The China Shipping Dilemma - What Should Be Your Move?
Right now, many brands are holding back from shipping out of China, waiting to see how the tariff situation plays out. But here’s the problem: once a deal is reached, there will be a massive surge in bookings.
When that surge happens, not only will there be higher volume than usual, but there will also be buildups of shipments waiting to be loaded. This leads to port congestion, which then cripples supply chains on both sides of the Pacific.
Does This Mean You Should Ship Today?
I don’t know. But I’m here to lay out the options—you decide what’s right for your business.
On one hand, if a deal is reached and you shipped, you’ll be the wise one.
You’ll have inventory while much of the U.S. waits.
You’ll have locked in the lowest shipping rates before prices spike from the surge.
And you’ll be ready to capitalize on increased sales that come along with the elimination of Section 321.
On the other hand, if no deal is reached, you could be stuck with inventory that requires a 145% tariff (before duties and Section 301) just to clear customs.
Am I confident there will be a deal? I don’t know. I’m not here to speak on politics—I’m leaving that to you. Base your decision on your view of the situation and proceed accordingly.
If You Do Decide To Ship, Here Are A Few Suggestions
Bonded Warehouse
You can ship now and store the goods in a bonded warehouse. That way, you won’t need to pay the 145% (or whatever the rate is at that time) unless you choose to clear them. If no deal is made, you can always re-export the goods back to China without ever clearing customs.
Section 321 Strategy (Before May 2)
If you can get your goods in before May 2, you can withdraw under $800/day per recipient, duty- and tariff-free. This is going away on May 2, which means everything must be withdrawn by then. For a full container load, it might take a few weeks depending on the value of the goods.
Canada as a Backup Plan
If you have customers in Canada—even if you do not have as big of a presence there—it might be enough as a last resort to help you decide to ship, with the underlying insurance that you can always just transfer inbound to Canada.
Re-exporting to China
This has to be negotiated with your supplier, obviously, but it remains an option as a final insurance policy.
Section 232 and IEEPA Considerations
If you have goods subject to Section 232, you can prioritize those above the rest, considering that if a product has Section 232 status—even if it’s only based on derived value—it will be exempt from the reciprocal tariff of 125% (as of today).
The IEEPA (fentanyl) tariff of 20% remains nonetheless.
I’m curious—what’s your move?
Will you ship? Will you hold off? Do you think a deal will be made? Why or why not?
Feel free to reply—I’d love to hear your take.
Best,
Abe
Did You Download Your Guide?
After numerous calls with many of you, I have compiled a comprehensive guide that gives you actionable advice to take today to stay afloat and prepare for whatever tariffs may come your way.
Ironically, I called it “The Art of the Deal”—after all, that’s what Trump is using for his play.
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