De Minimis Imports to the US, New Tariffs, and Evolving Global Trade Landscape
Navigating Changes in De Minimis Imports to the US
Online merchants and customs brokers selling to US consumers have been granted a temporary reprieve by the US Customs & Border Protection (CBP) regarding the advance submission of shipment data. However, looming legislative measures are set to impact de minimis imports, particularly for Chinese sellers. Proposed bills in Congress aim to target shipments below the de minimis threshold of $800, potentially impacting the exemption on duties. The CBP has postponed the implementation of the data submission requirements to allow for further testing of the data programs. Additionally, legislative proposals seek to lower value thresholds for shipments with trade partners and strengthen enforcement activities of the CBP.
Highlights:
- US Customs & Border Protection postpones mandate for advance submission of shipment data, providing a reprieve for online merchants and customs brokers.
- Proposed bills in Congress target de minimis imports below the $800 threshold, potentially impacting duty exemptions.
- CBP is working on integrating the advance submission program into its Automated Commercial Environment (ACE) to enhance enforcement and identification of non-compliant shipments.
- Legislative proposals aim to lower value thresholds for shipments with trade partners and strengthen enforcement activities of the CBP.
Navigating the Evolving Global Trade Landscape
In recent times, supply chain managers have been facing geopolitical risks that are resulting in a shift from traditional sourcing and transportation decision-making. Single-country or regional suppliers like China are facing obstacles such as higher tariffs coupled with a possible war over Taiwan, incentivizing firms to look for alternative providers. Rising shipping costs and international tensions with Russia and Iran have also caused suppliers to consider other countries like Poland or Romania. Compliance and regulations from the US and EU are also creating numerous obstacles and placing supply chain managers in a position to monitor ever-evolving regulatory environments.
Highlights:
- Potential war over Taiwan and higher tariffs are leading firms to shift away from traditional country or regional suppliers like China and look for reliable alternative providers.
- International tensions with Russia and Iran are limiting supply chains and causing suppliers to consider countries like Poland or Romania, which have higher labor costs but fewer geopolitical hurdles.
- Compliance with US and EU regulations is causing problems, like the recent Volkswagen shipment detainment as blacklisted suppliers from China’s Xinjiang region provided magnetic components manufactured with Uyghur forced labor.
- With President Biden and former President Trump in agreement about imposing tariffs on vital Chinese imports, supply chains restructuring will likely continue for years to come.
Biden Administration Set to Impose New Tariffs on China, Impacting EVs, Solar, and Medical Supplies
The Biden administration is expected to announce new tariffs on China, targeting sectors such as electric vehicles (EVs), medical supplies, and solar equipment. The tariffs are part of President Biden’s tough-on-China approach and are aimed at protecting the US against supply shortages seen during the pandemic. The impact on the Chinese EV industry is expected to be limited, as very few Chinese automakers currently export EVs to the United States. However, the solar industry, which heavily relies on Chinese manufacturing, may be affected, although the extent will depend on the details of the tariffs. Additionally, Chinese-made medical supplies face additional tariffs, affecting a significant portion of China’s overall exports of medical goods to the US.
Highlights:
- The Biden administration is set to announce new tariffs on China, targeting sectors including EVs, medical supplies, and solar equipment.
- The impact on the Chinese EV industry is expected to be minimal, as only a few Chinese automakers export EVs to the US.
- China’s solar industry, which accounts for over 80% of global solar panel manufacturing, may be impacted by the tariffs.
- Chinese-made medical supplies, amounting to about one-fifth of China’s medical goods exports to the US, will also face additional tariffs.
