On April 1, 2018, the Ministry of Finance (MOF) announced that with the approval of the State Council, the Customs Tariff Commission of the State Council has decided to suspend duty concessions on certain imported goods originating in the United States as of April 2, 2018. The unofficial English translation of the announcement states:
On March 8, 2018, US President Trump signed an announcement confirming that imported steel and aluminum products threatened US national security and decided to impose tariffs (ie 232 measures) on imported steel and aluminum products from March 23. The 232 measures violated the relevant rules of the World Trade Organization and did not comply with the “security exceptions” provision, which actually constituted safeguard measures. This measure was implemented on March 23 and caused serious damage to our country’s interests. In order to safeguard China’s interests and balance the losses caused by the U.S. 232 measures to China’s interests, I have suspended duties on seven categories of 128 imported goods originating in the United States from duty duties on April 2, 2018, based on the current applicable tariff rates. Tariffs have been imposed on the importation of tariffs on 120 items of imported goods such as fruits and products, and a tariff rate of 25% on 8 items such as pork and products. The current policy of tax-free and tax-exemption remains unchanged.
China’s advocacy and support for the multilateral trading system and the suspension of tariff concessions to the United States are legitimate measures taken by China to use the rules of the World Trade Organization and safeguard its interests.
In addition the Customs Tariff Committee issued the following Announcement [2018 No. 13]: (unofficial English translation)
In order to safeguard China’s interests and balance the losses caused by the United States adding tariffs (that is, 232 measures) to imported steel and aluminum products to China’s interests, the State Council Tariff Commission decided to suspend tariff reduction obligations on certain imported products originating in the United States. The relevant issues are hereby notified as follows:
First. To suspend tariff reduction obligations on 120 imported goods such as fruits and products originating in the United States, impose additional tariffs on the basis of the current applicable tariff rates, and impose a tariff rate of 15%.
Second, 8 import goods such as pork and products originating in the United States shall be subject to tariff reduction obligations. Tariffs shall be imposed on the basis of the current applicable tariff rates, and the tariff rate shall be increased by 25%.
Third, the current policy of taxation, tax relief and tax exemption remains unchanged.
Fourth, after adding tariffs, the relevant formula:
Tariff = duty paid price × (current applicable tariff rate + imposed tariff rate)
Import Consumption Tax = Consumption Tax Calculated Price of Import × Consumption Tax Rate of Import
Taxes for consumption tax at the import = (tariff duty + duty)/(1-tax for importation tax)
Value-added tax for import = Value-added tax for import × Tax rate for import VAT
Import VAT taxation price = Customs Duty paid price + Customs duty + Import consumption tax
Fifth. This Circular shall be implemented as of April 2, 2018.
Annex: List of Commodity Tariff Obligations Concerning Tariff Reduction and Tariff Increase (Chinese with tariff subheadings)