Tariffs will be imposed on August 23rd, with connectors bearing the brunt

According to the forefront announcement of the "Announcement of Members of the State Council Tariff Commission on Imposing Tariffs on Imported Goods Originating from the United States of 50 billion US dollars", the second list of goods subject to additional tariffs in the United States has been adjusted, and the additional tariffs will be implemented from 12:01 am on August 23, 2018.

This also means that imported products originating in the United States will be subject to a 25% tariff. This is also the top product among electronic components that has been affected by additional tariffs. Previously, the original import tax rate for connectors was 0%.

It is understood that the brands of related connectors involve 3M, MOLEX, TE, TYCO, AMPHENOL, ARK-LES, DELPHI, HEYCO, MULTICOMP, and so on.

International e-commerce reporters learned from financial and tax professionals that imported products generally need to pay import tariffs and import value-added tax. Qualified import processing enterprises can be exempt from value-added tax, while general trade will not be exempt from value-added tax. The import tariff amount is the dutiable price * the import tariff rate. The import value-added tax amount is the dutiable price+customs duty amount+consumption tax amount * value-added tax rate. However, value-added tax can be offset through domestic sales or exports for input value-added tax or exemption and refund.

The main factor that truly affects product prices is import tariffs. 25% means that the product price has increased by a quarter. With the increase in tariffs on connectors, it has become inevitable for products originating in the United States to increase in price, and some people have expressed that it will be beneficial for the development of domestic connectors.

The list drawn up as early as June did not include connectors, but the connectors listed in List 2 released on August 8th of this month have attracted widespread attention from component suppliers. From the currently released list, it can be seen that most of them involve passive components and do not involve integrated circuit products. Integrated circuits are the top priority for semiconductor products, and the industry maintains a high level of attention to which will be included in the scope of taxation.

Starting from July 6th, the United States imposed tariffs on approximately $34 billion of Chinese exports to the United States. At the same time, China also implemented equivalent tariffs on imported goods such as soybeans, automobiles, and aquatic products originating from the United States, with a tax rate of 25%, involving approximately $34 billion in China's imports from the United States in 2017.

The United States will impose tariffs on approximately $16 billion in other goods on the 23rd, while China has taken corresponding actions to impose a 25% import tariff on chemicals, medical equipment, energy products, and other goods imported from the United States, involving approximately $16 billion in China's imports from the United States in 2017.