According to the announcement from the Tariff Commission of the State Council regarding the imposition of tariffs on $50 billion worth of imports from the United States, the list of goods subject to additional tariffs has been adjusted, and the tariffs will be implemented starting from 12:01 PM on August 23, 2018.

This also means that relevant imported products from the United States will be subject to a 25% tariff. This is also the first category of electronic components affected by the additional tariffs. Previously, the import tax rate for connectors was 0%.

It is understood that the brands of the relevant connectors include 3M, MOLEX, TE, TYCO, AMPHENOL, ARK-LES, DELPHI, HEYCO, MULTICOMP, and so on.

According to financial and tax professionals, imported products generally need to pay import duties and import value-added tax. Qualified import processing enterprises can be exempt from value-added tax, while general trade will not be exempt from value-added tax. The amount of import duty is calculated as the dutiable price multiplied by the import duty rate. The amount of import value-added tax is calculated as (dutiable price + duty amount + consumption tax amount) multiplied by the value-added tax rate. However, the value-added tax can be deducted through domestic sales or exports via input VAT or exemption and refund.

The main factor that truly affects product prices is still the import duty. A 25% increase means that the product price has risen by a quarter. With the increase in connector tariffs, price hikes for products originating from the United States have become inevitable, and some experts believe this will benefit the development of domestic connectors.

In the list drafted in June, connectors were not included, but they were prominently listed in the second list published on the 8th of this month, which has attracted widespread attention from component supply and demand parties. From the currently published list, most involve passive components and do not include integrated circuit products, while integrated circuits are the core of semiconductor products. The industry is highly attentive to which products will be included in the scope of taxation.

Starting from July 6, the United States imposed tariffs on approximately $34 billion worth of Chinese exports to the U.S., while China also took reciprocal tariff measures on imported products from the United States, such as soybeans, automobiles, and aquatic products, with a tariff rate of 25%, involving approximately $34 billion worth of imports from the U.S. in 2017.

The U.S. tariff measures on the remaining approximately $16 billion worth of goods will be implemented on the 23rd, while China has taken corresponding actions, planning to impose a 25% import tariff on chemical products, medical devices, energy products, and other goods imported from the U.S., involving approximately $16 billion worth of imports from the U.S. in 2017.