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How to avoid the 30% or 15% China-US tariff

August 29, 2019

If you are an importer who buys a lot from China, or an exporter who sells to USA lot,  please read the tips below.

 

Crisis is not only crisis, but most of times, is opportunity. 30% is really a lot.  If your goods are 1 million, that means you need to pay $300,000 as tariff in addition to the duty & tax existing before the US China trade ware.  It was typically around 6% duty for most commodities from China. Now it becomes 36% or 21%.  The margin is eaten up. The meat is bitten. 

 

Is it possible to avoid the tariff?  Yes, it is possible.  Let's describe the methods straight forward. 

 

Method 1.  Move your production line to Mexico. 

You don't need to move your entire production line to Mexico. Just the final step of the process. The products will be eligible for "Made in Mexico", which is further eligible for NAFTA (North America Free Trade Agreement).  NAFTA products are eligible for duty free when sell to USA. The NAFTA will be replaced by the USMCA (United States–Mexico–Canada Agreement), but not big change.

 

The process is total legitimate. The key here is to make sure the "re-manufacturing" process in Mexico make your products eligible for NAFTA.  Also, estimate your cost to set up the production line in Mexico. Is it worthy it? In the long run, I believe it will boost your business.  It will avoid the tariff immediately. But more important, it opens a door to export to USA. It is your winning weapon other competitors might not have.

 

Method 2.  Fulfillment warehouse in Mexico 

 

Bulk import to warehouse in Mexico. Then, send small orders to USA.  There is a program called 321, which allows small orders (<$800.00) to ship to USA without having to pay duty/tax. Tons of packages are being sent to USA via FedEx, UPS or DHL every day.  Most of them don't pay duty. Therefore, you may fulfill your orders from Mexico warehouse to USA.

 

America Ship can help you on both method 1 and 2.  Check out website for more information.  As a matter of fact, we are helping many clients to save and grow.

 

 

 

 

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