After a lot of research, discussion, and deliberation, your company has made the decision that importing machinery into the United States from another country is a sound business decision. You’ve never attempted such an undertaking before, and you want to be armed with as much information as possible before you do.
When importing machinery into the U.S., you’ll need to comply with government regulations. Most machinery will be subject to EPA regulations, which means you’ll need to complete EPA form 3520-21. You’ll also need a customs bond. A licensed customs broker can assist with required documents and clearing your goods.
In this detailed guide, we will go in-depth and explore all it takes to import machinery into the U.S. From understanding the types of machinery to the government regulations and import duty as well as a step-by-step guide on importing machinery, it’s all here.
You may wonder, why import these machines in the first place? Doesn’t the U.S. produce some of this machinery already? Couldn’t they?
Here are the many reasons why importing and exporting machinery into the U.S. makes sense.
While the United States is the land of plenty, we don’t have everything on the face of the earth, as mentioned. Sometimes, lacking resources makes it difficult to build the above-mentioned machinery, at least to the necessary standards. For that reason, it’s smarter and more efficient to rely on imports.
Another great reason to import agricultural machinery and spare parts from countries like China? Our government, as well as the governments in these countries, encourage the trading and importation process to occur. These arrangements can strengthen bonds between countries.
The U.S.deals with the most imports at a rate of $2.2 billion. That’s followed by China at $1.5 billion, Germany at $1.05 billion, the United Kingdom at $635 million, and Japan at $606 million. The rest of the countries on that list are France, Hong Kong, the Netherlands, Canada, and South Korea.
Since the U.S. is one of the top receivers of imported goods, just which parts of the world do they deal with the most frequently? Unsurprisingly, China is our main trading partner, doing $502 billion worth of business a year. From clothes, machinery, smartphones, and computers, China sends a lot of things our way.
Next, there’s Canada at $302 billion. This country also lends us machinery as well as oil and vehicles.
Here’s a breakdown of other major trading partners of the U.S.:
In many instances, it actually costs less money for the United States to outright buy something from another country and pay to have it imported than to produce it on its own. If that’s the case, then it wouldn’t make any sense for our country to start producing goods like machinery, some vehicles, and certain pharmaceuticals when we can get them elsewhere. We’d lose money by doing so. There’s also the issue of demand…
Demand can go both ways depending on the season, consumer interest, and the item in question. In some cases, the demand for a certain good can get so high that our country cannot possibly produce enough of the good to meet that demand. Rather than turn customers away, which isn’t a smart business move, the U.S. decides to rely on the help of other top trading countries and import through them. This keeps up the supply of the product so customers remain happy.
As we said, demand goes both ways. In some cases, demand can drop so low that it doesn’t make sense for the U.S. to produce some items in our country. Again, we’d lose money doing so. However, there’s still a need for these goods, no matter how small. Thus, it’s more cost-effective to buy and import.
There are many things to be aware of when importing machinery. One thing to keep in mind is possible government regulations. Your imports might require extra documentation and inspection by certain government agencies to meet requirements.
For example, if your machinery is related to the medical industry, your imports might be subject to regulations set by the U.S. Food and Drug Administration. If you’re importing electronic machinery, your imports might be subject to regulations set by the Federal Communications Commission. Tractors are subject to regulations set by the Environmental Protection Agency.
Working with a Licensed Customs Broker is crucial when importing machinery. They can help you keep up with changing laws and help determine the correct clearance documents, licenses and certificates needed to import machinery and other goods.
Before you begin to import machinery from China, Canada, or other parts of the world, you need certain documentation. There are four documents, in particular, you must have for the importation to go smoothly.
The first of the four documents you must possess is an arrival notice. A shipping agent or carrier should take care of setting up the arrival notice. Then they pass it along to the consignee or recipient. The arrival notice tells the recipient that their machinery or other good has made it to its destination.
The form might also include such information as pickup charges, how many cargo units got transported, and what those units include.
