Importing from China: What You Need to Know

China is the United States’ largest trading partner, consistently providing more than 20% of total U.S. imports. Despite shaky relations between the nations, that trend shows little deviation over time. It is clear that trading between the two nations will continue at high volumes for years to come. It isn’t easy to find new sources for over half a trillion dollars worth of goods after all, so importers will still need to have a strong grasp on the requirements of importing from China. 

There are a few basic guidelines when importing from China, including:

• Dealing with tariffs and restrictions
• Sourcing goods
• Paying for goods
• Arranging shipping
• Finalizing delivery
• Ensuring products meet U.S. guidelines

Understanding the basic concepts associated with how to import from China can help make the import process hassle-free. Our guidelines below can help you learn the process, but getting in touch with one of our licensed customs brokers can make the process even simpler. We'll provide you with the specific help you need when importing from China

Importing from China

2020 saw importing from China become volatile. Global health concerns seriously impacted trade with China, and this created a burden for many seeking to import goods. However, imports from China are still trickling into the U.S. and there are still opportunities for importers.

Some of the most in-demand goods come from China. Many international merchants are seeking to import ventilators, import personal protective equipment, import surgical gloves and intensive care beds and more. We help import all products, including importing isopropyl alcohol, that protect people from illness during the global pandemic.

To keep trade flowing from China to the U.S. some tariffs and regulations have been lifted. This greases the wheels of commerce during times of economic uncertainty. Items you can import from China that are exempt from tariffs include:

• Chest coolers
• Upright freezers
• Plastic drinking straws
• N95 respirators and face masks
• Anesthesia masks

With so many goods exempt from tariffs and surging demand for imported goods, many importers are seizing the opportunity.

If you need help navigating the uncertainty of importing face masks or any other critical need product during this time, our experienced team at USA Customs Clearance, Powered by AFC International, can provide the guidance and assistance you need. With our team of licensed customs brokers and customs clearance consultants, we can answer any questions you may have about the process. 

Understanding the China Section 301 Tariffs

Prior to the outbreak of the pandemic, the Trump administration had been issuing a series of high tariffs on Chinese goods imported into the U.S. Known as the Section 301 tariffs, these were meant to, among other things, reduce the trade deficit between the two nations, encourage domestic manufacturing, and incentivize the Chinese government to respect U.S. companies’ intellectual properties. A rather unsavory consequence of that decision, however, was the escalating trade war that it sparked between China and the U.S. Ultimately, these tariffs have had a massive impact on the import tax of products from China to the U.S. in 2020.

Over time, the U.S. released 4 lists of goods that would be subject to higher tariffs until further notice, which encompass almost every item that can be imported. The tariff rates applied to those goods also increased over time in retaliation to China imposing its own tariffs on U.S. goods. List 4 was going to have two parts, but the second half of the list was called off as a result of positive advancements to the trade discussions between the two nations.

Also in light of the trade discussions, the U.S. has published several lists of goods that were excluded from those tariffs after some consideration. You can also review section 301 tariff exclusions. Importers that imported goods that were excluded can file for a retroactive drawback claim to get refunded for the taxes they may have already paid on the import. 

There’s a lot more to know about the section 301 tariffs in China. For more information, make sure you check out our article on the topic: Section 301 Tariffs: A Comprehensive Guide. If you have questions about whether your goods are subject to these increased tariffs, then reach out to us. We can provide information on exactly which HTS codes are affected by these rules. 

How to Import Wholesale Products From China to the U.S.

When you’re thinking about importing wholesale products from China to the U.S., there are a few questions you might ask yourself. Are my Imports from China marketable and easy to sell? Do my imports from China have profitable margins? Do my imports from China have or bring quality to the market?  Are my suppliers easy to work and communicate with?

Answering these questions can help you source goods. There’s a simple formula to follow when you seek to find products to import from China, MAPS. MAPS is an acronym standing for Marketable, Affordable, Profitable and Sellable. When you find suppliers, keep MAPS in mind.

