Ultimate Guides | Tips for Shipping Freight
Ultimate Guide: Import Taxes, Duties & Fees from China to the US

Ultimate Guide: Import Taxes, Duties & Fees from China to the US

Avoid nasty surprises when it comes to duties and taxes on your imports from China. Learn all the fees involved and how to calculate how much you'll pay.

8 mins, 22 September 2022

Importing goods from China to the US can leave an importer scratching their head wondering just how much their tax bill will end up being at the end of it all. Use this guide to help you avoid any nasty surprises when it comes to import duties and taxes on your products from China. 

In this post, we’ll be covering the items below:

What costs are involved when importing from China to the US?

Whether you’re looking at a formal (goods valued at more than $2,500) or informal (goods valued at less than $2,500) entry, the US Customs and Border Protection (CBP) agency will definitely charge some fees.  Listed below are some of the costs you may be expected to pay.

Import Duty

This will make up the largest part of your import tax.  You are expected to pay import duties on goods valued at more than $799.  The duty rates can be specific, like charging 19.8¢ per liter, or they can be calculated according to the estimated value of the goods, like charging 3.2% of $7,000 (the value of the goods). This will depend on the HS codes of the goods. There are also extra but relatively small import taxes and fees, which we’ll look at below. 

Federal Excise Tax

This special tax is charged on specific items like tobacco and alcohol.  If you don’t have those items in your shipment, you won’t be called upon to pay this fee.  The import duty from China to the US is usually the general import duty plus the extra tariff.  Below are the other import costs you will be liable for.

Merchandising Processing Fee

This is a type of user fee. It applies to nearly all imports.  The Merchandising Processing Fee (MPF) is a set amount for informal entries and can be $2.00, $6.00, or $9.00 per shipment.  For formal entries, MPF is calculated at 0.3464% of the stated value of the goods, ranging from a minimum of $27.20 to a maximum of $528.33.

Harbor Maintenance Fee

This fee only applies to goods shipped by ocean freight and not by air. The Harbor Maintenance Fee (HMF) charges 0.125% of the total value of the goods.

Here’s a table showing the different fees applicable for different types of imports. Note this is for general cargo, not including particular items such as alcohol or tobacco.

Value of Goods Shipping Method Import Tax
< US$ 800 Sea Freight MPF (informal entry) + HMF
< US$ 800 Air Freight MPF (informal entry)
US$ 800 - US$ 2,500 Sea Freight Import Duty + MPF (informal entry) + HMF
US$ 800 - US$ 2,500 Air Freight Import Duty + MPF (informal entry)
> - US$ 2,500 Sea Freight Import Duty + MPF (informal entry) + HMF
> - US$ 2,500 Air Freight Import Duty + MPF (informal entry)

What is the extra customs duty tariff for Chinese imports? 

Since President Trump raised tariffs on Chinese imports, you may be unsure whether your goods are subject to the additional 25% tariff.  You may also wonder whether or not you can still carry the costs of importing from China or whether you should find another source.  The good news is that the US is considering lowering tariffs on some Chinese products.  Let’s dive in and explore the additional tariff lists.

Additional Tariff List 1 & 2

To date, the additional 25% tariff lists have moved through three different stages.  The first two lists call for an extra 25% tariff on an estimated $50 billion in Chinese imports and target goods central to the Made in China 2025 initiative.

As a result, all products, such as machinery, electronics, and technological parts used to manufacture the likes of food, and textiles will be charged the 25% tariff. You can search for HTS 9903.88.01 or 9903.88.02 for a special tariff rate for goods from China.

Additional Tariff List 3

This list collects a further 25% tariff on $200 billion in imported Chinese goods.  Examples of what’s covered under this list is: 

  • Tools
  • Food
  • Chemical and construction materials
  • Consumer and agricultural products
  • Commercial electronics
  • Vehicle parts

You can search for HTS 9903.88.03 or 9903.88.04 for a special tariff rate for products from China.

Additional Tariff List 4

This imposed 25% duties on a further $300 billion of China imports, essentially all of the remaining US imports from China.  However, after the “phase one” agreement between the US and China was signed, List 4 tariffs were lowered to 7.5%.

How to check your tariff

Step 1: Check HS and HTS codes

Before you check the rate, you need to know about HS and HTS codes.  The HS code is a standardized and globally employed method of classifying internationally traded goods.  Each HS code represents one product category.

The first six digits of the HS code are used internationally, and each country can customize its own HS code by adding another two or four digits without altering the first six. The HS code can be separated into four parts: chapter, heading, sub-heading, and extra digits. Let’s take HS code 3924.10.1000, for example.

Chapter 39 represents plastics.  Heading 3924 is tableware and kitchen ware.  The specific category is listed under chapter 39.  Salt, pepper, ketchup dispensers and similar dispensers are shown by sub-heading 3924.10. 