Next, there’s the bill of lading. Again, the carrier sends this out, this time to an agent, captain, or goods owner. The bill of lading is like a sort of written promise. It lets the recipient know where the item is going, how, and when. The transportation conditions are laid out in this document as well.
The shipper or freight forwarder sends out the packing list. This contains all the information on the invoice and then some. A CBP officer will often review the packing list and even the invoice before the goods ship out.
Speaking of the invoice, don’t forget this! For your invoice to be considered complete, please make sure it has this information:
You’ll need a customs bond when importing machinery. There are two different kinds of customs bonds: continuous bonds and single-entry bonds. When considering bond types, you should consider how often you plan to import goods. Customs bonds are like an insurance policy that promises that custom duty and other fees will be paid.
It’s easy to obtain a customs bond through USA Customs Clearance.
Next, let’s explain the importing process as machinery goes from China to the U.S.
First, there are several provinces and cities in China that act as the top machinery manufacturers. These are as follows:
With that out of the way, here are the steps to follow to begin importing machinery like tractors as well as custom or replacement parts into the U.S. from China.
If the products shipped to the United States fall under the category of factory products, then they should get added to a product specification list. This is essentially a list of pertinent product details and related information. It should include export packaging and certifications, such as those from ASTM or CE Machine Directive.
You also want detailed info about the good as well as its weight, included software, the control system, its protection class, efficiency percentage, power in watts, and the voltage. Its function, motor, usage, and model also must go into the technical specifications.
When shipping out machinery, agricultural products, and vehicles, these must pass consensus standards. This applies when shipping products to parts of the world like India, Australia, the U.S., and Europe.
If your product fails to pass these standards, then one of several things can happen. First, you could get hit with a very expensive fine. Secondly, you’re at risk of a mandatory recall. Also, customs might claim your item and bar it from shipping to its destination.
If the machinery came from China, then more than likely, it does not pass the standards for electrical safety or mechanical safety in the U.S. or Europe, at least not right off the bat. In the U.S., ASTM dictates the standards of what can come into that country. Depending on the type of machinery you want to ship, the standards do vary. We could write a whole different article on those standards, so for now, we’ll just share a list here courtesy of ASTM International.
In some instances, other, smaller organizations also have their own standards that you must meet. These organizations include the Underwriters Laboratories, Inc. or UL, the National Fire Prevention Association or NFPA, the Instrument Society of America or ISA, the Robotics Industry of America or RIA, and the American National Standards Institute or ANSI.
As some of the names of these organizations may indicate, not all have to do with shipping machinery. For those that do, we recommend doubling down on the rules and standards to ensure your product meets or surpasses them all.
Next, before the machinery ever goes out, you must get a test report pertaining to the safety of the good. If you haven’t already tested your products via a third party, you will now have to. This third party will do lab testing, but this doesn’t come cheap. Per product, the testing is priced at about $10,000 USD.
Still, you can’t get by without a test report, so it’s important to test at least some of the machinery sold to the U.S. If you have a slim budget, then stick to the products most desirable by U.S. companies. Then, only offer customers those products since your others couldn’t ship without a battle with customs.
When you get a test report, it needs five things. These are any regulations on product usage, the issuing date of the report, the manufacturer of the product, the issuing company, and a product ID, known as an SKU.
Depending on the Chinese business, some do have multi-year warranties. If the supplier in question does the same, determining so would be the next step. If you could get spare parts, for instance, it’s often on the U.S. customer to cover the costs for freight. Not only does this cost a lot, but the length of time one could spend waiting for the parts to arrive makes it easier to just get them in the U.S. if possible.
Sometimes, even larger items like vehicles and machinery don’t get tested for quality before they’re shipped to the United States. You might want to make sure the good in question does receive testing for quality control. If it doesn’t and it arrives to you broken or defective, it’s often hard to ship the item back. China can block the shipment, and they don’t always readily offer refunds. Be smart.