Marketable

• What makes my import from China unique?
• What are the product’s benefits and economical properties?
• Does my import from China have sustainability?

Affordable

• What does it cost to produce in the U.S.?
• Can I request multiple pricing quotes from a multiple suppliers
• Does a specific supplier specialize in “like” products?

Profitable

• What is my landed cost per unit?
• What does my import from China sell for in the U.S?
• What is the profit margin per unit?
• What is the return on investment?

Sellable

• What demographic am I pursuing?
• Where will my Imports from China sell best?
• Why will my import product be successful?
• Are my imports from China competitive?

Many importers travel to China to meet with Chinese suppliers. Many regions in China specialize in the manufacturing and wholesale of specific goods. Items like furniture from China and toys imported from China have their own markets. China also has unique seasons when manufacturing and importing/exporting are in flux, like Chinese New Year.

If you are unable to travel to China to meet with suppliers, you might want to work with a sourcing agent. A sourcing agent from a trade company will work on your behalf to reach out to suppliers and Chinese factories that manufacture the goods you seek to import. Online global sourcing is also a growing market for those importing from China. Websites like Alibaba.com make it simple to order goods from Chinese suppliers.

You might need to be aware of minimum order quantities (MOQ) when importing from China. Some wholesalers and manufacturers have a low MOQ for small orders, others have a high MOQ for larger orders.

After you have found the items you’d like to import, it’s time to start the process of getting your goods across the border and through customs. This involves a lot of legwork and planning. USA Customs Clearance, Powered by AFC International, is ready to be your strategic partner. We offer import consulting sessions to help you get in the know about what it takes to import goods from China and get your products in the hands of your consumers.

For information on importing fragile items like glass from China, check out our article.

Incoterms from China

Another thing to be aware of when participating in international trade is Incoterms. Incoterms are established commercial regulations that were created by the International Chamber of Commerce (ICC). Incoterms relate to international commercial laws. Incoterms are used in many commercial transactions and the procurement process. Trade councils and international courts both encourage the use of incoterms to make the import process seamless and easy.

Incoterm regulations are designed to communicate the tasks, expenses, and risks associated with importing goods and global trade.

There are 11 established Incoterms you’ll likely need to know when importing from China.

Rules for Modes of Transport and Delivery

• Ex Works (EXW). According to the ICC, EXW refers to when the sellers delivers the goods to the importer’s premises. The buyer loads, clears goods for expert and covers any clearances.
• Free Carrier (FCA). The ICC states that free carrier means the seller delivers the products to the carrier to the named place of delivery.
• Carriage Paid To (CPT). This term means that the supplier delivers the imported products to the buyer’s carrier or to a different agreed upon place, like a warehouse. With this rule, the seller must pay for the cost to bring the goods to the agreed upon place.
• CIP Carriage And Insurance Paid To (CIP). According to the ICC, this term refers to the seller deliversing the imported products to the buyer’s carrier or to another agreed upon place (warehouse, etc.). With this rule, the seller must pay for the cost to bring the goods to the agreed upon place. Additionally, the seller contracts for insurance for minimum coverage. If the buyer wishes to have more coverage, they are responsible.
• Delivered at Terminal (DAT). This term means that goods, once unloaded at the port of arrival or terminal, are at the disposal of the buyer. In this case, the seller bears the risk involved in bringing and unloading the goods at the destination.
• Delivered at Place (DAP). The ICC states that this term means the seller has delivered goods to the buyer’s place of disposal and goods are ready to unloading at the agreed upon destination. The seller takes on all the risks involved in ensuring the goods make it to the agreed upon place.
• Delivered Duty Paid (DDP). This term means the seller delivers goods and clears them for import. The seller takes on all risks and costs associated with bringing all the goods to the agreed upon destination. The seller also pays duty for export and import and oversees customs formalities.

