US – China Bearing Tariffs: What’s Your Strategy?
- Oct 12, 2018 -

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Are you confused by the 301 tariffs the US has imposed on China? You are not alone. The majority of people I have spoken to at the Shanghai Bearing Fair have far more questions than answers, and my company, Precision Components, is happy to help.


Having worked in the bearing industry for over many years While my team and I are accustomed to getting paid for our advice, this topic is so overwhelmingly misunderstood that we feel it’s in the industry’s best interest to have this information for free.


The trade war between the US and China has left many Chinese companies feeling helpless, and most are deciding to take no action with the hopes everything will work itself out. In turn, US corporations are being forced to look to other countries in order to purchase much-needed bearings and bearing components. We don’t expect many business owners in China to understand the inner workings of the US government, however, it is important for them to know they have an outlet to better position themselves.


We suggest Chinese companies develop short-term, medium-term, and long-term strategies to reduce the impact of the 301 tariffs on their businesses. If we knew when President Trump and President Xi were going to start playing nice, we would tell you, but we don’t; so if you qualify, the first and most immediate step should be to file for an exemption. This is by far the best short-term strategy available. But get moving fast because the deadline to submit requests is Oct, 9th 2018. The process is fairly simple (2 pages at most), it’s free to file, and you do not need to hire an attorney to file for you, however, you may.


All bearings starting with a harmonized tariff schedule 8482 were on the first list of items to include an additional 25% duty. So effective July 6th, 2018, all bearings and bearing components going to the US from China were affected. The most common remark I am hearing from Chinese companies goes something like this: “We do not care because we are not paying the tariff,” to which I say: “so your customer has to pay the extra 25% and when they start buying from India instead of China, how are you going to keep your business?” By that time it will be too late.


PCI went to Washington D.C. and testified at the USTR hearings recommending bearing products be removed from list number one. Almost every company was


asked whether or not their product could be sourced from a country other than China. In the short term US companies will not change suppliers, but as the trade war continues, they will find other sources at their own expense. Most large US companies have the resources to source parts from other countries. The longer the trade war looms, the worse it is for everyone, and particularly, Chinese manufacturers.


Here are a couple of very important points that I would like to share and hope are helpful.


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