If the product has passed all the steps above, then it can be prepared for shipment to the U.S. The item must pass customs. We already talked above about which items can and can’t get shipped, so you should know whether your machinery will get stuck in a customs mess or arrive at your business’ front door.
The import duty in machinery from China is the tax paid when your imports are transported across international borders. This is a tariff that is paid at the time of import by the importer of record. The importer of record is generally the purchaser of goods or the seller of goods, it depends on the arrangement made when the goods were purchased. Customs authorities ensure the duties are paid.
You can calculate the import duty for your imports by using the Harmonized Tariff Schedule, also called the HTS. This robust document is a global system that is used by the World Trade Organization to determine duties. The duty set by the HTS is generally a percentage of the import’s value. It is either set at a per pound rate or a per-piece rate.
In most cases, the duty on imports coming from China is 3 to 25 percent. Your Licensed Customs Broker can help you determine the import duty when you purchase a customs bond.
What if you looked into the above and decided it was too much trouble? Perhaps you’d rather just ship your machinery from Canada instead. Given Canada’s proximity to the U.S., you’d save money in many ways. From shipping costs to import duty and everything in between, the savings would be quite significant.
That said, you may not have as many machinery options in Canada as you do in China. Still, if you can find what you need, then, by all means, order the machinery through a Canadian brand. Then check out these steps of what’s necessary when importing machinery from Canada to the U.S.
U.S. customs need a PAPS number, which doubles as a shipping control number. Then, they pass this information to customs brokers so the shipment gets approved.
From there, with the information provided from the PAPS number, the trucking company creates a trucker’s shipment manifest. This lets the trucking company know exact information on the machinery shipment in progress.
The manifest moves on to U.S. customs, who get the document ahead of the item shipment. If the item gets held up for any reason, it’d be at this point. If all goes well, then the shipment will begin moving.
Before the shipment arrives to you, your supplier might ask for data like a truck waybill, a commercial invoice, or confirmation of the PAPS number. These documents let the machinery order pass through customs.
Now, you sit back and wait while the item arrives in the United States. In some instances, trucking companies extend the customs border checkpoint to get clearance through a warehouse. This is known as an immediate transport setup. By doing this, it cost you more money (up to $100 more) and does slow down shipping progress. Still, it can happen, so you should be aware of it.
The North American Free Trade Agreement or NAFTA dictates that if your goods were produced entirely in Canada that you do not have to pay duty on them. A NAFTA Certificate of Origin proves the authenticity of the item. If the company in which you bought the machinery from doesn’t have such a certificate, then you may get charged for duty fees.
There are many types of machinery that can be imported into the U.S. Tractors are commonly imported. A type of engineering vehicle, tractors have a role in construction and agriculture. While they don't travel quickly, their high torque allows them to pull machinery and trailers. They can also tow vehicles, as seen most often in farming.
Tractor manufacturers are located around the world. This means importing can be essential. Many tractors are imported from China and Japan. Canada is also a major exporter of tractors into the U.S. European tractors are also common.
The process for importing a tractor from Europe is similar to importing from China or Canada. It is important to know that each European country has its own set of rules and regulations for exporting goods, including tractors and machinery. You might be subject to Europe’s value-added tax (VAT) regulations.
The best way to navigate importing machinery and tractors from Europe is to work with a Licensed Customs Broker. USA Customs Clearance offers consulting services and bonds to help you make sense of the importing process.
Importing tractors from China is just like importing other machinery. You’ll need technical specifications of your tractor. You’ll need to document that your tractor meets standards of the EPA and passes other safety standards. You’ll need to get a test report. Parts replacements and warranties must be determined. Quality control and testing are essential.
The best way to navigate importing machinery and tractors from China is to work with a Licensed Customs Broker. USA Customs Clearance offers consulting services and bonds to help you make sense of the importing process.