Rules For Inland Waterway and Sea Transport

• Free Alongside Ship (FAS). According to the ICC, FAS means the seller delivers when the goods are alongside the vessel of transport, like on a barge or quay, selected by the buyer at the agreed upon port of entry. In this case, the risk of damage changes when the goods move from the ship to alongside. The buyer assumes all costs from the time the goods are removed from the ship to alongside.
• Free on Board (FOB).  This term refers to the seller delivering foods on board the craft selected by the buyer at the named port of entry. The risk of damage changes when the goods are loaded onto the craft or vessel and the buyer assumes all costs from then onward.
• Cost and Freight (CFR). In this case, the seller is responsible for goods until either on board the vessel or already delivered. Risk of damage or loss stops when the goods are on the vessel and the seller must contract and pay the cost and freight to bring the goods to the port of entry.
• Cost, Insurance and Freight (CIF). According to the ICC, this term refers to the contracting of insurance to cover the buyer’s risk and loss of the goods during transport. Under CIF, the seller is only required to obtain minimum insurance coverage. Any additional coverage is the buyer’s responsibility.

There is a lot to know when it comes to Incoterms. To learn more, check out our article "What Are Incoterms?"

Who Pays for What and What is My Responsibility?

Following established Incoterms from the outset will clearly outline the sourcing responsibilities between you and your supplier. Incoterms define financial responsibilities including who is responsible for import tax from China. In short, Incoterms reduce and remove doubt of what your exact contractual supply chain responsibilities are in the sales process.  

Alternatively, give us a call at (855) 912-0406, and we can chat about the different incoterms and their requirements. We at USA Customs Clearance are here to help with anything. 

Costs for Importing from China

Even though imported goods can be less expensive than domestic goods, there are some additional costs associated with bringing in goods from China. Importing costs you need to know about include:

• Transportation costs. It’s up to either you or the seller (depending on Incoterms used) to move goods from China to the U.S. Transportation by air, sea, rail or truck can add up when importing from China.
• Warehouse, Inspection and Port of Entry Fees. Products imported from China are open to inspection when crossing U.S. borders. In some cases, these inspections can cost you. Depending on the products imported, these fees can add up to unexpected costs. Additionally, you might owe port fees at the time of inspection.
• Customs Broker Fees. Working with a Licensed Customs Broker can help make the import process easy. They can help ensure all fees are paid, permits are obtained and help get your goods cleared for import. There are fees associated with working with a licensed customs broker.
• Agent Fees. When importing from China, customs agents can inspect your goods. This can sometimes result in fees. You can pay these fees at the port of arrival to help get your goods into your warehouse or location.
• Import Duties- This is a major aspect of the importing process that needs to be considered, especially in light of the Section 301 tariffs earlier. Import duties from China to USA can be a major cost. Most products are assessed duty based on the value of the products being imported. For some shipments, the cost of duty can be in the millions.

If you need help with calculating the costs for importing from China, USA Customs Clearance can help with that too. Our licensed brokers are experts that can make sense of all the different factors that influence cost, and can assist you in filling out all the right paperwork too. We've assisted many of our clients with duty mitigation and deferment to help recover and/or delay costly import costs.

Do I Need a Permit to Import from China?

There is no general import permit for importing products from China. However, you might need a permit to import from a federal agency certain goods from China. Different federal agencies oversee different imported products and requirements can vary. As an importer, you must ensure your imported products meet all federal requirements, which sometimes include permits.

Agencies that oversee common imports include:

• Food and Drug Administration (FDA). The FDA oversees the import of all food, medication, cosmetics, some housewares and food-related items, health devices, and more. The FDA requires prior notice be given for all imported food products.
• Environmental Protection Agency (EPA). Chemicals imported into the U.S. are often regulated by the EPA.
• Department of Transportation (DOT). According to information from CBP, imports regulated by the DOT include cars and motor vehicles.  
• Consumer Product Safety Commission (CPSC). Toys and children’s products are among imports regulated by the CPSC.
• Federal Trade Commission (FTC). The FTC oversees a variety of parts of the import process, including product labeling and more.
• U.S Department of Agriculture (USDA). The USDA oversees the import of plants, plant-products, wood, animals and more. In many cases, the USDA requires permits and more.
• Alcohol and Tobacco Trade and Tax Bureau (TTB). The TTB issues permits for importers of alcohol and tobacco products. TTB permits include the Federal Basic Permit, Certification of Label Approval (COLA), Natural Wine Certificate, and Certification of Age and Origin. These permits are required when importing alcohol.

