No, it was Carter. It almost destroyed the American boat and general aviation industry. As raising taxes always does.
Except Carter had been out of office for 10 years. Please people, get your facts straight.
No, it was Carter. It almost destroyed the American boat and general aviation industry. As raising taxes always does.
I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?
John T.
I recently had a client who was buying a Chinese-built used vessel, it was originally imported through Canada, then purchased by an American, and the duty was never paid, so my client had a choice, pay the duty, get the seller to pay the duty, or get the seller to reduce the selling price to cover the duty. It was a negotiation.
I would verify all with an attorney who specializes in yacht (and jet) import duties.
First, there was no additional tariff added to boats from China. The current tariff is 1.5% if imported into US.
Second, there are plenty of boats built in China, some in Taiwan, some in Malaysia. The Chinese builders sales in the US remain good although hurt some by the pandemic. Horizon, Cheoy Lee, Outer Reef are doing well as are others.
I don't believe so, at least not typically. Import Duty is a one time thing on initial import. The only exception that I have heard of, and I'm not convinced it's real or correct, is that if a duty-paid boat is subsequently registered in another country, then brought back into the US, it might be subject to duty again. But the more I think about it, I don't think that's correct. I know people who own duty-paid boats, but they are registered in other countries. These boat's were then sold in the US and registered in the US without issue because the Duty was already paid. One recommendation is to get and retain documentation of duty paid if you import a boat so that you are another owner can show it's been paid.
I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?
John T.
I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?
Only if flagged off shore and then imported at the time of re-sale. If the boat was originally imported then it does not need to be imported again. The buyer will pay applicable sales taxes on the second sale.I recently heard that even a used boat originally built in China and being resold in the USA may be liable for the import tax upon its sale. Anyone heard about or experienced this?
John T.
I would add to this as follows: if the boat has not been imported to the US previously: tariffs will be based on current market value but may be calculated on % of Chinese content. In speaking with an attorney on this subject - he indicated that most China built boats (when new), are circa 50% China built (labor and materials) - the remaining 50% is offshore - say Cummins engine, electronics, other gear. So on a $500k boat - you would prospectively pay tariffs on $250k and taxes on the full amount.(Updated version of my original post on this subject in 2023)
This can be a complex, nuanced subject, if in doubt (and maybe even if you are not in doubt) consult with an attorney who specializes in this type of law.
Import duty for all countries, including China, is 1.5%, plus fees amounting to about 0.3%. This has not changed.
Duty, tariff, and tax are all distinct from each other.
New and brokerage vessels (SEE NOTE BELOW) are subject to duty and tariff if it was never paid, or if the vessel was subsequently registered outside the US, and imported into another country, which voids the duty, and the tariff if applicable.
Just because a vessel is USCG documented, this doesn’t prove that the duty/tariff was paid.
Proof the duty (and tariff if applicable) was paid when the vessel was first registered in the US, should be part of any brokerage purchase of a vessel built in China. The original entry summary is the key document. This would have been issued when the vessel originally was imported into the US and the name of the form, called a consumption entry, is CBP-7501.
If you cannot provide or obtain this, and CBP decides to enforce it, there is a possibility that the full current tariff (25% + another 10% now) if applicable, and duty could be imposed on the current market value of the vessel. This is true irrespective of whatever may be going on with China tariff fluctuation at the moment. Some builders will retain this CBP document, or you may be able to obtain if from the original import customs broker when it arrived in the US, so you may be able to go back to them to obtain the proof that duty and tariffs were paid at the time of the first US entry/importation.
It's worth noting, at least for new vessels, the tariff is not imposed on the sale price of the vessel, it is imposed on the Chinese portion, i.e., Chinese labor and materials (if there are other materials in the vessel that are from a country that is subject to a tariff, those too may be included). It varies from builder to builder; however, this may effectively equate to about 8% of the sale price when the tariff was 25%.
When you purchase a new vessel, imported into the US, you should get a copy of the aforementioned CBP document.
Again, if there is any doubt, consult with a maritime attorney who specializes in vessel registration, flagging, duty, and tariff.
NOTE: To my knowledge, a brokerage transaction in itself doesn’t trigger or set in motion any review of the “duty/tariff paid” status of the boat. Confirming (as you stated) that the duty/tariff has indeed been paid is just good workmanship to prevent troubles later if somehow there is a challenge.
My understanding is that the adjusted for Chinese content tariff schedule is not possible on a used vessel, making those calculations on used gear, with no invoices, would be very difficult and risky. I believe, and I may be wrong, for a used vessel being imported for the first time, it is subject to the full tariff on the market value in force at that time. Also, and this can vary from builder to builder, 50% Chinese "content" sounds high to me.I would add to this as follows: if the boat has not been imported to the US previously: tariffs will be based on current market value but may be calculated on % of Chinese content. In speaking with an attorney on this subject - he indicated that most China built boats (when new), are circa 50% China built (labor and materials) - the remaining 50% is offshore - say Cummins engine, electronics, other gear. So on a $500k boat - you would prospectively pay tariffs on $250k and taxes on the full amount.
