Import Costs From China: Duties, Taxes and Other Fees (2024)

Import costs from China have become a vital issue for many importers. By many metrics, China is one of the largest product manufacturers in the world. Due to China’s manufacturing reputation, many importers, large and small, turn here when they need to import products for their business. As a result, it’s crucial to have an in-depth understanding of the costs of importing from China.

Import costs from China include:

• Customs Duties
• Section 301 Tariffs
• AD/CVD (Anti-dumping and Countervailing Duties)
• Harbor Maintenance Fees (HMF)
• Merchandise Processing Fees (MPF)

A Licensed Customs Broker can help you understand shipping terms and ensure correct HTS classification for goods when importing from China.

Read on to learn more about the cost of importing from China, how to reduce those costs, and more.

Do I Have to Pay Import Tax From China?

Yes, there are a number of taxes, duties and other fees required when importing goods from China. Most notably, importers are required to pay import taxes, or customs duties, on imported goods, just like they would when importing from any other country.

Additional costs, like Section 301 tariffs and anti-dumping/countervailing duties (AD/CVD) are owed on specific products imported from China. There are also added costs like Merchandise Processing Fees, Harbor Maintenance Fees, and other miscellaneous costs that have to be taken into account when importing.

Customs Duties

Customs duties are owed on nearly every product imported from China to the United States. This rule applies so long as the total value of the imported goods totals $800 or more (known as the De Minimis value). If the goods that you’re importing cost less than $800, they are not subject to duty or taxes (with the exception of goods like alcohol and tobacco).

In order to figure out how to calculate import duty from China to the U.S., you need to know your product’s HTS classification. Every internationally traded item can be classified using the International Harmonized System (HS).

Once you find an item’s corresponding HS code (or HTSUS if importing from the United States), you will find the tariff rate associated with that product. That code will then be listed on the commercial invoice.

Does the United States have a Trade Agreement with China?

In addition to the tariff rate, an HTS code will also indicate whether or not the U.S. has a trade relationship with any country for specific product imports. According to the U.S. International Trade Commission (USITC), tariff rates are broken up into three categories:

1. General (Normal Trade Relations or Most Favored Nation)
2. Special (Free Trade Agreement)
3. No Trade Relationship

China falls under the “General” category. That means that the United States and China do not have a trade agreement in place. No special treatment is given on imports of goods from China to the U.S.A.

Section 301 Tariffs

In addition to normal customs duties, a country may also impose additional tariffs on products imported from foreign countries. In the case of China, the U.S. has imposed Section 301 Tariffs on thousands of goods.

Section 301 was signed in 2018 as part of an ongoing trade war between the U.S. and China. The signing imposed tariffs on $550 billion worth of commodities regularly imported from China to the U.S. The tariffs are broken up into four separate lists, each covering various goods and including exclusions and tariff rates.

Anti-Dumping/Countervailing Duties (AD/CVD)

Anti-dumping and countervailing duties are imposed on certain goods in order to protect domestic industries.

If a foreign country is found to be “dumping” goods into the U.S. at a far lower cost than those goods are being sold in the U.S., antidumping duties will be put in place. The USITC is the organization responsible for implementing anti-dumping duties. Anti-dumping duties are imposed by taxing the goods in question at a far greater rate than the value of those goods.

Similarly, countervailing duties are placed on certain goods for similar reasons. Countervailing duties are implemented when export subsidies make the sale of certain products non-competitive for domestic industries.

The International Trade Administration has a full list of all goods from China subject to AD/CVD.

Merchandise Processing Fees (MPF)

According to Customs and Border Protection (CBP), another fee you’ll have to pay when importing into the U.S. is the merchandise processing fee. The amount you pay depends on whether or not the value of your shipment totals more than $2,500 (not including duty, shipping, or insurance fees).

• For an informal entry (goods valued at $2,500 or less), importers are required to pay $2.22, $6.66, or $9.99 per shipment.
  • Automated imports, not processed by the CBP, are $2.22.
  • Manual imports, not processed by the CBP, are $6.66.
  • Automated or manual imports that are processed by the CBP are $9.99.
• For a formal entry (goods valued at more than $2,500), importers are required to pay 0.3464% of the value of the goods.
  • According to CBP, the minimum MPF cost of a formal entry is $27.75. The max MPF owed is $538.40.

For example, let’s say you have two separate shipments: one valued at $500, and the other, a high-value shipment valued at $160,000. Assuming the $500 shipment is manual, but not processed by CBP, you’d owe a flat rate of $6.66 for your merchandise processing fee. That would bring the total cost of your shipment, plus the MPF, to $506.66.

