Tariff Talk

Last night, we all learned that tariffs assigned to goods manufactured in China now exceed 100%. Let’s get into the facts.

Before the midnight bell tolled, President Trump increased the intended reciprocal tariff on products coming from China to the U.S. by 50%, resulting in a reciprocal tariff of 104% on many products. In response, products from the U.S. entering China now face tariffs of 84%. The China tariff applies to all goods manufactured in China—regardless of whether they ship from Italy or Zimbabwe. If China manufactured it, China tariffs apply. Some items will not be subject to these new reciprocal tariffs if they are already assessed additional tariffs for steel and aluminum. There is also a general duty and possible Section 301 tariffs that may apply.

So, what does it mean when we hear that China is “paying a billion dollars a day” if U.S. importers are the ones paying the bill and shouldering the regulatory responsibilities? Our belief is that it’s part of the long game: bringing U.S. manufacturing back home, which will ultimately result in a loss of revenue to China and Chinese businesses.

Until those factories are supplying toothbrushes, toys, mobile phones, wearing apparel, footwear, kitchenware, etc., U.S. importers will be faced with the decision of how to handle these tariffs—absorb them or pass them on to the next party in the supply chain, ultimately the consumer. How long can a small to medium-sized company absorb the cost?

OCEANAIR continues to stay on top of the changing tariff conditions; please reach out to Sales or Compliance with any questions.