These six digits will remain the same everywhere in the world.  The last four extra digits, 1000, are what each country adds for further classification of sub-heading. Here, 0010 means ketchup dispensers.

In the US, the full 10-digit code is called a Harmonized Tariff Schedule (HTS) code. These codes signify the applicable tariff rate of all goods imported from different countries to the US.

Where to find your HS code

  • Check on USITC – do a keyword search, look through the descriptions, and find the corresponding code.  This is your HS code. You’ll find the duty rate here too.
  • Customs broker or international freight forwarder – all you have to do is ask

Step 2:  Use your HTS code to check your import duty rate online

Self-classifying an item incorrectly can be a costly mistake! Please note that the figure you arrive at after your own research may differ slightly from the final amount imposed by the CBP.

Below are the simplest ways to check the rate online:

  1. Search for HTS Revision by chapter on the US International Trade Commission (USITC) website.  Search for the section that your product falls under and select the chapter that classifies your product.
  2. To check the rate, type in the HS code you get (e.g. 6403.19.1000) in the search bar of USITC (e.g., 5%).

       3. These estimates can be affected by several factors, so it pays to check with your logistics provider or freight forwarder, such as Bookairfreight.

Step 3:  Check if there is an additional duty rate for your product

If there’s an extra 25% charged under the trade war, then this will be indicated under the HS code. For example, HS code 8408.10.00, which means a rate of 2.5%, has a note under “General”, telling you to refer to sub-heading 9903.88.01.  There you will see the note “plus 25%”.

This means that your import duty will be the usual 2.5% PLUS 25% for all products from China.  This gives you a new tariff rate of 27.5%

Step 4:  Work out which tax and customs duties you are liable for

Now, we can figure out the import duty and total import tax, which is calculated by the following formulae:

  • Customs Duty = customs value * customs duty rate / imported quantity * customs duty rate
  • MPF Fee = commercial value * 0.3464% (not less than $27.2 and more than $528.33)
  • HMF Fee = commercial value * 0.125%

Using the above formulas to calculate your duty taxes will make it much easier for you to plan the financial side of your business.  You will be able to keep within a budget because you will have a more-than-fair idea of how much your product will cost. 

And at Bookairfreight, our entire team of logistics experts can streamline the service and delivery process for you.  We can save you hundreds of dollars in costly shipping fees. 

You can even start advertising your product and its price before it arrives in the country.  This is because you’ll know the total cost of your product, including shipment fees, making it possible for you to work out your profit margin and do a budget forecast. 

For more information on this important topic, have a look at our frequently asked questions below.

FAQs

1. Do I need to pay import duties on every item I bring from China to the US?

Each situation is different.  If the value of the goods (from the commercial invoice) exceeds $800, you must pay import duties. There are no import duties on goods valued at under $800.  Freight and insurance are not included in the $800.

2. How much is customs duty when importing from China to the US?

Use the guide above to calculate the tariff fee, or contact Bookairfreight and speak to one of our logistics experts.

3. Does the exporter or the importer pay the customs fees?

The US imposes customs duties on goods imported into the country.  A registered importer pays the duties. Therefore, it is the importer who is liable for the import duties.

4. How has the COVID-19 pandemic affected import costs?

Surprisingly, the COVID outbreak has not had much of an impact on import duties at all.

5. How can a logistics expert help me to reduce import costs?

Consulting a logistics expert from Bookairfreight can help you reduce costs in several ways, one of which is to ensure that you avoid penalties by using the right HTS codes. 

We also partner with experienced customs agents that can fill out the correct documents and make sure they are submitted in time.

Most importantly, our self-serve platform allows you to compare freight rates and choose what’s best for you. Compare rates now.

6. How can I further reduce import costs?

Ensuring that your goods are properly packaged can reduce import costs.  The more goods you can fit into a container, the lower the import costs. Freight charges depend on the volume and weight of the cargo.

Either you or your supplier will conduct the packaging and handle the logistics of your import. Your goods, along with thousands of other containers, will be loaded onto a gigantic cargo ship.  The goal is to fit as many goods into a container and as many containers onto a ship as possible.

7. Why import goods from China?

China has a swift turnaround time, high output, and low cost of manufactured goods.  China supplied more goods to the US in 2020 than any other country.  In fact, 18.6% of US imports came from China, with the highest incidence of electrical machinery. 

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Daisy Jiang

Proud Co-Founder and CEO of Bookairfreight. Shortly after starting to work in the world of logistics, I was astonished at how difficult and time consuming it was for businesses to get their hands on a simple air freight quote. I saw this as an opportunity to really make a difference in people’s lives, and felt like I had to do something. It was the spark that lit the fire of Bookairfreight’s creation.

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