As for the $160,000 order, you would have to multiply that amount by 0.003464, equaling $554.24. However, because this figure exceeds the maximum allowed MPF, your fee would be $538.40. That would bring the total cost of your shipment, plus MPF, to $160,538.40.

MPF Calculations

Harbor Maintenance Fees (HMF)

If your goods are shipped by sea, you’ll be required to pay a Harbor Maintenance Fee. The Harbor Maintenance Fee rate is 0.125% of the value of the imported cargo. There is no minimum or maximum HMF.

Additionally, this fee is charged for goods regardless of duty-free status. Harbor maintenance fees help cover the costs of maintaining ports and harbors around the country.

Additional Costs to Import from China

Many of the taxes and fees listed above are required in order to import from China. However, there are other costs you need to consider. While not always required, freight insurance is highly recommended, especially for high-value items or any items making a cross seas voyage.

Importers must also consider the cost of shipping, storage, and potential accessorial fees owed on the goods once they arrive at port. Federal excise taxes and sales taxes are also required on certain goods. It’s worth noting that value-added taxes (VAT rates) are not charged on imports from China to the U.S.

No matter what you’re planning to import, it’s important to keep in mind all of the potential costs that you may be responsible for before you make your purchase. Below, we’ll list some options available to help reduce import costs.

Do you need an import compliance manual for your business? Make sure that all of your bases are covered in the event of an inspection by CBP, especially if importing goods from a country impacted by an import ban like China. Read more about import compliance manuals and get help determining if it's the right move for you.

How Can I Reduce Import Costs From China?

There are multiple ways to reduce import costs when shipping from China. Ultimately though, the process comes down to getting professional advice and being able to do your own research. Some of the best ways to reduce import costs include:

• Hiring a licensed customs broker
• Finding the right supplier
• Negotiating beneficial shipping terms
• Packaging your products efficiently

Hire a Licensed Customs Broker

A customs broker licensed by CBP can be an incredible asset when importing goods from China. Ways that a customs broker can help reduce import costs include:

• Ensuring all tariff classification is accurate in order to avoid penalties for using the wrong HTS codes
• Filling out the proper documentation and submitting it on time
• Negotiating or consulting for beneficial Incoterms ®
• Recovering Section 301 duties

Customs brokers are there to work for you and address all of your importing needs. Hiring a licensed professional is one of the most surefire ways to ensure that the proper procedures are being followed and to avoid or reduce any potential importing costs.

Find a Supplier with Competitive Rates

When looking to reduce import costs from China, one of the first steps you should take is to shop around for a supplier offering competitive rates. There are countless manufacturers competing for your business. If you don’t find a price or quality of product that meets your needs, simply shop around and screen suppliers until you do.

Some of the most popular platforms used to source Chinese suppliers include:

• Alibaba
• Global Sources
• DHgate
• AliExpress
• Made-in-China

However, when sourcing products from Chinese suppliers, it’s important to keep a number of things in mind.

1. Some Resellers Advertise Themselves as Manufacturers: While this may not be an issue for many goods, it could create major issues for products that need to be custom-made or require detailed technical specifications.

2. If a Price is Too Good to be True, It Probably is: While it’s understandable that you would want to find the lowest prices you can, a price that is too low likely signals that the quality of the item is lacking. Shop around for a competitive rate, but be aware that you might get what you pay for.

3. Be Aware of Minimum Order Quantities (MOQs): Depending on the size of your business, the amount of product that you need to import may not always match up with a seller’s requirements. You may find a supplier that offers competitive rates, but they might require a large MOQ.

If the amount of product that you would have to order exceeds the benefit that you’d get from ordering from a cheaper supplier, it likely won’t be worth it. Shop around until you can find a supplier that meets your needs for both cost and order quantity.

Are any of the goods you import from China manufactured in or sourced from the Xinjiang region? Any goods or materials produced in the region are prohibited from entry into the U.S. Read our article on the Xinjiang import ban to find out more and avoid having your shipment fined and detained.

Negotiate Better Shipping Terms

Another way to reduce import costs from China is to negotiate for Incoterms ® that meet your importing needs. Incoterms ® are mutually agreed-upon conditions between a seller and buyer.

These shipping terms cover details like ownership transfer, transportation costs, insurance, import duties, and more.

There are 11 different Incoterms ® that can be negotiated. The most buyer-friendly option is Delivered Duty Paid (DDP). In a DDP agreement, the seller is responsible for all costs associated with the shipment, including transportation, insurance and even customs duties.

On the other hand, the most seller-friendly option is Ex Works (EXW). Under EXW, the buyer is responsible for all costs and risks associated with the shipment.
Many small businesses and importers shipping small orders choose EXW when importing. Oftentimes, it’s difficult to get a seller to agree to Incoterms ® that don’t directly benefit them. Instead, a buyer will choose to work with an experienced and reliable customs broker or freight forwarder. When working with a partner that strives to find the best prices and solutions to meet your needs, you can reduce import costs at every turn.

