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MEMA Issues Details on China Tariff Implementation

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Bill Long, president & CEO,

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, The Vehicle Suppliers Association, issued this statement regarding the implementation of China tariffs to its membership.

Dear MEMA Members, 

On February 1, 2025, President Trump signed an 

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 which imposed new tariffs on the majority of items coming from China into the U.S. These new tariffs are being implemented under the International Emergency Economic Powers Act (IEEPA). The IEEPA tariffs, set at 10%, went into effect at 12:01 am ET on February 4, 2025. There is currently no date by which the tariffs will sunset. Further, the 10% tariffs articulated in this Executive Order will be imposed on top of any prior and existing “duties, fees, exactions, or charges applicable to such imported articles.”

China subsequently announced retaliatory tariffs of between 10-15% on certain U.S. goods and further imposed export controls on five critical minerals.

Additional Details:

Goods in Transit: U.S. Customs and Border Protection (CBP) issued a 

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 on February 5, 2025 and 
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 via the Cargo System Messaging Service which provide more information on the items covered by the new tariffs.

Consistent with the language included in the Executive Order, CBP noted that items that are onboard a vessel before 12:01 am EST on February 1, 2025 are exempt from the newly imposed Chinese tariffs of 10% as long as they are entered for consumption (or withdrawn from warehouse for consumption) before 12:01 am EST on March 7, 2025.

However, products of China that are entered for consumption beginning February 4, 2025 would be subject to the new tariffs. Therefore, if there is a product of China that is placed on the vessel between February 1, 2025 and February 3, 2025, but it is not entered until February 4, 2025 or later, then it would still be subject to the tariffs.

CBP further issued guidance via its Cargo Systems Messaging Service on how companies can certify eligibility for this provision. Importers will need to use secondary HTS 9903.01.23 if they are eligible for this “on the water” exception. The use of HTS 9903.01.23 will only be available for those imports within those time-bound requirements.

Goods Covered by the Executive Order: The CBP notice covers the majority of goods coming from China into the U.S. There are very limited exceptions for donations (i.e., food, clothing, medicine used to relieve human suffering) and informational materials (e.g., publications, films, posters). In addition, an importer can make use of the Chapter 98 duty saving or reduction provisions (e.g., U.S. goods returned, goods exported for repair/alteration and returned). See below.

Excluded from the IEEPA Tariffs:

9903.01.21: Articles the product of China and Hong Kong that are donations, by persons subject to the jurisdiction of the United States, of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering.

9903.01.22: Articles the product of China and Hong Kong that are informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds.

CHAPTER 98:  The additional duties imposed by heading 9903.01.20 shall not apply to goods for which entry is properly claimed under a provision of chapter 98 of the tariff schedule pursuant to applicable regulations of CBP, and whenever CBP agrees that entry under such a provision is appropriate, except for goods entered under heading 9802.00.80; and subheadings 9802.00.40, 9802.00.50, and 9802.00.60. For subheadings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed (in China and Hong Kong), as described in the applicable subheading. For heading 9802.00.80, the additional duties apply to the value of the article assembled abroad (in China and Hong Kong), less the cost or value of such products of the United States, as described.

Drawback: The Executive Order states that drawback will not be available for items covered by the IEEPA tariffs.

De Minimis: The Executive Order revoked duty-free “de minimis” treatment for goods coming into the U.S. from China that are subject to the order. According to CBP: “De minimis provides admission of articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800.” For more information, see the CBP Guidance on De Minimis Shipments from China: 

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NOTE: De Minimis Update on 2/7/2025: The White House issued an Executive Order which announced the suspension of the afore-mentioned revocation on de minimis treatment for goods coming from China. MEMA is still analyzing the new order but it indicates that the revocation would return once “adequate systems are in place to fully and expediently process and collect tariff revenue applicable.”

Source: 

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CBP is expected to issue an updated guidance document to help inform the trade community of the details concerning this change. MEMA will share this information as soon as it becomes available.

Free Trade Zones (FTZ): Beginning February 4, goods subject to these IEEPA tariffs must be admitted in a zone as “privileged foreign status” (with limited exceptions for goods eligible for “domestic status”). When withdrawn from the zone and entered for consumption, the goods will be subject to the IEEPA tariffs (and other applicable duties) related to the classification under the applicable HTSUS subheading in effect at the time of admission.

Exclusions: At this time, there is no language in the Executive Order concerning an exclusion process.

Escalation: The Executive Order includes language stating that the U.S. may escalate these actions if China takes steps to retaliate against U.S. exports and goods.

MEMA will continue to update member companies on any new developments regarding the tariffs. As new details may evolve, we will promptly notify members of any changes as soon as more information becomes available.

If you wish to join the MEMA Trade Working Group, contact Bill Frymoyer.

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      Speed Sensors (ISS/OSS)           | P0715 / P0720 / erratic       | $25–$80 ea    | Yes                   | No
      Clutch Kit (Manual)                    | Slipping / difficulty             | $120–$280     | Yes                   | N/A
      Flywheel (Manual)                      | Vibration / shudder           | $80–$380        | Yes                   | N/A
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      CVT Assembly                            | Shudder / whine / failure   | $520–$1,380   | IS the unit       | Yes — always
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