import from China to USA

Import From China To USA 2019: Process & Taxes


Import from China to USA, it’s an unfamiliar thing for me one year ago because my mainly cooperated customers are from South America. Now as a china sourcing agent, this is the market that I love to work with, after helping some U.S. customers import products from China, I know how it is difficult and which problem you will face especially for the new importers.

There is a Chinese old saying: “The journey of a thousand miles begins with a single step.”
This is good advice. If you break up your task into little steps and focus on each one of them at a time, you will be importing your first shipment from China to the USA before you know it.

Based on my experience and studying, I’d like to share with you all related Key information in two parts with 10 steps.
By reading this article, you will avoid most confusing things, puzzles, and traps of importing from China to the USA.

Preparation: Before importing from China

1, Identify the products which you want to import from China

Here some tips for the best products to import from China:
Pick Products You Know: the products you are familiar with or the products that you are interesting.

Choose Unique/Customized product, not common Items: for examples, if you want wholesale rain boots from China, then you’d better choose the style with special design, not with the normal style.

Go with High-Value and Small Size Products: consider the shipping cost from China to the USA, I always suggest my customer start with small size products.

Make Your brand Products: it may be a little difficult or cost more at the beginning, but trust me, it deserves, you will get a return in the future.

Products to Avoid
Do not start with famous brand products: brand products are expensive with a low-profit margin, and you need to import a large volume which needs huge capital, it’s not suitable for new importers.

famous brand products

Do not import counterfeit products: illegal things...never walk on the dangerous road.

Meanwhile, please check if your products are prohibited, restricted, anti-dumping goods to your country.

For new importers, I also don’t suggest to import food from China to the US.

Related article you may also interest:How to import from China (The Newest Guide 2019)

 

2, Find reliable Chinese suppliers for your products

Work with reliable Chinese suppliers will save you huge money and time.

A reliable Chinese supplier should at least have the following characters:
2.1, They have the responsibility: once any problems happen, they know how to solve it. They will not only consider themselves but also stand at your point to solve the problem.

2.2, Communication in time: let you know the truth and the requirement which you ask in time, no matter the result is good or not.
For example, one of my customers, they work with one factory directly before, the factory didn't tell him about the production problem until the last day of shipment, because of this, the customer lost a lot, they even didn't have enough time to make a new purchase order.

2.3, Good experience: familiar with products, they understand what you need. Once you have any change in the products, they will give you good suggestions.

2.4. The right balance between quality and price: you will pay what you get.

Find Chinese suppliers from Alibaba is a good choice for new importers, which I love a lot to recommend for my customers:

More details about how to find a reliable Chinese supplier from Alibaba, please click here:How to find good suppliers in alibaba

Last month, US President Donald Trump announced tariffs on another $300 billion of Chinese imports, and almost all goods imported from China to the United States would be subject to import duties.

However, simply transferring orders to other countries is very difficult: either the product has no manufacturer outside of China, or the purchase price is more expensive from other countries. Therefore, your choice is most likely to transfer new tariffs to your customers or ask your Chinese suppliers to lower prices, or do not currently make purchase orders. We know that the international business has been affected, but it never stopped, right?

Now, let’s move to the next step:

 

3, Check tax/duty for your products

U.S. Customs and Border Protection (CBP) collects the tax on imports. The agency typically requires importers to pay duties within 10 days of their shipments clearing customs. There are two kinds of entry to the US:

Informal Entry
An informal entry is the entry of goods valued under $2,500, and does not need to be cleared by a customs bond, informal entries are used for both personal and commercial importations.

Informal entries may not be used for commercial importations of goods subject to quota, Anti-dumping or Countervailing duties.

more details, click here

https://help.cbp.gov/app/answers/detail/a_id/215/kw/valued%20under%20%242%2C500

Formal Entry
A formal entry is the entry of goods valued over $2,500, and needs to be cleared by a customs bond. This type of entry is used for commercial importations only

To import goods valued above $2,500, the individual or business must have a Tax ID (or EIN). This is assigned by the IRS to US citizens and companies.

If you are the first time to import from China to the US, then I suggest you must hire a licensed customs broker, who can make your importation process much easier.

A good customs broker will
* help in communication between you and the U.S. government,
* fills out and files the necessary paperwork,
* help you know the import regulations.
* estimate import costs and how long the import process will take.

For a Customs Broker to service an importer, the importer has to sign a power of attorney, authorizing the Customs Broker to clear the cargo on your behalf.

