Executive Summary: Initiated in 2018, the Section 301 tariffs apply a punitive duty (mostly 25%) on ~70% of Chinese imports to the USA. In 2026, these are no longer “temporary.” They are the new baseline. Importers must factor this 25% into their landed cost models.
The Lists: Is Your Product Affected?
The tariffs are grouped into “Lists” based on HTS Codes.
- List 1 & 2: Industrial tech and machinery. (25%).
- List 3: Wide range of consumer goods (Furniture, Luggage, Auto Parts). (25%).
- List 4A: Certain clothing, bluetooth speakers, TVs. (7.5%).
- List 4B: Cell phones, Laptops, Toys. (Mostly suspended/0%).
Action: You must find your HTS Code on the USTR website to know your specific rate.
Calculating the Cost
Duties are compound.
Example: A Backpack (HTS 4202.92).
- Base Duty (Standard MFN): 17.6%
- Section 301 Duty: 25%
- Total Duty: 42.6%
Impact: A $10 bag costs $14.26 just to land at the dock.
The Exclusion Process (and its death)
Previously, importers could petition for an “Exclusion” if the product could only be made in China.
- Status 2026: Most exclusions have expired. Only specific medical supplies and unique industrial inputs retain active exclusions.
- Refunds: If you paid tariffs on an excluded item, you can file a “Post Summary Correction” (PSC) to get money back, but the window is short.
Substantial Transformation Strategy
To legally avoid the tariff, the “Country of Origin” must change.
- Scenario: You ship Chinese components to Vietnam.
- Rule: Simple assembly (screwdriver work) does NOT confer origin. The product must undergo a “Substantial Transformation” (new name, character, and use) in Vietnam to be labeled “Made in Vietnam” and avoid the 301 tariff.
- Warning: CBP audits this aggressively. If you fake it, it is fraud.
FAQ
Q1: Will the tariffs go away soon?
A: Highly unlikely. They have bipartisan political support in the US.
Q2: Does the tariff apply to shipping costs?
A: No, only the FOB value of the goods.
Q3: Who pays the tariff?
A: You, the Importer of Record. Not the Chinese factory.
Q4: Can I lower the declared value to save tax?
A: That is criminal fraud. CBP sees X-rays and knows a $500 machine isn’t worth $50.
Key Takeaways
Check the Total Rate: Don’t forget the Base Duty. Section 301 is on top of the normal duty.
- Don’t Count on Exclusions: Assume you will pay the full 25%.
- Audit Origins: If buying from Vietnam, ensure it isn’t just transshipped Chinese goods, or you will be liable for the evaded tariffs.
