News / Shippers should check out the 'small print' in China-US tariff cuts

Shippers may find themselves caught out by the particulars of the 90-day reduction on China-US tariffs, with concerns mounting over the explosion in volume bookings since the news.

Treasury secretary Scott Bessent announced on Monday that the US would cut tariffs on Chinese goods from 145% to 10%, plus a 20% fentanyl tariff, with China confirming it too would cut tariffs on US goods back to 10% – for a 90-day period.

However, a White House statement appeared to undercut Mr Bessent, noting that while tariffs introduced on 8 April had been removed, “duties imposed prior to 2 April” would be retained.

These, it said, included “Section 301 tariffs, Section 232 tariffs, tariffs imposed in response to the fentanyl national emergency invoked pursuant to the International Emergency Economic Powers Act, and ‘most favoured nation’ tariffs”.

Machinery part distributor Huyett CEO Tim O’Keefe said he took this to mean there had “been no meaningful changes to the tariffs affecting iron, steel, and their derivatives”.

He said: “In fact, tariffs on fasteners from China have increased by 45% since the beginning of the year, and imports from Taiwan, Vietnam, India, Mexico, and Canada face a 25% duty. In other words, the fundamental cost pressures remain firmly in place.”

Applicable to some 60% of Chinese goods, the Section 301 tariffs were introduced during Mr Trump’s first term as president and sit at a rate of a little over 20%.

Trade advisory the Hinrich Foundation comnfirmed that shippers needed to be aware of the tariff programme that preceded the so-called “Liberation Day” announcements.

It noted: “A large, growing list of products are covered by sector-specific tariffs of 25%, which apply to steel, aluminium products made with these metals, as well as autos and auto parts.

“Goods that had Section 301 tariffs in place from Trump 1.0 (and the Biden administration) must also continue to pay these tariffs, pushing totals closer to 50%, or more. Some products are also subject to additional duties under anti-dumping or countervailing duty decisions.”

Added to which, it said some goods remained subject to most favoured nation (MFN) tariffs, applied before Mr Trump took office. And while pointing out that some MFN rates were low, on average, it stressed that “there are some peaks which can be substantial”.

It warned that the headlines on tariff relief had tended to “dramatically underestimate the actual number of tariffs imposed on Chinese imports”.

Pointing to numerous presidential executive orders, it said: “The number of changes to tariff policy in the past 100 days of the administration has been challenging to track. In addition to this have been the president’s frequent and confusing social media broadcasts.

“Traders that are used to waiting for guidance from US Customs and Border Protection (CBP) to confirm technical details have often been given only a few hours of notice.”

With yesterday the first day of the 90-day reduction, question marks hover over how cognisant shippers and their forwarders are of the nuances in tariff policy.

Vizion’s VP of strategic business development, Ben Tracy, noted that within 24 hours of the rollback, the impact on bookings had been pronounced, surging some 277%.

Mr Tracy noted on LinkedIn: “First day of the 30% tariffs on Chinese goods, and how have bookings changed? I looked at a rolling seven-day average for bookings teu China-US.

“Looking at last Monday (5 May), that figure was 5,709 teu, as of yesterday [it] is at 21,530 teu. That is a massive increase of 277% in one week. We are definitely starting to see the bookings return now this temporary pause is in effect.”