China Tariffs Prompt Retaliation

While the President's brinksmanship with our closest neighbors took the air out of the room, the enhanced actions against China did not go unnoticeed.

An amended Executive Order increases ad valorem tariffs on specified Chinese products from 10% to 20% under the authority of the International Emergency Economic Powers Act and related statutes.

China's Retaliation

China slapped an additional 15 percent tariff on US chicken, wheat, corn and cotton products, and an additional 10 percent tariff on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products.  China’s customs agency also announced it was suspending imports of wood from the United States.

These actions come on top of the tariffs Beijing imposed on select US products and export controls on key minerals in February after Mr. Trump put a 10 percent additional tariff on all Chinese products.

Chinese Foreign Ministry spokesman Lin Jian told reporters that the US fentanyl problem is a “flimsy excuse” to raise tariffs.

“The US, not anyone else, is responsible for the fentanyl crisis inside the US.” Beijing has taken steps to help the United States, but Washington “has sought to smear and shift the blame to China, and is seeking to pressure and blackmail China with tariff hikes.”

He added, “let me reiterate that intimidation does not scare us. Bullying does not work on us. Pressuring, coercion or threats are not the right way of dealing with China. Anyone using maximum pressure on China is picking the wrong guy and miscalculating.

If the US truly wants to solve the fentanyl issue, then the right thing to do is to consult with China on the basis of equality, mutual respect and mutual benefit to address each other’s concerns.

If the US has other agenda in mind and if war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end. We urge the US to stop being domineering and return to the right track of dialogue and cooperation at an early date.”

CBP Notice for Duties on Chinese Goods

The U.S. Customs and Border Protection (CBP) has issued an amended notice regarding the implementation of additional duties on Chinese imports, as per Executive Order (EO) 14195, which was further modified by EO 14200 and a subsequent March 3, 2025 EO.

Background & Legal Basis

• National Emergency: On January 20, 2025, the President declared a national emergency due to the influx of illegal drugs and migration at the Southern border.

• China’s Role: On February 1, 2025, the President expanded this emergency to include China’s failure to controlprecursor chemicals, money laundering, and drug trafficking, posing an extraordinary threat to U.S. security and economy.

• Legal Authority: Tariffs were imposed under:

• International Emergency Economic Powers Act (IEEPA)

• National Emergencies Act (NEA)

• Trade Act of 1974

Implementation of Additional Duties

1. Initial Tariff Increase: EO 14195 (February 1, 2025) imposed a 10% ad valorem tariff on all PRC imports, except certain exemptions under 50 U.S.C. 1702(b).

2. First Amendment (EO 14200, February 5, 2025):

• Modified de minimis duty-free treatment under 19 U.S.C. 1321.

• Allowed duty-free status only until proper tariff collection systems are in place.

3. Further Amendment (March 3, 2025):

• Tariffs increased from 10% to 20%, effective March 4, 2025.

• Applies to all Chinese imports, including Hong Kong products.

• Exception for goods in transit before February 1, 2025, if properly certified.

Key Modifications to the Harmonized Tariff Schedule (HTSUS)

• New HTSUS Heading 9903.01.24:

• 20% duty on covered Chinese goods, in addition to existing duties.

• Exemptions: Goods under 9903.01.21, 9903.01.22, and 9903.01.23 (e.g., personal-use items).

• Excludes some products under Chapter 98 but includes items under 9802.00.40, 9802.00.50, and 9802.00.60 (for repairs/processing in China).

• No duty refunds (no drawback rights).

Additional Considerations

• Foreign Trade Zones: Chinese goods must be entered as “privileged foreign status”, ensuring tariffs apply upon U.S. entry.

• De Minimis Exemption: Will continue temporarily but will end upon Commerce & Treasury notification.

• Antidumping & Countervailing Duties: Remain applicable in addition to new tariffs.

Implementation of Additional Duties on Products of the People’s Republic of China Pursuant to the President’s Executive Order 14195, Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China