applicable duties, taxes, fees, or charges.
De Minimis Exemption May Be Suspended
Articles of China/Hong Kong covered by heading 9903.01.20 that otherwise qualify for the de minimis (administrative) exemption at 19 U.S.C. 1321(a)(2)(C) can continue to use de minimis entry until the Secretary of Commerce (in consultation with the Secretary of the Treasury) notifies the President that systems are in place to process and collect the tariffs. The notice states there will be no retroactive application for shipments that would have otherwise qualified for de minimis treatment as of February 10, 2025.
No Drawback Allowed on Additional Duties
The notice states that no drawback (a refund of duties on exported goods) shall be available with respect to the additional duties imposed under the Executive order (the duties in heading 9903.01.20).
Foreign Trade Zone Admissions Subject to Duties
Products of China/Hong Kong admitted into a U.S. foreign trade zone 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, upon entry for consumption, to the additional duties imposed by the Executive order and the rates of duty based on classification at the time of zone admission.
Time-Limited Transit Exception for In-Transit Shipments
Goods of China/Hong Kong that were loaded onto a vessel at the port of loading, or in transit on the final mode of transport before 12:01 a.m. eastern standard time on February 1, 2025, and that are entered for consumption (or withdrawn from warehouse for consumption) on or after 12:01 a.m. eastern standard time on February 4, 2025 and before 12:01 a.m. eastern standard time on March 7, 2025, are not subject to the additional duty if the importer certifies eligibility and declares new HTSUS heading 9903.01.23.
Humanitarian Donations and Informational Materials Exempt
Donations of articles such as food, clothing, and medicine from China/Hong Kong by persons subject to U.S. jurisdiction (covered in new heading 9903.01.21) and informational materials (covered in new heading 9903.01.22) are not subject to the additional 10% duty under heading 9903.01.20. Personal-use articles in accompanied baggage are also excluded from the additional duty.
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