Tips: 3.1, by searching from the website for the National Customs Brokers and Forwarders Association of America, you can find a certified broker.

3.2, The Customs Bond must be purchased before the cargo departs from the China Port of Loading (i.e., Guangzhou or Shenzhen).

How to check US import tariff rate?
Customs Duty = Customs Value * Duty Rate
Tariffs vary from different products, declared values, and country of origin.

Declared value: the declared value should be indicated on the commercial invoice, based on FOB price. Make sure to declare the correct value on the CI.

Real story about the declared value: one US customer import jewelry from China, they made low declarations and hope to reduce the cost of goods, but when the goods went through the US Customs, it was transferred to the inspection department, except charge thousands of dollars for inspection fees, they pay more tax fee. Pay big attention to this!!!!!!!!

The duty rate is based on H.S code, As I mentioned in many "importing from China" article, the HS (coordinating commodity description and coding systems) code specifies the type of product.

You can check the HS code through the following way:
* Check with your China supplier or manufacturer, especially when they have shipped to their other American customers.
* online check - on the US Customs
* Ask your Customs agent to provide

let's study how to check the duty rate: by visiting the official US Harmonized Tariff Schedule: https://hts.usitc.gov/ ( you can use HS code or just the product name to know the import tariff)

US Harmonized Tariff Schedule

For example, we search H.S code 4202.11.00 of luggage. When referring to the Harmonized Tariff Schedule, you’ll notice two different columns: General and Special, China belongs to General columns.
We can see that the general duty rate is 8%. However, there is a “/” following, when you point "/", it will show to see 9903.88.03

us tax duty rate

Now, we search 9903.88.03 to check, it explains: The duty provided in the applicable subheading + 25%, so, for the new tariff, it comes to 33% for luggage.

HTS search

 

4. Check the product compliance requirements in the USA

Make sure you can legally import your chosen item. Most items will be allowed, but certain guidelines must be followed for some types of items. The U.S federal agencies specify the safety regulations and standards on each product category.

If you are an Amazon seller, besides the national standards, you also need to know which products require pre-approval before you can sell them on Amazon, click here to know the FBA product restrictions: https://sellercentral.amazon.com/gp/help/external/200140860?language=en-US&ref=efph_200140860_cont_200164330

The specific licenses needed for each good may come from different government agencies. You can find which licenses you need by visiting the US Customs and Border Patrol's website and searching for "licenses and permits."

Work with your customs broker to double confirm which licenses and permits you will need. Apply for them through the appropriate US government channels and wait for your application to be accepted before placing an import order.
Here I will list some regulations which affect everyone :

Children’s products: CPC (Children’s Product Certificate)

children Product Certificate

Electrical and electronic products: FCC compliant (Federal Communications Commission) United States Electrical and Electronic Equipment Compliance Requirements, click here to know the details: https://nvlpubs.nist.gov/nistpubs/ir/2017/NIST.IR.8118r1.pdf

Kitchen & Dining products: California Proposition 65

Food Contact Materials Testing: FDA CFR 21

Apparel and textile products: many federal agencies administering relevant regulations, click here to know the details: https://nvlpubs.nist.gov/nistpubs/ir/2016/NIST.IR.8115.pdf

Food, cosmetics, etc: FDA compliant (Food and Drug Administration)
Click here to know if your products are under FDA regulations: https://www.fda.gov/industry/fda-basics-industry/how-do-i-know-if-my-product-regulated-fda

Keep in mind that it’s always the importer’s responsibility to ensure compliance with all applicable safety standards and regulations.

5, Checking the shipping way and cost of your products

There are mainly four ways to ship from China to the USA, you can choose according to your products size, value and time of delivery.

1. Via international Express companies, like FedEx, UPS or DHL
After your China supplier sends out the products, you will get a tracking no., with this, you can check the detail from the official website of the express company. In most situation, you don't need to worry about Customs clearance problem, just need to wait for your parcel at home.
Suitable for products between 1-1000 lbs (less than 500kgs)
very fast and reliable, need about 4-7 days from China to the USA.

2. International Postal Service
Only when Goods value is lower than $2,500, you can use this service. Meantime, be sure that your products are legal, and check if your products need licenses or permit to be sent via U.S Postal.
Suitable for small parcels less than 2kg, and low- value products.
Very economical
Compared with FedEx/UPS, it needs more time to delivery, normally need at least half month or more. one unhappy thing: parcel lost happens, and it's hard for you to find it anymore, once you didn't buy insurance or didn't pay extra money to get a tracking no.

