Tariff Updates: Brazil, China, & Vietnam

January 11, 2021 | The Toy Association is alerting members to potential new U.S. tariffs on products originating in Vietnam as well as changes to tariffs on products imported to Brazil and from China.

Vietnam

The Toy Association has joined the Americans for Free Trade coalition alongside more than 200 other companies and trade associations in opposing a new series of punitive tariffs on imported goods from Vietnam. The Association has also submitted comments on two U.S. Section 301 investigations led by the Office of the United States Trade Representative (USTR) on certain Vietnam currency practices, which could lead to tariffs similar to those placed on imports from China. The National Retail Federation estimates that if such tariffs were to take effect, it could result in more than $4 billion in increased costs and pricing for American consumers. Vietnam currently serves as a leading toy manufacturing hub, and greatly benefited from production exiting China during the U.S.-China trade disputes.

Brazil

The domestic Brazilian toy industry, through the trade association ABRINQ, has petitioned against a planned reduction of the country’s longstanding emergency protective tariff of 35 percent on toys from non-MERCOSUR countries (outside Argentina, Brazil, Paraguay, and Uruguay) to the normal (but still high compared to international norms) MERCOSUR-bound rate of 20 percent. The changes, recommended by Brazil’s Chamber for Foreign Trade, were scheduled to take effect on January 1, however Brazil’s inter-ministerial council has now sided with the Brazilian toy industry and decided on a staged reduction instead. The tariff has been and will continue to be reduced based on the following schedule: 30 percent on December 1, 2020; 25 percent on June 1, 2021; and 20 percent on December 1, 2021.

China

On January 1, virtually all goods previously excluded from the additional Section 301 tariffs the U.S. imposed on imports from China became subject to those tariffs, which range from 7.5 to 25 percent. While these tariffs do not directly impact all toys, Toy Association members who may be affected may wish to join a lawsuit that has been filed in the Court of International Trade challenging the tariffs on List 3 and 4A goods, which includes such products as balls, chalk, and sporting goods. Importers of these goods who join the suit can preserve their rights to possible refunds of those tariffs. Click here to learn more.