There are countless Partner Government Agencies (PGAs) that importers need to be aware of in order to stay compliant. A customs broker can help you understand all the requirements that apply to your shipment, and can get in touch with all the applicable PGAs on your behalf. 

Paying for Goods Imported from China

You’ll find that importing goods from China isn’t like working with a domestic supplier. You often can’t swipe a credit card for payment, so you’ll need to find other ways to pay. Generally, Chinese suppliers prefer methods of payment that involve working with a bank. 

Common ways to pay for goods include:

• International wire transfer. This is a fairly common method payment for small- to medium-sized transactions. In many cases, international wire transfers are made before the delivery of goods.
• Open account. This method of payment allows the importer to pay for goods after they have been received. The wholesaler or manufacturer extends credit.
• Letter of credit. This method of payment works like a traditional bank loan in many cases. To use this payment method, the buyer’s bank provides a letter stating how much credit is available to the buyer. A letter of credit often functions as a conditional bank guarantee. The buyer’s bank will pay the supplier when the obligations of the letter are met. The buyer will then make payments to the bank to satisfy the line of credit.
• Online escrow. This payment method works like a letter of credit and is commonly used for smaller transactions, including those less than $5,000. You might find that online importers tend to prefer this method of payment.
• Cash advance. This method of payment is considered the most risky and involves cash payment for goods in advance of delivery. This method of payment
• Documentary collection. This works similarly to a cash on delivery (COD) option.  In the case of documentary collection, the seller’s bank will work with the buyer’s bank for the collection of payment. Imported products can be available before or after payment, depending on the method of documentary collection used.

The method of payment you select likely depends on many factors. The seller’s preferred method of payment and the risks and benefits associated with each method might influence your decision. After you pay for your imports, it’s time to arrange shipping. Shipping costs can vary. Many imports from China are shipped via sea freight, however, which is the cheapest option.

Nominations from China

How Do I Get My Freight Moving?

Nominating a licensed, bonded Non-vessel Operating Common Carrier (NVOCC) coupled with  International Freight and Logistics Network (IFLN) agency at the point of origin will help navigate the containerization, ocean carrier, sailing schedules and estimated time of arrival to your destination port of entry. 

There are many things to be aware of when importing from China. When shipping goods from China, you’ll need to think about container fees, product packaging, terminals and handling, customs bonds, and broker fees.

There are a few key terms to know when shipping goods from China:

• Nominations. When importing from China, nominations refer to when the carrier is chosen by the buyer. In this case, the terms of delivery are on an EXW basis according to Incoterms. The buyer nominates a carrier or shipper to deliver goods from the supplier’s factory or warehouse. The buyer arranges how to get the imported goods to the final destination.
• Containerization. When importing products from China, containerization refers to the process of shipping goods in large containers in bulk.
• Ocean carriers. Ocean carriers are the shippers you may nominate to move goods from China to the U.S. There are hundreds of carriers, each serving different terminals and ports of entry.
• Port terminals. Sometimes also called a container terminal, port terminals are facilities where ocean carriers deliver cargo containers. From there, containers can be shipped by rail or truck to the final destination.
• Dock receipt. This term refers to a receipt issued by the ocean carrier to document that a shipment has been received at the carrier’s warehouse or dock facility.
• Freight forwarder. This term refers to the agent responsible for moving cargo to an overseas destination. When importing goods, a freight forwarder can ensure your imported goods make it to the ocean carrier on time.