If you use the following two way to ship out your goods from China to the USA, then you need to hire a freight forwarder. You can check with your forwarder the freight fee, or even the regulations or related requirements of your products...

3, Ship the goods by air, from China to the USA
When your products are over 500kgs (1,000 lbs ), air freight is a better choice than express, will be much cheaper compared with international express.
time: normally about 7-10 days

 

4, Ship the goods by sea, from China to the USA
When the volume of your goods is over 2CBM, it is more economical to use sea freight. The cost of sea freight is usually 80% lower than that of international express or air freight.
It needs about 25-40 days to get to the US port from China port.
Detailed video if you want to ship out the goods by sea:

 

The cost of your product includes:
Product price ( we already know from our potential Chinese suppliers)
import duties, customs fees ( we get information from the government website or your Customs broker agent)
Shipping fee (we know from our freight forwarder agent)
insurance fees (we know from our freight forwarder agent)
other related fees like service fee…(from the different agents)

Bingo!!!
From the preparation part, we already know product cost, related product compliance requirements and make related certificate if need, now we are ready and have the confidence to importing products from China to US,let’s get starting:

 

Strategy: Importing from China to the USA

6, Order the sample and verify the factory

We always say: seeing is believing, but is not through a screen, right? So, you must require samples from your potential China suppliers, to know the quality of the products (Many new importers neglect this step), trust me, the picture all looks good and almost same, only the sample you received can tell you the truth.

Keep in mind when you ask for a sample you always need to pay for freight fee, for low-value products, most factory will not charge the sample fee. For some special custom-made sample, for example, you need customized jewelry, add your logo, factory need to make new mold for this sample. The factory will charge this sample fee,
but most can be returned after you make the purchase order. Confirm with your supplier when you are ordering the sample.

You should always have plan B for your project, so require samples from at least 2 suppliers, after comparing, you will know which supplier you will place a test order first or formal order.

Before placing an order, I strongly suggest you make factory verify. You can do this through following way:
1, You come to China to visit these manufacturers which you are interesting.

2, Find a Quality control company, like BV, SGS, they can help you make factory verify. Normally they will charge about $350 per day.

3, Cooperated with China sourcing agent: Bling sourcing is a professional China sourcing agent, we can help you import from China, like factory audit, find the reliable suppliers for your products with reasonable price, order follow up, quality control, and goods shipping.
About samples, if you want to make your brand, we can support you with sample development; if you choose 2 or more supplier’s sample, we can help you check and combine all the samples and send together, which will help you save the shipping cost.

Important: Samples sending are a different situation
You should declare your samples at a low value or NO VALUE because they are simply for your evaluation and order decision.
You can declare samples with value (1$) and mention on the sample Invoice: “Samples above without any Commercial Value”. Your China supplier should put this information on the sample invoice.

7, Make a purchase order and make payment

A purchase order (PO): issued by a buyer to a seller (China suppliers),
which should include company information, shipping details, vendor information, order information (the type of item, the quantity, agreed-upon price), and other details like payment information, delivery date, packing, etc.

purchase order

Once you send your purchase order to your China supplier, they will send you a PI for making the deposit.

Following are some methods of payment :

T/T payment (Telegraphic Transfer)
It is a fast way of transferring money overseas through banks. This is the most common payment way for Chinese suppliers: 30% deposit T/T in advance, 70% balance will be paid when the goods are ready and before shipment.

Telegraphic Transfer payment

PayPal, Money Gram and Western Union
This is the popular payment way for test order of small amount purchase order, for example, the order amount is below $5,000. Many buyers like to use PayPal when the order amount is less than $1000.

Letters of Credit
Letters of credit (LCs) is one of the most secure payment ways. It's more suitable for the order amount above $20,000, because of high bank service charge and complicated procedure.

Open Account
An open account transaction is a sale where the goods are shipped and delivered before payment is done, normally in 30, 60 or 90 days. This is one of the most advantageous options to the importer in terms of cash flow and cost, but it is also one of the highest risk options for an exporter.
Normally happened between importers with a good reputation and large factories, which will cooperate in a long time.