Remember, Incoterms ® are a negotiation. Both parties obviously want the terms that best suit their needs. As the importer, however, you’re unlikely to make that happen without compromising in other areas.

As a result, the most common Incoterms ® are Free on Board (FOB). Under FOB, the buyer and seller split costs 50/50. The seller assumes costs and risks up to the point that the goods are loaded onto the ship for departure. The buyer takes over from there, taking responsibility for the goods while on the ship or once they arrive at their destination.

Finding Incoterms ® that work for you is one of the best ways to reduce import costs from China. If you’d like to learn more, the International Chamber of Commerce (ICC) has a full list of incoterms ® available.

Pack Smarter

Whether you or your supplier handle the packing and logistics involved in shipping your goods, it’s important to keep in mind how the proper packaging can reduce costs.

In all likelihood, your products will be loaded onto a massive cargo ship with thousands of containers making their journey from China to the U.S. For those shipments, the name of the game is fitting as much cargo into a container - and as many containers onto a ship - as possible.

As a result, freight charges are often calculated based on the weight and volume that the cargo takes up. By consolidating your goods and packing them in an effort to fit more goods into fewer shipments, you can reduce import costs.

Can I Avoid Import Costs From China to the U.S.?

The short answer is: No, you can’t. When products are imported into the United States, there are always going to be taxes and fees that need to be paid. The closest option available to avoiding import costs would be to negotiate DDP Incoterms ® with your supplier. In that case, the supplier would be responsible for all transportation, insurance and customs duty costs.

However, it’s unlikely that you’ll be able to get a seller to agree to those terms. Even if you are able to obtain these terms, you’ll likely experience increased costs elsewhere.

How to Calculate Import Costs From China to the U.S.?

When looking to reduce import costs from China, it’s crucial to do your research and calculate all costs you’ll be responsible for before you make your purchase. The main costs you’ll need to consider when making your calculations are:

1. Cost of Goods: Obviously, this will vary depending on the commodities you plan to import, the quantity you plan to import, and the supplier you choose to buy from.

2. Duties and Tariffs: To calculate the duty owed on imports from China to the U.S., the first thing you need to do is find your product’s HTS code. You can do this by using an HTS code lookup tool to find your product and its corresponding tariff rate. Additionally, check to see whether your product is subject to any AD/CVD or falls under Section 301 tariffs.

3. Transportation and Shipping: These costs will vary depending on the mode of transportation you use to ship your products (ocean, air, etc.), the port that your goods are departing from/arriving to, and the shipping company you choose.

4. Other Fees: This includes costs like the merchandise processing fees and harbor maintenance fees (discussed and calculated above), as well as insurance, document fees, accessorial charges, and more.

The total cost for each of these expenses will always depend on you and your business needs. Once you determine the cost of each of these factors, you can add them together to calculate your total import costs.

As stated before, it’s critical to do your own research and make your calculations before you make any import decisions.

Check out our article on the risks of importing. This post will help you understand that challenges you can face when bringing goods in from China or any other foreign country.

Why Import Goods From China?

New entrepreneurs and established import/export businesses, alike, turn to China when looking to import products into the United States. China is one of the top global options for product sourcing due to its quick turnaround time, high output and low cost of products.

In fact, according to the Office of the United States Trade Representative (USTR), China was the largest supplier of goods imported into the United States in 2020. Altogether, China totaled $434.7 billion and accounted for 18.6% of U.S. imports. The most imported products include:

• Electrical Machinery ($111 billion)
• Machinery ($97 billion)
• Toys and Sports Equipment ($26 billion)
• Furniture and Bedding ($23 billion)
• Miscellaneous Textile Articles ($21 billion)

China is also the U.S.’s seventh-largest supplier of agriculture products, totaling $3.8 billion in 2020. The most imported agricultural imports include:

• Processed Fruit and Vegetables ($896 million)
• Food Preparations ($327 million)
• Dog and Cat Food ($202 million)
• Fruit and Vegetable Juices ($198 million)
• Livestock Products ($193 million)

Import From China with USA Customs Clearance

Whether you’re an experienced importer or a new entrepreneur, navigating the world of customs clearance and global imports can be complicated and confusing. At USA Customs Clearance, we have the experience and know-how to help you buy and sell products internationally, and reduce costs while doing so.

Our Licensed Customs Brokers can guide you through every step of the import process. They can also help you register to become an Importer of Record. If you need to secure a customs bond, we can help with that too. You can even purchase a new importer bundle, which includes each of these options and more! Speak with one of our experts and get started importing today.