You might want to ship your imports from China in bulk to save on shipping. Items shipped in bulk from China are often transported in 20-by-40 foot containers. A full cargo container holds approximately 2,400 cubic feet or 800 square feet of goods. A full cargo container can haul 61,000 pounds of goods.

If you plan to ship in bulk from China, you might want to consider either full cargo load (FCL) or loose cargo load (LCL) shipping. If your imports from China are at least 5 pallets, FCL shipping might be the best option. If your cargo is a lesser volume, LCL shipping might better accommodate your needs. When shipping imports via LCL, they will share cargo space with other, similar goods. Your customs broker can also advise you on which option would be best for your shipment, based on risks, cost, and a variety of other factors. 

Shipping from China can take some time. Transit time might take between two weeks and two months. Customs clearance can add to this time. You might estimate that goods shipped in bulk from China will arrive in 2 or 3 months, depending on the circumstance.

You might use air freight rather than sea freight if you are shipping small amounts from China. Air freight is more expensive than sea freight, but also much quicker. Working with a Licensed Customs Broker can help you figure out the best shipping method for you.

Clearing US Customs from China: 

What Are My Responsibilities to the U.S. Government?

Clear Description of goods dictates Duties and Taxes levied against the imports’ commercial value. The Harmonized Tariff Schedule (HTS) lists numbers to determine the duty percentage based on U.S. manufactured goods to ensure a level playing field in the business sectors.

For help classifying your imports, you can work with an experienced customs broker. Most brokers have imported into the U.S. hundreds—if not thousands—of times. They know the process inside and out, and you can count on them to answer any of your questions about tariff classification and importing in general. They rely on information provided and updated by the CBP. 

In addition to an HTS code, you’ll need a few other documents to clear customs with your imports. You will need:

• A receipt or a bill of lading listing the items to be imported.
• An official invoice that lists the country of origin purchase price, and tariff classification of the goods imported.
• A packing list that details the imported goods.
• An arrival notice authorized by a U.S. Customs Agent.

Additionally, a continuous customs bond can help make the import process easier.

If you need help clearing customs due to the import ban on commodities from XUAR, check out our article: What Importers Need to Know About the Xinjiang Import Ban.

Do I Need a Customs Bond When Importing from China?

In many cases, a customs bond is mandatory when importing from China. CBP mandates that you use a customs bond when your imports are valued at more than $2,500 or the imports are subject to another federal agency’s oversight. Those requirements cover almost every type of import. 

A customs bond is basically an insurance policy covering the payment of duties and taxes to the U.S. government when you are importing goods. A customs bond will ensure that duties and taxes are paid, even in extraordinary circumstances. Imports arriving by both air and sea will need a customs bond. You might find that you will be subject to delays and fines if you do not have the correct customs bond when importing from China.

If you elect to work with a Licensed Customs Broker when importing from China, you will be able to use your broker’s bond to secure your transaction. This can save you time and money, and you can rely on the broker’s import reputation to get your goods through customs faster. At USA Customs Clearance, powered by AFC International, you can count on our customs brokers to get things done right.

It’s important to know there are 2 kinds of customs bonds you can choose from when importing from China: Single entry bonds and continuous bonds. The bond type you choose will likely depend on how often you plan to import goods from China into the U.S. The difference between the bond types is simple. Basically,  a continuous bond will cover all the shipments you import during a one-year period. A single entry customs bond will only cover a single shipment of imported goods into the U.S.

• Continuous bonds are considered simpler than single entry bonds. To get a continuous entry customs bond, you will pay for at least $50,00 in coverage. It is often more economical to purchase a continuous bond if you plan to import multiple shipments during a calendar year. A continuous bond also covers the Importer Security Filings (ISF) requirements you might be subject to, so no additional bond is required. Prices for continuous bonds can vary.
• Single entry customs bonds can be a bit more complicated than buying a continuous bond. The minimum amount of the single entry bond you purchase is required to be worth at least the value of the goods, plus the taxes, duties and fees you will owe on them. Additionally, if the goods you are importing are subject to oversight from another federal agency, the bond must be worth at least three times the value of the goods imported. For example, if you are importing $7,000 worth of electronic goods that are subject to regulations from the Federal Communications Commission (FCC), you will be required to purchase a bond worth at least $21,000 to fulfill this obligation.  You also might find that the cost of a single entry bond can vary by surety company you chose to work with. Additionally, you are required to have supplementary bond coverage to meet ISF mandates if you are shipping your imports from China by sea.

