President Donald Trump's promised tariffs against China went into effect last week and the Chinese government immediately retaliated with its own tariffs against American goods.
For shippers moving product through the nations, the activity will force major changes in pricing and could require supply chain overhauls.
MEMA responded to President Trump's tariffs last Friday with an implementation primer for its member companies in the automotive and commercial vehicle sectors to help vendors best understand what product coming in from China is now subject to President Trump's 10% tax.
MEMA says President Trump used the International Emergency Economic Powers Act (IEEPA) to sign an executive order issuing the tariffs, which formally launched at 12:01 a.m. ET on Feb. 4. For goods in transit at that time, MEMA says the U.S. Customs and Border Protection (CBP) has released guidelines on how tariffs will be applied.
MEMA states "consistent with the language included in the executive order," items that were placed onboard a vessel before 12:01 a.m. ET on Feb 1, 2025 are exempt from the newly imposed Chinese tariffs of 10% as long as "they are entered for consumption (or withdrawn from warehouse for consumption) before 12:01 a.m. ET on March 7, 2025."
However, MEMA also reports products of China that are entered for consumption beginning Feb. 4, 2025, would be subject to the new tariffs. "Therefore, if there is a product of China that is placed on the vessel between Feb. 1, 2025 and Feb. 3, 2025, but it is not entered until February 4, 2025, or later, then it would still be subject to the tariffs."
MEMA states 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, MEMA states.
[RELATED: Department of Commerce releases findings from brake drum dumping investigation]
The U.S. imported more than $14.6 billion in automotive parts from China in 2023 per the Census Bureau and vehicle parts did not earn an exemption within the executive order.
MEMA reports it will continue to update member companies on any new developments regarding the tariffs as they evolve.
