- by Best Inc.
- May 3, 2020
With any cross-border transactions, there has to be a keen understanding of the customs and clearance policies, as well as stay up to date with any major changes. For companies doing business between China and the United States, it is essential to have the right information on hand to guide the business dealings. We have compiled the major changes in customs and clearance for businesses between these two countries in this article.
China – U.S. Trade Deal
Only stage one of the China – U.S. trade deal has been signed. In this agreement, the US has agreed to cancel the tariffs originally planned for 12 December 2019. They have also agreed to cut the tariffs imposed in September on USD120 billion of Chinese imports, from 15% to 7.5%, leaving in place 25% tariffs on USD250 billion in imports.
U.S. Customs requires that all import shipments valued at $2,500 and above must be backed by a customs bond when clearing through customs. This is a guarantee to the U.S. government that duties/taxes and any possible customs penalties will be paid if incurred.
There are two options for customs bonds. They are:
- Single entry bond (single use, per shipment)
- Annual customs bond (valid for a period of one year, covers all bond transactions during this time period)
Usually, annual customs bonds are recommended for importers bringing in roughly 3-4 ocean shipments, or 6-7 air shipments, valued at over $2,500 each over the course of a year. If the commercial value is even higher, the importer may be able to benefit from this annual bond still with fewer shipments.
Direct Duty Withdrawal
For direct duty withdrawal, the importer needs a U.S. bank account, and an application is to be submitted to USCBP to request the ability to obtain the direct duty withdrawal application. If approved, USCBP would be able to deduct import duty due for shipments directly from the importer’s account. This is beneficial as it avoids holdups where duty payments do not come through on time. It also helps importers maintain good accounting records of their duty payments, especially for importers who bring in shipments frequently and consistently.
Common Mistakes When Importing Into The U.S.
The most common mistake is a failure to apply the proper country of origin markings on imported products and point-of-sale packaging. The markings need to be permanent, legible, and conspicuous. Failure to comply may result in costly fines and/or rework fees.
Another mistake is inconsistent information on shipping documents. All shipping documents, such as air waybills, ocean bill of ladings, commercial invoices, and packing lists, should have information that matches throughout. This includes commodity descriptions, name and address of the shipper, consignee name and address, etc. Failure to comply may trigger customs inspections and delay customs release processing. When dealing in shipments from China to the U.S., it is imperative that the shipping company you choose is an expert in such cross-border transportation. Be sure to delve into the background of your supply chain service providers as you consider who to partner with. At Best Inc., based in Hangzhou, China since 2007, we have deep expertise in U.S. - China transportation. Make the right choice to partner with us for your logistical needs.