If you are purchasing a bond on your own, you should keep in mind that you are buying an insurance policy for the taxes and duties on your imported goods, so costs will vary. However, you can secure a customs bond for just $275 on USA Customs Clearance, and that’s the first step towards getting your shipments covered. 

China Import Consulting With a Licensed Customs Broker

A Licensed Customs Broker can be a great asset to you when you are importing from China. They will make sure that your imported goods effectively cross borders and arrive at the port of entry in a timely manner. In addition to that, they can help you ensure that your shipment of imported goods follows all customs regulations and rules when entering the country. They will work you through the process step-by-step to make sure the import process goes smoothly and efficiently.

Your Licensed Customs Broker can provide a variety of services when importing from China. These services might include:

• Arrange customs clearance for imported goods at the port of entry.
• Prepare for the release of goods imported from China.
• Make sure that products and goods imported enter the country efficiently.
• Work with CBP to ensure that all government duties, taxes and fees are paid as needed.
• Determine which permits are required to import your goods and help you with obtaining the needed permits.
• Advise you through the import process, including determining entry options for your goods, navigating free-trade agreements, and tax or duty deferment.

Taking advantage of China Import Consulting services through USA Customs Clearance is a wise move. Our Licensed Customs Brokers will go over all of the necessary details for your shipment and ensure it's compliant with CBP and other regulations.

Delivery of Goods from China

How Do I Receive My Goods to My Place of Business?

After the goods have cleared clearance and have been released by CBP,  a Drayman with a Terminal Worker Identification Card (TWIC) and an Interchange agreement with the ocean carrier will set an appointment to schedule to pick up and deliver your imported goods to your place of business. Your imports might be shipped on a train to a location closer to you. From there, you can have your goods shipped on a truck to your warehouse or retail location.

Basic Things to Keep in Mind When Importing from China

There are a few more basic things to keep in mind when importing products from China. Questions you might want to ask yourself include:

• Can these goods be legally imported? Some imports from China have special rules around them. Your Licensed Customs Broker can help you determine if your products are legal for import.
• Will you be responsible for shipping costs? Depending on the Incoterms followed, you or the seller might be responsible for shipping costs and the assumed risks. Be sure to work with the seller to determine the Incoterms followed to make the most of your transaction. Shipping options might include ocean freight, air freight, international postal service or courier service, depending on the product imported and the size of your order.
• Is the product information informative and clear? Make sure you have all the details on your imported goods. Providing inaccurate information about the goods and their value to CBP is illegal. Make sure you have correct and accurate information about your imported goods.
• Are you following proper customs procedures? Your licensed customs broker can help ensure all customs procedures are met and all regulations are satisfied.
• Do I need product liability insurance? Product liability insurance can cover you from losses coming from defects in products. If you are importing products from China, you might want to discuss product liability insurance with an insurance professional.
• Do I have the right customs bond? There are two options for customs bonds. Make sure you’ve selected the right bond for your business. A continuous bond can make the import process simple. Your Licensed Customs Broker can help ensure you get the proper customs bond.

Get Help Importing From China

Importing from China can be a lucrative, exciting and, at times, challenging endeavor. Allow USA Customs Clearance to help manage challenging times while you enjoy the lucrative ones.

Working with a customs specialist from USA Customs can help ensure that you have all the proper documents in place to make importing from China seamless and easy. 

Give us a call at (855) 912-0406 and you’ll instantly be in touch with a customs specialist who can get you the information you need right now.