Tariffs and Their Impact on International Shipping

How will the new U.S. tariffs for China and Hong Kong SAR be applied?

Tariffs are applied to all goods originating from China and Hong Kong SAR per the Federal Register Notice.

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What are Rules of Origin and do they apply to tariffs?

Rules of Origin are the criteria used to determine a product's country of origin for trade and customs purposes. They are essential in applying tariffs, trade agreements and import restrictions. In this case, the Rules of Origin will ensure that all products from targeted countries are subject to tariffs, regardless of their routing to the US.

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What happens if my recipient does not pay the duties and taxes for a shipment from China Mainland or Hong Kong SAR, given the removal of the de minimis exemption from May 2, 2025?

Effective May 2, 2025, the de minimis exemption for low-value shipments (US $800 or below) from China Mainland and Hong Kong SAR to U.S. has been removed.

UPS is committed to supporting your business by ensuring a smooth delivery experience for you and your customers. One important way we do this is by helping reduce the risk of duties and taxes going unpaid by the recipient.

When these charges remain unpaid, they may be reassigned to you as the shipper, in accordance with the UPS Terms and Conditions of Service. To help minimise the occurrence of reverse billing in the future, we strongly recommend the following best practices:

• Ensure your recipient details (e.g. email address, phone numbers) are accurate during shipment preparation
• Proactively inform recipients about potential import brokerage charges, including duties and taxes

In addition to these practices, UPS also offers Import Cash on Delivery Pre-Payment Application (ICOD PPA)¹, which automatically notifies your recipients via email and/or SMS before delivery, offering a secure and convenient payment link for pre-paying applicable duties and taxes.

Additionally, there are also a range of UPS tools available that are designed to help you avoid unexpected costs associated with duties and taxes, and enhance the overall delivery experience for you and your customers:

• UPS Global Checkout (GCO)² is an e-commerce tool that provides all-in guaranteed landed cost at checkout, including all government fees, duties, and taxes, ensuring transparency for both shipper and recipient.
• Billing Option - Duty/Tax Paid by Shipper allows shippers to cover all international delivery costs, including duties and taxes, eliminating the need for your customers to bear unexpected charges.

¹ Available in United States of America, Canada, Mexico, Austria, Belgium, Czech Republic, Germany, Denmark, Spain, France, Great Britain, Hungary, Ireland, Italy, Luxembourg, Netherlands, Poland, Portugal, Sweden, China Mainland, Hong Kong SAR, Indonesia, Japan, South Korea, Macau SAR, Malaysia, Philippines, Singapore, Taiwan, China, Thailand, and Vietnam.
² Available in over 200 destination countries and territories worldwide.

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Are there exceptions to the 20% additional duties for China and Hong Kong SAR?

Some exemptions may exist for specific commodities as noted in the Cargo Systems Messaging Service (CSMS) bulletin # 63988468. Customers should seek guidance from a qualified professional to confirm if these apply to their products.

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Can I claim duty drawback on new U.S. tariffs for China, Mexico or Canada?

No. The additional duties imposed by the Executive Order are not eligible for duty drawback.

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How will the new U.S. tariffs affect shipping costs?

US trade policy changes will likely increase landed costs due to tariffs and require adjustments to import declarations. Businesses may need to adjust pricing or explore alternative supply chains to manage costs effectively.

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How are shipments subject to formal entry handled vs. informal entry?

Non-de minimis shipments will be subjected to formal entry or informal entry depending on various circumstances.

The following will be billed to the shipper or consignee depending on the shipment’s bill term:

Formal entry:

• Merchandise Processing Fee (MPF)
• Duties and taxes as imposed by customs
• UPS customs brokerage fees

Informal entry:

• Duties and taxes as imposed by customs
• UPS customs brokerage fees

Additional tariff resources to help prepare your shipment:

Harmonized Codes (HS codes), also known as tariff codes

• These codes are used internationally to classify traded products and determine the tariffs, duties and taxes due
• Identify the HS code for your goods here

Electronic Export Information (EEI) forms

• If you are shipping a single commodity that is valued over $2,500 you will be required to fill out an EEI form
• EEIs are filed electronically with Automated Commercial Environment (ACE) either by you or UPS on your behalf
• ACE is the U.S. Customs and Border Protection's (CBP) online platform
• ACE connects businesses with CBP and other federal agencies

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As a shipper, how should I prepare my clearance documents to be compliant with the new regulations?

All shippers are urged to ensure that all information on the commercial invoice is accurate and detailed to facilitate a more efficient customs clearance process and avoid potential delays.

Please click here to learn more about the respective entry type based on shipment value, requirements and applicable fees for goods originating from China or Hong Kong SAR origins.

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What are the most common UPS Brokerage surcharges that I should be aware of?

Disbursement fee, Warehouse storage fee and Additional tariff lines surcharge are the most commonly billed brokerage surcharges. For these charges, the charge applicable in the destination country will be assessed. A Duty/Tax forwarding surcharge will be charged when the duties and/or taxes are billed outside the destination country. Please see the surcharge descriptions below and the corresponding fees referenced below are for shipments destined to the U.S.

Disbursement fee: A fee of the amount paid or processed by UPS on behalf of the customer will be charged. Shipments to U.S. destinations will incur a fee of 2% of duty/tax (minimum $14.00).

Warehouse storage fee: This will be assessed when shipments remain in the UPS warehouse in the U.S. after the two free days, regardless of the customs broker. A minimum of US $25 + US $0.05 per lb. per day will apply after two days. The rate of $0.10 per lb. per day will apply after 7 days.

Additional tariff lines surcharge: A fee of $3/line applies when more than three entry lines are entered for shipments destined to U.S. destinations. UPS is not responsible for consolidating entry lines for customs clearance, including lines containing the same Harmonized Tariff Code and Country of Origin.

Duty/Tax forwarding surcharge: When the “Duty/Tax Forwarding Surcharge” billing option is selected, a surcharge of RMB150.00 will be billed to the shipper.

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Will duties and taxes be incurred if I shipped before a regulatory update is made, but the shipment arrives after?

In light of potential changes announced by U.S. Customs and Border Protection (CBP), UPS may require additional time to ensure compliance with regulatory requirements. As a result, please note that some shipments may experience delays, and any new duties or taxes incurred during this period will fall under the responsibility of the customer. While UPS strives to minimise any impact on shipments, we are unable to assume liability for any duties or taxes that may arise, including those due to shipment holdovers. The UPS Service Guarantee does not apply where delays result from these regulatory requirements.

As per standard practice, if duties or taxes cannot be collected from the receiver, the charges may be billed to the shipper.

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