General Discussion

Takket

(21,600 posts) Sat Jul 7, 2018, 07:51 PM Jul 2018

How are tariffs actully collected?

Let's say I'm John Q. Steelguy. I make my living importing steel from China (through Los Angeles) and selling it to contractors building commercial buildings.

I just ordered $1 million in steel from China and it is on its way here on a barge. There is a 20% tariff, so I owe SOMEONE $200,000.

Who gets that money? And how do they know I owe it? Are they reviewing the ship manifest at the port in Los Angeles?

10 replies

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How are tariffs actully collected? (Original Post) Takket Jul 2018 OP

custom and border protection enforces import regulations at the port of entries drray23 Jul 2018 #1

It's a tax collected by the government when the product is imported, I think when The Velveteen Ocelot Jul 2018 #2

they all go into trump family bank accounts in switzerland nt msongs Jul 2018 #3

From what I understand, the tariff is accessed and must be paid at the port of entry, before cargo Blue_true Jul 2018 #4

My employer orders parts for some of production equipment from the manufacturer which is in taiwan. Kilgore Jul 2018 #5

Thanks,your post Wellstone ruled Jul 2018 #6

In reality, we never let the supplier pay the duties Kilgore Jul 2018 #7

Always did the same when I ran the Backend of a Job Shop. Wellstone ruled Jul 2018 #9

You're probably already paying tariffs. Igel Jul 2018 #8

so it works exactly like i though it did.... Takket Jul 2018 #10

drray23

(7,635 posts)

1. custom and border protection enforces import regulations at the port of entries

Reply to Takket (Original post)

Sat Jul 7, 2018, 07:55 PM

Jul 2018

So, when you order a barge of steel from China, you have a shipping manifest, and you have to fill out import forms for your goods to get here. Once it arrives at a port of entry, its inspected. The duty fee is collected by CBP.

On edit, here is the description of the whole process : https://www.cbp.gov/document/publications/importing-united-states

The Velveteen Ocelot

(115,783 posts)

2. It's a tax collected by the government when the product is imported, I think when

Reply to Takket (Original post)

Sat Jul 7, 2018, 08:01 PM

Jul 2018

the product clears customs. It goes to the government but because of the cost to the importer also it raises the cost to consumers of the product.

msongs

(67,430 posts)

3. they all go into trump family bank accounts in switzerland nt

Reply to Takket (Original post)

Sat Jul 7, 2018, 08:04 PM

Jul 2018

Blue_true

(31,261 posts)

4. From what I understand, the tariff is accessed and must be paid at the port of entry, before cargo

Reply to Takket (Original post)

Sat Jul 7, 2018, 08:07 PM

Jul 2018

can be unloaded. The money goes to the Treasury.

Kilgore

(1,733 posts)

5. My employer orders parts for some of production equipment from the manufacturer which is in taiwan.

Reply to Takket (Original post)

Sat Jul 7, 2018, 08:14 PM

Jul 2018

The parts hit the port and go to a bonded warehouse where customs peperwork is filled out and duties are collected. For us, who actually pays the duties was negotiated as part of the purchase contact. They are paid to customs, then the shipment is released to us for shipment to the plant.

Hope that helps.

Wellstone ruled

(34,661 posts)

6. Thanks,your post

Reply to Kilgore (Reply #5)

Sat Jul 7, 2018, 08:33 PM

Jul 2018

explains it is simple but a accurate in detail.

Kilgore

(1,733 posts)

7. In reality, we never let the supplier pay the duties

Reply to Wellstone ruled (Reply #6)

Sat Jul 7, 2018, 08:41 PM

Jul 2018

They invariably "build it into" the price and we get screwed. To streamline the process we use a freight forwarder who just handles the whole shipping/customs process for us.

https://en.m.wikipedia.org/wiki/Freight_forwarder

Wellstone ruled

(34,661 posts)

9. Always did the same when I ran the Backend of a Job Shop.

Reply to Wellstone ruled (Reply #6)

Sat Jul 7, 2018, 09:57 PM

Jul 2018

Sure as heck made things easier . Some off the Import Licenses require months of lead time and depending on the Country,they have to be renewed monthly or bimonthly. And then there is the hassle of letters of credit and agreed upon Bank or Clearing house for payments.

Like you mentioned,using a Bonded Freight Broker is the only way to go. Especially dealing with Currency. Again,we knew to the penny what we were paying for out raw materials. Same for our Finished Parts that we shipped off shore.

Igel

(35,332 posts)

8. You're probably already paying tariffs.

Reply to Takket (Original post)

Sat Jul 7, 2018, 09:29 PM

Jul 2018

There are hundreds of pages of tariff schedules, and many have been around, free trade notwithstanding, for decades or longer.

When a company I worked for in the '90s imported stuff from China, it paid tariffs; that was '97 or '98. No pay, you cargo sits in storage in customs for eternity. Think of it paying ransom on your stuff. Close enough.

If you don't pay the ransom, it sits in storage and you get billed storage fees when you actually do want your stuff.

Takket

(21,600 posts)

10. so it works exactly like i though it did....

Reply to Takket (Original post)

Sat Jul 7, 2018, 10:31 PM

Jul 2018

This is basically a tax. Money that the consumer pays is going into the treasury. Call it a tariff but the end result is the same.

We need to be HAMMERING drumpf on this in ads for the election.

That and I understand some of the tariffs are on ingredients for pharmaceuticals and medical devices. We should be running ads highlighting this and asking "Aren't our medical bills high enough already?"

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