On October 1st, let's talk about the conclusion first:China and the United States have agreed on a list of products subject to a "30 billion to 30 billion" reciprocal tariff reduction. More than 90% of the listed products will be exempted from all tariffs imposed on each other and restored most-favored-nation tariff treatment; the Kuala Lumpur Economic and Trade Consultation Joint Arrangement will be extended to 2027 January 10.This is the results of the eighth round of Sino-US economic and trade consultations announced by the Ministry of Commerce from September 28 to 30. It is the policy news that is most worthy of careful reading for exporting factories to the United States in the fourth quarter. The data in this article has official sources and links can be found.
1. Reciprocal tax reduction: Both parties have agreed on a US$30 billion list, and 90% of products will be exempted from tax increase
According to the situation announced by the Ministry of Commerce on September 30, China and the United States reached a consensus on a US$30 billion reciprocal tax reduction framework under the framework of the Trade Council: the two sides agreed to reduce their respective scales.$30 billionImported products (with reference to bilateral trade volume in 2024) will be provided with tariff reduction treatment in a reciprocal manner on the basis of complying with their respective domestic laws and procedures. whereinMore than 90% of productsAll tariffs imposed on each other will be exempted and most-favored-nation tariff treatment will be enjoyed.
The structure of the list has been clarified: the United States willToys, home appliances, baby products, kitchen and bathroom supplies, holiday giftsWait until about US$30 billion in imported goods from China are reduced in tariffs-almost all of them fall on light industrial consumer goods; China will impose tariffs onAgricultural products, personal care products, medical devices, coalWait for about US$30 billion in imports from the United States to reduce tariffs. Both parties will jointly announce their respective lists of tax reduction products, and after fulfilling domestic legal procedures,Simultaneous implementation of tax reductions.
Direct implications for the factory: If your products are on the tracks of toys, home appliances, kitchen and bathroom, and festival supplies, there is room for renegotiation of the tariff allocation terms from the fourth quarter to the first quarter of next year-who will bear the additional levy before can now be re-calculated based on "duty-paid costs after tax reduction." Data source:Published on the website of the Ministry of Commerce on September 30 (the full text is reproduced on Yunnan website).
2. Supporting mechanisms: Trade Council, Investment Council and Agricultural Working Group
This round of consultations not only talks about tax reductions, but more importantly, fixing the communication mechanism:
- The China-US Trade Council officially opened.The task is to optimize bilateral trade and discuss arrangements to optimize bilateral trade and issues affecting trade. This means that in the future, specific issues such as tariffs, customs clearance, and technical standards will be subject to permanent consultations for export, rather than relying on ad hoc negotiations every time.
- The Kuala Lumpur joint arrangement is extended until January 10, 2027.The two sides agreed to continue to actively explore solutions on this basis, which is equivalent to locking in a stable window for at least one quarter for the bilateral trade environment-receiving orders, stocking, and locking of cargo in the fourth quarter, which is much more certain than the same period in the past two years.
- The agricultural working group holds its first meeting before the end of the year.Co-chaired by the Ministry of Commerce and the U.S. Trade Negotiations Office to discuss market access and regulatory issues. Factories that make food and agricultural product processing equipment can pay attention to changes in subsequent access lists.
- Artificial intelligence has been included in economic and trade consultations for the first time.The two sides held their first dialogue on AI risks and benefits, and agreed to hold the next dialogue before the end of November and establish communication channels for AI incidents.
3. Another noteworthy trade remedy development during the same week
On September 25, the U.S. International Trade Commission (ITC) imposed anti-dumping and countervailing industrial damage on van semi-trailers and their components imported from Chinaa positive final ruling, determined to cause substantial damage to U.S. industries, the U.S. Department of Commerce will issue a tax order accordingly. The case was filed in January, the Ministry of Commerce was finalised on August 26, and the ITC was finalised on September 25. The process has been completed, and enterprises involved in exporting trailers, trailers and parts must recalculate their costs to the United States at the final tax rate. Source:Trade relief case released from the World Trade Department of the Ministry of Commerce.
On the one hand, the tax reduction list was agreed, and on the other hand, the double anti-dumping hammer for specific categories were dropped. The two messages were not contradictory:Sino-US trade is a combination of "overall institutionalized stability + continued handling of individual cases in accordance with the law."The inspiration to the factory is that we should not use the big words of "good or bad Sino-US relations" to make business decisions, but should calculate them based on our own HS code and specific tax rate.
IV. Three action suggestions for the factory
- Checklist: After both parties formally announce the list of duty-reduced products (8-digit tax code levels), check whether their own export tax code numbers are included one by one. Factories that make toys, home appliances, kitchen and bathroom, and festival supplies have a high probability of benefiting. It is recommended to prepare a "duty-paid cost comparison table before and after tax reduction" in advance and send it to American customers to encourage old customers to replenish their stocks in the fourth quarter.
- Re-talk about terms: For the U.S. line orders and new quotations in hand, the "tariff allocation clauses" should be taken out and reconfirmed. It is best to write in black and white the supplementary agreement how to deal with goods in transit before and after the implementation of the tax reduction.
- Keep an eye on the rhythm: There is a time lag between the two sides "implementing domestic legal procedures and implementing them simultaneously." Do not sign long orders based on the tax reduction price before the detailed rules are announced. You can agree on a flexible clause of "adjusting the tax rate according to the implementation date."
common problems
1. When will the reciprocal tax reduction really be implemented??
The Ministry of Commerce's statement is that "both parties will implement tax reductions simultaneously after fulfilling their respective domestic legal procedures." Based on the past pace, it usually takes several weeks from the publication of the list to the actual implementation. What the factory can do during this period is: lock in the cost calculation model before and after the tax reduction, confirm with the American customer the applicable time point for the tax rate for the order in hand (generally based on the export declaration date or the port arrival date, and a written confirmation with the customer is required), adjust the quotation as soon as possible after the details are announced.
2. Will "30 billion versus 30 billion" cover my products??
The list is determined according to tax number. The US list focuses on consumer goods such as toys, home appliances, baby products, kitchen and bathroom supplies, and holiday gifts. The Chinese list covers agricultural products, personal care products, medical equipment, and coal. The judgment method is very simple: after the list is published, compare it item by item according to your own 8-digit HS code, and do not guess based on the product name. Not being on the list does not mean that there will be no opportunities in the future. Expanding the list after the board mechanism is in normal operation is a common path.
3. After the tax reduction is implemented, will American customers ask for an immediate price reduction??
There is a high probability. In theory, the cost saved by the tax reduction will be enjoyed by the importer, and the buyer will take the initiative to raise it. The factory's response: Consider the tax reduction as an opportunity to renegotiate the overall price, rather than simply transferring profits-a combination of "price fine-tuning + order quantity commitment + account period improvement" can be used to convert the tariff dividend into a more stable long-term order, rather than a one-time price reduction.
--Qihang AI Foreign Trade Research Institute·Let China Intelligent Manufacturing Set sail to the sea| Foreign trade customer consultation: 180-0327-6609
