MARPA members need to be concerned about the affect of tariffs on their international business. Tariffs may affect inbound supplies and reciprocal tariffs from our trading partners may affect PMA sales as well.
If you pull up the HTSUS today, it is not yet updated with the new tariffs, so we’ve summarized the upcoming tariffs imposing duties on goods from Canada, China (including Hong Kong) and Mexico. We also have links to the inspection copies of the tariffs.
The new tariffs went into effect on March 4 (today) at 12:01 am. They amount to a 25% tariff on products from Mexico or Canada, and a 20% tariff on products of China. The 20% tariff on Chinese products is a 10% increase from the tariff imposed a month ago, and is imposed in addition to the pre-existing 25% tariff on certain products (including most aircraft parts) that was imposed during the first Trump Administration (e.g. the additional China tariffs applied to most aircraft parts will be 45%).
| Tariff | Products | Duty |
| 9903.01.24 | Articles that are the product of China and/or Hong Kong | 20% |
| 9903.01.01 | Articles that are the product of Mexico | 25% |
| 9903.01.10 | Articles that are the products of Canada | 25% |
There are some exceptions, but the exceptions typically won’t benefit the PMA community. For Canada and Mexico, the exceptions include:
- donations of articles intended to be used to relieve human suffering, such as food, clothing, and medicine
- informational materials (like service bulletins)
Special Category 98 Provisions
The additional duties imposed by these tariffs generally will not apply if you are importing goods under one of the special provisions found in chapter 98 of the HTSUS, except that some of the provisions most likely to be used by the aviation community ARE subject to duty under the new tariffs. In particular goods entered under subheadings 9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80 are subject to the new tariffs, despite the fact that they fall within HTSUS category 98.
The first three subheadings apply to goods sent abroad for repair or processing and then returned to the United States. The importer will need to pay a duty on the value of the repairs. For subheadings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed in Canada, China (including Hong Kong), and Mexico. Note that subheading 9802.00.40 is for warranty repairs – the rules specify that the advancement in value will be subject to tariff even though the warranty repairs might be performed for free. Subheading 9802.00.60 is for processing of metal goods that are made in the U.S., exported for processing (e.g. a coating or plating or any other process), and then returned to the U.S. for further processing (the return is the import subject to a duty). In each case, the value of the repair or processing will be subject to the additional tariffs imposed on Canada, China and Mexico.
9802.00.80 is used when someone produces parts in the United States and then they are assembled abroad before being returned to the U.S. The dutiable value of the returned article is based on the value of the assembly minus the value of the individual parts from the U.S. This dutiable value will still be subject to the additional tariffs imposed on Canada, China and Mexico.
If you are importing aircraft parts from China, then check to see whether the additional 25% duty on certain products of China applies – it is under tariff code 9903.88.01 – and it applies to many aircraft parts and components used in such parts.
You can click below to find the DRAFT Federal Register notices. These tariffs are expected to be published in the Federal Register on Thursday the 6th, but copies are currently available for public inspection:
- Canada Tariff (25%)
- China Tariff (increasing to 20%, in addition to other duties)
- Mexico Tariff (25%)
Be on the look-out for reciprocal tariffs imposed by foreign trading partners. While these may make your parts more expensive, they will also apply to your U.S. based competitors who are seeking to export to the same customer.