Note: all products must have "made in China" label when you import products from China to the USA. The products you purchased must follow all mandatory labeling requirements. The exact requirements label depends on the product, here list some for your reference:

Children’s Products: Warning Label/ CPSIA Tracking Label/ Country of Origin
Electronics: FCC Mark/ Country of Origin
Apparel: Fiber Composition/ Care Instructions/ Flammability Warning/ Country of Origin

 

8, Quality Control

Quality control is a must-do thing for most shipments, especially for new importers, or when you cooperate with new suppliers. When mentioning about quality control, there have too many things to say, you may also hear about thousands of story about quality problem.

quality control inspection

I will suggest 3 key points for you to follow:

1. Make clear about your quality standard
The common way: International Acceptable Quality Limit (AQL) Standards for quality inspections.
following the sample, or some special requirements which you need.

For example, one of my customers, making customized products, his standard is 100% good, can't accept any defect products. So, our QC inspector needs to check the products one by one, following exactly the sample.

2. Not only focus on final inspections
For the customized or personalized products, think about: how to deal with if the products have a quality problem at the final inspections? re-work of the goods, re-production, or even cancel the purchase order? if you have inspected the goods during the production progress, issues can be found and settle correctly in the early stage, I can say, you can avoid 80% of the problem.

3. Quality control/Inspection is a must-do thing
You should write down inspection instruction at your purchase order, for example, some of my customers will always write: Quality inspection required before shipment. Let factory knows about your requirement.

Same as the above verify the factory, which you can also use the same way to work with quality control/ inspection.
By the way, Once you cooperate with Bling Sourcing, we will only charge the service fee when you confirmed the purchase order, we will provide three extra services without charge: order following up, quality inspection and arrange goods shipping.

 

9, Goods shipping and Documents prepare

After you confirm the shipping way and cost, your cooperated freight forwarder agent will arrange the shipping according to the time of production. Your forwarder agent will collect the goods at the named place, or your China suppliers send goods at one designated place.

For example, FOB SHENZHEN, factory need send the container to the Shenzhen port(by FCL) or to your freight forwarder's designated Shenzhen warehouse(less than FCL). EXW: your forwarder will collect the goods at your supplier's factory.

goods shipping from China to USA

Documents required for customs clearance
Bill of Lading (B/L): issued by a carrier or their agent, like freight forwarder agent

Commercial Invoice: keep in mind which we have also mentioned above, CBP will collect customs duty based on the declared value found on the commercial invoice.

Packing List: packing details

Arrival Notice: issued by the freight carrier, and used to inform the importer of record that the goods have arrived at the U.S border.

Wooden package: need to provide a fumigation certificate. If there is no wooden packaging, you must declare non-wood packaging (NON-WOOD PACKING) on all documents.
When the goods are shipped by sea, pay big attention to two following document:

AMS (Automatic Manifest System) - Must be completed 72 hours before vessel sail. If not, your cargo will not be loaded and importers increase their chance of inspection and fines.
Import Security filing (ISF).: You must provide ISF document to US Customs. You or your Custom broker should provide this document no later than 24 hours before the ship's arrival at a U.S. port.
Tips: If ISF is not provided by either you or your broker, you may have to pay a $5,000 fine.
More details, please click here: https://www.cbp.gov/sites/default/files/documents/import_sf_carry_3.pdf

 

10. Receiving goods at your home

Now we have come to the most exciting and last step, what do we need to do?
in a simple word, there are two things and related instructions that you or your agent need to pay attention:
Pass import clearance and Pay your import duties.

10. 1, Vessel Arrival: Notify Customs on the day the ship arrives at the port of destination.

10.2, AMS IC: Almost all of the goods to the port can be declared before the ship arrives, and the customs clearance results are displayed. When customs clearance is released, the AMS system will automatically display the IC, indicating customs clearance.

10.3, Upon the arrival notice of your goods, you or your customs broker will need to present relevant documents to the U.S Customs and Border Protection to clear your goods within 15 calendar days of your goods’ arrival.
Otherwise, the goods will be transferred to a warehouse, and you’ll need to pay for storage fees. If you have not claimed your goods within 6 months of their arrival, they could be sold at auction.

10. 4, Free storage period for docks
Most docks have a storage period of 5 days, Note, after the free period, you have to pay the storage fee, no matter holidays or weekends.

Arrange for pick-up and transport.
Upon arrival and unloading of the goods, and customs clearance is done, the shipping company will provide a PICKUP number, the agent will get the PICKUP number and notify C /, then the truck company will pick up your goods through PICKUP number, and finally deliver the goods to your designated place.

Thank you for your reading.

 

Now, it’s your turn

If any things confused you on this article, please tell me about it. I’d love to hear from you soon and I will reply quickly.
Anything you need help from Bling sourcing, please don’t hesitate to contact us.

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