I do not know definitively how the tariff is calculated on a used boat being imported - if off of market value - the tariffs could significantly exceed the tariffs that would have been collected on the original import from the factory. I will ask my attorney this question specifically as it would affect my own consideration of flagging a new purchase offshore. On the boat I am building currently - the allocation of Chinese Vs US/Other costs is slightly over 50% - which my attorney indicates falls in line with his experience. I believe, for the builder/importer I am working with, that it is fairly easy for them to break down origin of content as much of the equipment going into the boat is purchased stateside and shipped to the manufacturer in containers. All interesting as we try to navigate this new world. In my case - the tariffs in place at the time I contracted for the boat were included in the build price. I did inquire of Nordhaven as I was considering one of their models - simply, they would not deal with the matter and indicated that tariffs would simply be my 100% risk. Either way - I pay. But all said, not as scary or prohibitive as the headline numbers might indicate. In today's environment, I can say I would make the same decision again. Now the remaining question is do I import into the US or into the Cayman or Marshal Islands - or, do I incorporate ownership into Delaware..... All legal alternatives with various applicabilities dependent on facts. Clearly, options that require good advice from someone more qualified than IMy understanding is that the adjusted for Chinese content tariff schedule is not possible on a used vessel, making those calculations on used gear, with no invoices, would be very difficult and risky. I believe, and I may be wrong, for a used vessel being imported for the first time, it is subject to the full tariff on the market value in force at that time. Also, and this can vary from builder to builder, 50% Chinese "content" sounds high to me.
It is tough to stay up on these matters - especially if you are not in the thick of it. The reality is the additional 10% tariff will impact my total cost on the boat less than 3% - still money of course, but not meaningful in the scheme of things. Shipping - well, that is simply a fact of life for me as all of the boats I was seriously contemplating required shipping (China, Taiwan, Turkey, Netherlands). I did consider one locally built US boat that matched the quality of the offshore boats - but of all things, to much beam for my slip. And yes, fun to think about a pure mech engine - I have one know, a Lugger/John Deer that is unstoppable and starts instantly - a real beauty. You are correct about resale - not my biggest concern, and interestingly, here in the NW you in effect broaden your market to Canadian buyers with a vessel that has not been imported to the US. But all said - probably my biggest consideration is that I am part of a community - I do care about my State and my boating community and believe that I should support it - even if a bit costly...@KMAL it's tough to even keep up with the current total tariff on Chinese boats. With the additional 10% what are we looking at now... 36.5% or higher? Plus the $100k to have it delivered to North America.
Since you're building a new custom boat, let's assume that it's "yours" and that resale isn't your biggest concern. At this point you may wish to consider: (1) register it offshore and therefore rely on your 1 year cruising permit when in the US; (2) install a mechanical engine and generator. CCEC or DCEC Cummins China can provide you, as can Doosan Korea.
If you're going for #1 then why in the world would you install an electronic engine, right?
I'm wondering if the Chinese government is paying all or part of the tariff? There are a number of areas where the government is paying to keep China competitive and their people working.
Ted
No - 100% on US purchaser or importer.I'm wondering if the Chinese government is paying all or part of the tariff? There are a number of areas where the government is paying to keep China competitive and their people working.
Ted
It was a common practice for the Chinese government to lower the price on a product to keep it plus the USA tariff below the domestic manufacturers cost. Once the USA manufacturer was out of business or stopped producing that product, the Chinese government could raise the price of the product to make a profit. Another tactic was currency manipulation to keep USA manufacturers from being competitive. If it weren't for the Jones Act, there probably wouldn't be any commercial ship, tug, and barge builders in the USA anymore.you are funny guy. Chinese government pay your, sorry not the Trump tariff you pay.
Chinese government don't export anything,It was a common practice for the Chinese government to lower the price on a product to keep it plus the USA tariff below the domestic manufacturers cost. Once the USA manufacturer was out of business or stopped producing that product, the Chinese government could raise the price of the product to make a profit. Another tactic was currency manipulation to keep USA manufacturers from being competitive. If it weren't for the Jones Act, there probably wouldn't be any commercial ship, tug, and barge builders in the USA anymore.
Ted
Last time the USA be competitive in late 1980-90. in era of early PC Sea RAY,bayliner when Brunswick produced over 3000 yachts yearly. i don't see Made in USA product in market from long time,or you go in Wall mart and try find something made in USA. Also in Croatia is hard to find something for boat made in Croatia .nother tactic was currency manipulation to keep USA manufacturers from being competitive. If it weren't for the Jones Act, there probably wouldn't be any commercial ship, tug, and barge builders in the USA anymore.
Ted
China controls everything any business in their country does.Chinese government don't export anything,
It was a common practice for the Chinese government to lower the price on a product to keep it plus the USA tariff below the domestic manufacturers cost. Once the USA manufacturer was out of business or stopped producing that product, the Chinese government could raise the price of the product to make a profit. Another tactic was currency manipulation to keep USA manufacturers from being competitive. If it weren't for the Jones Act, there probably wouldn't be any commercial ship, tug, and barge builders in the USA anymore.
Ted
Nothing like a $1-Trillion surplus and 17% growth in exports despite 8 years of 25% tariffs. Xi does control and China does export (the government) - lest we ignore the many state owned companies that both manufacture and export.China controls everything any business in their country does.
Xi's most important job is keeping people employed. So it's all about trade, and he controls everything.
Ted
Interesting discussion. Australia, and everyone else, is facing 25% tariffs on exports of steel and aluminium (you spell it aluminum) to USA. Bluescope, our large steel producer also operates in and makes steel in USA, employing 4000 people to do it.Nothing like a $1-Trillion surplus and 17% growth in exports despite 8 years of 25% tariffs. Xi does control and China does export (the government) - lest we ignore the many state owned companies that both manufacture and export.
yupi we close all our steel factories lucky we dirty industry is in USA,Australia and normally chinaInteresting discussion. Australia, and everyone else, is facing 25% tariffs on exports of steel and aluminium (you spell it aluminum) to USA.