Tractors aren’t the only kind of machinery commonly imported into the U.S. There is a wide range of imported machines in the U.S. Other types of machinery making their way onto U.S. soil from abroad include:
Injection Molding Machines
Injection molding machines also go by the name injection presses. Each machine has a clamping unit and an injection unit. When both these parts work in conjunction with one another, it's possible to produce plastic with an injection molding machine.
Printing and Packing Machinery
With printing and packing machinery, it's easier to create labels and pack orders than ever before. Rather than relying on humans to do this job, machinery units take care of the brunt of the work instead. Not only can this increase the speed and efficiency of printing and packing, but machine work reduces the rate of human error as well.
A desirable piece of equipment, 3D printing technology is on the cusp of a boom. To use a 3D printer, first, the desired item gets drawn and visualized on a computer screen. Then, the item can come to life as envisioned. Fused deposition modeling is a type of 3D printing in which material extrusion occurs. According to Statista, per data from 2018, up to 46 percent of 3D printers rely on material extrusion.
Also referred to as a welding power supply, a welding machine uses currents to weld metal items together. Whether through inverter, alternator, generator, or transformer power, welding has many everyday applications in construction and building.
The process of roll-forming is another type of metalworking, much like welding. This time, the machine takes a sheet metal strip, often a lengthy one, and bends it until it creates a cross-section. With a roll-forming machine, you can feed it metal of different thicknesses and sizes and get accurate results each time.
Food Production and Agriculture Machines
A slew of food production and agricultural machines exist that help those in the foods and farming industries each day. From machines that can convert oils from olives and otherwise extract liquids from solids, the speed and accuracy of these machines is non-negotiable.
Another device that can chop down metals is a laser-cutting machine. With laser cutting, a precision optic laser beam will vaporize, burn, or melt the metal or other material until it's in the desired shape. These machines come in handy most for making piping and structural materials.
In the same vein as a laser-cutting machine is a computer numerical control or CNC machine. With this device, a computer determines the tools used for cutting, such as lathes, boring tools, or drills. You can use a variety of materials for cutting with a CNC machine, among them composite, ceramic, wood, plastic, and metal.
A wheel loader or simply a loader is a type of heavy equipment that can move weighty materials. From woodchips, sand, rocks, recyclables, raw minerals, logs, gravel, feed, snow, dirt, and asphalt, wheel loaders move them all. In most instances, the loader passes these heavy materials to a railroad car, feed-hopper, conveyor belt, or dump truck for further traveling or processing.
If the above sounded somewhat confusing at points, that’s fair. Importing machinery isn’t like buying and shipping smaller, more manageable items across borders. That’s why some businesses opt to work with a Licensed Customs Broker.
The area of customs brokerage deals with shipping and delivering items like machinery. A customs broker can work on behalf of companies and even people. If you’re looking to hire a customs broker, they often work at a customs brokerage firm. The staff at these firms maintain a working knowledge of regulations and rules for shipping items from countries across the world to the U.S.
With their knowledge and expertise, shipping items or getting goods shipped to you becomes much less of a hassle. Some customs brokers even possess language translation skills and can communicate with Chinese businesses when maybe you can’t.
What a custom broker or firm will charge depends. They receive their money from a brokerage fee. This fee considers the shipment value and then takes a chunk from that value. Thus, the more expensive the shipment, the more money a customs broker would make.
It’s not necessary by any means to hire a customs brokerage firm, but it’s something you might consider if navigating the world of foreign importation for the first time.
There are many reasons a U.S. company might decide to import goods like machinery from China. They can often save money compared to producing the goods themselves. Importing can also account for a high or even a low demand.
If you’ve decided to import machinery, the rules and steps we covered in this article should make choosing, buying, and receiving your machinery far easier. You can always rely on the assistance of a customs broker if need be.
Make importing machinery easy and hassle-free. USA Customs Clearance offers value-added customs brokerage services. We make it easy to import machinery into any U.S. port of entry. If you have any questions, or you’d like to get started, reach out to us and we’ll guide you through the process.