The Office of the United States Trade Representative (USTR) has released a list of products imported from China subject to additional tariffs as part of the U.S. response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property. Every single product that is imported into the US is assigned a code called Harmonized Tariff Schedule (HTS). Section XVI, chapter 85 defines the HTS codes for every piece of electrical equipment/machinery/accessory. The HTS code for LED drivers/power supplies is 8504.40.95.
Based upon their respective HTS codes, LED drivers/power supplies from ERP Power are NOT included in the first and second lists of products and, therefore, are NOT subject to the China tariff increase which took effect on July 6, 2018.
Here is a USTR fact sheet regarding the tariffs.
On July 10, 2018 the Office of the United States Trade Representative announced a third group of products for public comment. LED Drivers are included in this third product list.
On September 17, 2018, the USTR announced a final third group of products tariffs will go into effect as of September 24, 2018 as a 10% tariff, which could increase to a 25% tariff for LED Drivers at a future unspecified date. The HTS code 8504.40.95 for LED drivers/power supplies appears in the final version of this third product list.
On December 1, 2018 the implementation of the 25% tariff was delayed until March 1, 2019.
On February 24, 2019, it was announced implementation of the March 1, 2019 tariff increase to 25% has been delayed.
Effective May 15, 2019, ERP Power is offering a new INCOTERMS option called “DDP Los Angeles” for incoming purchase orders. DDP is an abbreviation for “delivered duty paid”. ERP Power products will be available for pickup in Los Angeles, CA delivered duty paid to the United States from ERP’s point of manufacture with up to an additional 4-week (30 days) lead time reflective of sea shipment transit time.
Purchase orders indicating “DDP Los Angeles” INCOTERMS will result in a 15% of gross purchase price amount being added and itemized as a “Shipping and Handling” charge on your invoice. All purchase orders must reflect this “Shipping and Handling” charge for “DDP Los Angeles” as a separate line item on each purchase order. The “DDP Los Angeles” INCOTERMS is only applicable to new purchase orders scheduled to ship after May 15, 2019. ERP Power will thereby assume responsibility for shipment and import costs, including tariffs, as the importer of record. In contrast, purchasers continuing to buy products from ERP Power with alternative INCOTERMS will be responsible for payment of the 25% import tariff. Responsibility for shipment costs from Los Angeles, CA to purchaser locations will be borne by the purchaser.
The “DDP Los Angeles” shipping and handling fee of 15% of gross purchase price is likely more cost effective than the 25% import tariff. ERP Power is encouraging all customers to review your LED driver demand forecast for Q2 and Q3 2019 to consider the savings opportunity and 4-week (30 days) additional shipping lead time for the new “DDP Los Angeles” INCOTERMS.
On May 31, 2019, the USTR announced products that were exported from China to the United States prior to May 10, 2019 will remain subject to an additional 10 percent tariff if they enter into the U.S. before June 15, 2019.
ERP Power will continue to monitor the situation and keep you informed with any updates. More information from the USTR is available online at: https://ustr.gov/