{"id":11941,"date":"2024-06-27T09:46:22","date_gmt":"2024-06-27T16:46:22","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=11941"},"modified":"2024-06-27T09:46:22","modified_gmt":"2024-06-27T16:46:22","slug":"gauging-recent-china-tariff-increases","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2024\/06\/gauging-recent-china-tariff-increases","title":{"rendered":"Gauging Recent China Tariff Increases"},"content":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;11942&#8243; img_size=&#8221;full&#8221;][vc_column_text]<span style=\"font-weight: 400;\">On May 14, 2024, the White House announced increased tariffs on Chinese imports across industry sectors that include steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes and medical products. Many of these sectors are crucial to the Biden administration\u2019s plans to reshore manufacturing, enhance supply chain resilience, and strengthen the transition to more sustainable energy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The White House stated that the tariff increases are intended &#8220;to protect American workers and companies from China\u2019s unfair trade practices,&#8221; such as intellectual property theft. Also cited was China&#8217;s &#8220;export surges that pose significant threats to American workers, businesses, and communities.&#8221; The products subject to the increased tariffs are targeted at the same sectors where the United States is making large infrastructure and other investments.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Actions Might Your Company Need to Consider?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Following are actions your organization can consider in response to the recent China tariff increases announcement:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Assess the impact: <\/b><span style=\"font-weight: 400;\">Conduct an analysis of how the increased tariffs will affect the cost of your imported goods. This includes recalculating the total landed cost and identifying which products and components will see significant cost increases.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Explore alternative suppliers:<\/b><span style=\"font-weight: 400;\"> Look for suppliers in countries that are not subject to the increased tariffs. This might involve developing new supplier relationships or increasing orders from existing suppliers in tariff-free regions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reshore production:<\/b><span style=\"font-weight: 400;\"> Review the feasibility of reshoring manufacturing operations to the United States or moving to countries with more favorable trade terms.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Optimize inventory levels: <\/b><span style=\"font-weight: 400;\">Balance carrying costs against the risks of supply chain disruptions. Consider increasing the inventory levels of critical products prior to the tariffs taking effect.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Classify goods correctly: <\/b><span style=\"font-weight: 400;\">Ensure that all imported goods are <\/span><a target=\"_blank\" href=\"https:\/\/www.qad.com\/blog\/2024\/04\/imports-how-ai-simplifies-product-classification\" rel=\"noopener\"><span style=\"font-weight: 400;\">correctly classified<\/span><\/a><span style=\"font-weight: 400;\"> under the Harmonized System (HS) to avoid unnecessary tariffs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Establish a Foreign-Trade Zone (FTZ):<\/b><span style=\"font-weight: 400;\"> Goods imported into an <\/span><a target=\"_blank\" href=\"https:\/\/www.qad.com\/blog\/2024\/04\/what-does-foreign-trade-zone-ftz-software-do\" rel=\"noopener\"><span style=\"font-weight: 400;\">FTZ<\/span><\/a><span style=\"font-weight: 400;\"> are not subjected to tariffs until such time as the finished products are entered into the US domestic market. The tariffs on finished products may also be lower than on imported parts and components.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">QAD Helps Your Organization in Various Areas<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">QAD can help your business navigate the complexities of tariffs, including those recently imposed on China, in several ways:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tariff Classification: <\/b><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/import-management\" rel=\"noopener\"><span style=\"font-weight: 400;\">QAD Import Management<\/span><\/a><span style=\"font-weight: 400;\"> includes the ability to accurately\u00a0 classify goods according to the Harmonized System (HS) codes. This ensures that companies are applying the correct tariff rates, including those that may be specific to China.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Duty and Tax Calculation:<\/b><span style=\"font-weight: 400;\"> Duties, taxes and fees can be automatically calculated for importing goods from China, taking into account the latest tariff rates. This helps your business estimate the total landed cost of your imported goods.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Trade Agreement Utilization: <\/b><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/free-trade-agreement\" rel=\"noopener\"><span style=\"font-weight: 400;\">Free Trade Agreement<\/span><\/a><span style=\"font-weight: 400;\"> software identifies opportunities to leverage free trade agreements (FTAs) or other trade preference programs that may reduce or eliminate tariffs for specific goods or under certain conditions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Foreign-Trade Zone Management<\/b><span style=\"font-weight: 400;\">: <\/span><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/foreign-trade-zone\" rel=\"noopener\"><span style=\"font-weight: 400;\">QAD FTZ<\/span><\/a><span style=\"font-weight: 400;\"> allows for cost-saving and operational benefits, including the reduction or elimination of duty payments and Merchandise Processing Fees. Your organization benefits from greater efficiency by reducing the burdensome record-keeping associated with goods entering and exiting the zone.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/global-trade\" rel=\"noopener\"><b>Global Trade Compliance<\/b><\/a><b>:<\/b><span style=\"font-weight: 400;\"> QAD helps ensure compliance with trade regulations by managing the documentation and reporting requirements for imports and exports. This includes maintaining transaction records and ensuring that all necessary filings with customs authorities are completed accurately and on time.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Scenario Planning: <\/b><span style=\"font-weight: 400;\">QAD offers <\/span><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/sales-and-operations-planning\" rel=\"noopener\"><span style=\"font-weight: 400;\">scenario planning<\/span><\/a><span style=\"font-weight: 400;\"> so your business can model different scenarios. This includes considering changes in tariff rates or sourcing strategies to understand the financial and operational impacts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/sourcing\" rel=\"noopener\"><b>Sourcing<\/b><\/a> <b>and <\/b><a target=\"_blank\" href=\"https:\/\/www.qad.com\/solutions\/supplier-management\" rel=\"noopener\"><b>Supplier Management<\/b><\/a><b>:<\/b><span style=\"font-weight: 400;\"> QAD\u2019s solutions can assist in evaluating and managing suppliers and sourcing strategies to mitigate the impact of tariffs. This includes analyzing alternative suppliers in different countries or regions with more favorable trade terms.<\/span><\/li>\n<\/ol>\n<p><b>Visit our <\/b><a target=\"_blank\" href=\"https:\/\/www.qad.com\/\" rel=\"noopener\"><b>website<\/b><\/a><b> to find out more about how QAD can help you address fluctuating and increasing tariffs.<\/b>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;11942&#8243; img_size=&#8221;full&#8221;][vc_column_text]On May 14, 2024, the White House announced increased tariffs on Chinese imports across industry sectors that include steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes and medical products. Many of these sectors are crucial to the Biden administration\u2019s plans to reshore manufacturing, enhance supply chain resilience, and [&hellip;]<\/p>\n","protected":false},"author":53,"featured_media":11942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,2045],"tags":[2975,2570,2568,1430,2577,696,1551,1332],"class_list":["post-11941","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-supply-chain-trends","tag-duty-management","tag-export-management","tag-free-trade-agreements","tag-global-trade-compliance","tag-import-management","tag-scenario-planning","tag-sourcing","tag-supplier-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Gauging Recent China Tariff Increases | QAD Blog<\/title>\n<meta name=\"description\" content=\"The US recently increased tariffs on certain China products. 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