On April 9, 2025, the General Administration of Customs of the People’s Republic of China (GACC) issued Announcement No. 58 [2025], in accordance with the Announcement of the Tariff Policy Commission of the State Council on Imposing Tariffs on Imports Originating from the United States (Announcement No. 4 [2025] of the Tariff Policy Commission), and the Announcement on Adjusting Tariff Measures for Imports Originating from the United States (Announcement No. 5 [2025] of the Tariff Policy Commission). Effective from 12:01 PM on April 10, 2025, an additional 84% tariff will be imposed on all imported goods originating from the United States, on top of the applicable tariff rates in force.
However, goods that have already been shipped from the place of origin prior to 12:01 PM on April 10, 2025, and are imported between 12:01 PM on April 10 and 24:00 on May 13, 2025 (hereinafter referred to as “in-transit goods”), shall be exempt from this additional tariff.
While goods qualifying as “in-transit” remain unaffected, for Chinese importers whose procurement cycles cannot meet the cut-off date, this sudden policy change may pose a substantial commercial burden. The following legal and strategic guidance is provided for Chinese importers in response to this abrupt imposition for reference:
1. Review the Contract #
- Force Majeure Clause:
Examine whether the contract contains a specific Force Majeure clause, and whether it includes language covering “policy changes” or “tariff adjustments.” - Governing Law Considerations:
If the contract does not contain a Force Majeure clause, the applicable legal remedies vary by governing law: - PRC Law:
Article 590 of the PRC Civil Code may be invoked for force majeure, while Article 533 permits adjustment based on “change of circumstances” (hardship doctrine). - U.S. Law:
For contracts governed by U.S. law and involving the sale of goods, the Uniform Commercial Code (UCC) applies. UCC § 2-615 (Excuse by Failure of Presupposed Conditions) generally applies to sellers, not buyers such as Chinese importers. Under “discharge by impossibility,” the imposition of an 84% tariff does not render contract performance impossible. Under “discharge by impracticability,” an increase in cost (even exceeding 50%) is generally held “insufficient” to discharge obligations. - CISG (United Nations Convention on Contracts for the International Sale of Goods):
Pursuant to Article 79, a party must prove that the impediment was “beyond its control”, “not reasonably foreseeable”, and must notify the other party within a reasonable time.
Regardless of contractual stipulations or governing law, the principle of good faith requires Chinese importers to initiate renegotiation with counterparties as part of their duty to mitigate losses and preserve business relations.
2. Dialogue with Customs Authorities #
Although Article 2 of the Tariff Commission’s Announcement No. 4 [2025] explicitly states that “no exemption or reduction shall be granted” for the additional tariffs, it remains essential for importers to maintain proactive communication with Customs, the Ministry of Commerce, and other competent authorities.
3. Free Zone Strategy #
According to Article 2 of Announcement No. 4 [2025], current policies regarding free zone and tariff exemptions or reductions remain unchanged. Therefore, importers may consider utilizing free zone tax protection (e.g., under “5034” customs regime), leveraging bonded warehouse storage to gain time and delay customs clearance.
Importers are also encouraged to negotiate preferential terms with customs clearance agencies or free zone operators, including favorable rental agreements for warehouse space.
It is important to note, however, that Announcement No. 58 [2025] has closed the door to strategies such as tariff code modification or substantive transformation within the bonded zone. Specifically:
- All goods for domestic sale or re-export must declare full use of bonded materials;
- Simple processing operations that merely alter commodity codes or declared origin are strictly prohibited.
4. Shifting the Origin Burden #
Given that this additional tariff applies to all goods of U.S. origin, US exporters are similarly exposed to risks of order cancellations and loss of market share. To maintain commercial ties with the Chinese market, some U.S. exporters are seeking flexible solutions, such as:
Re-exporting through third countries;
Restructuring supply chains to achieve origin transformation.
Chinese importers may negotiate with U.S. exporters to shift the burden of origin compliance, encouraging them to take responsibility for mitigating the impact of the tariff.
Nevertheless, it is important to emphasize that these methods are often temporary or transitional, and may present significant compliance risks if the transformation does not constitute a substantial change under internationally recognized rules of origin.
This article is for informational purposes only and does not constitute legal advice. For case-specific consultation, please contact us. Read our full Legal Disclaimer, which also includes information on translation accuracy.
