Double (Triple) Import Tarrifs (Estonia, Germany, US, China)

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Hi,

How can I avoid paying import tariffs more than once?

I'm launching a product that I'll be selling from a US-based pick-and-pack center. The components on the bill of materials are being manufactured in China. We're a company based in Estonia. The parts will be shipped from China to Germany for assembly. Then shipped from Germany to the US for warehousing. Then shipped to the customer throughout much of the world.

My general understanding is, though items will have to cross many economic borders, the shipments should only be charged a tariff once: when imported into the country where the final consumer of the product lives. Is that correct?

Now, my original sample shipped from China to Germany, and customs charged a fee for importing it. My fear is that they will do this again when the actual bulk order comes-in. And then again at the US-border. And then again when it is imported again into the EU for (eg) a French customer.

How do I properly navigate these international logistics between China, Estonia, Germany, and the US to ensure that these shipments are not getting taxed more than once?
#china #double #estonia #germany #import #tarrifs #triple
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  • Profile picture of the author savidge4
    Originally Posted by maltfield View Post

    Hi,

    How can I avoid paying import tariffs more than once?

    I'm launching a product that I'll be selling from a US-based pick-and-pack center. The components on the bill of materials are being manufactured in China. We're a company based in Estonia. The parts will be shipped from China to Germany for assembly. Then shipped from Germany to the US for warehousing. Then shipped to the customer throughout much of the world.

    My general understanding is, though items will have to cross many economic borders, the shipments should only be charged a tariff once: when imported into the country where the final consumer of the product lives. Is that correct?

    Now, my original sample shipped from China to Germany, and customs charged a fee for importing it. My fear is that they will do this again when the actual bulk order comes-in. And then again at the US-border. And then again when it is imported again into the EU for (eg) a French customer.

    How do I properly navigate these international logistics between China, Estonia, Germany, and the US to ensure that these shipments are not getting taxed more than once?
    The simple answer i believe is you cant. A good working model to look at would be Amazon. US facilities ship to the US. Facilities in Germany ship to Germany, Facilities in France ship to France. This is obviously done to reduce the tariff liability.

    If you are Buying from China and importing to Germany, you would want to keep a percentage in Germany to sell in the EU, and then a portion sent to the States to sell in the States.

    The best thing I can suggest is go here: ( https://ec.europa.eu/taxation_customs/index_en ) and start reading. The issue I can see you running into is goingto be "Place of Origin" Since the parts came from China, the Tariff across the EU will reflect that.

    Hope this helps somehow.
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  • Profile picture of the author Serene Carmen
    Originally Posted by maltfield View Post

    Hi,

    How can I avoid paying import tariffs more than once?

    I'm launching a product that I'll be selling from a US-based pick-and-pack center. The components on the bill of materials are being manufactured in China. We're a company based in Estonia. The parts will be shipped from China to Germany for assembly. Then shipped from Germany to the US for warehousing. Then shipped to the customer throughout much of the world.
    Is there a reason you have your assembly operation is Germany rather than China? It's a much lower cost center. You would then only pay import fees once when the goods reach the US.
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    • Profile picture of the author maltfield
      I'm currently located in Germany, and I wanted to do the assembly myself.

      But, you're right, the EU just makes is so unfavorable to do anything in this country; I should probably cut Europe out of the equation entirely and just do the whole thing in China.

      Do you have any recommendations on vendors that do kitting, assembly, QA, and packaging in Guangdong?
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      • Profile picture of the author Serene Carmen
        Originally Posted by maltfield View Post

        I'm currently located in Germany, and I wanted to do the assembly myself.

        But, you're right, the EU just makes is so unfavorable to do anything in this country; I should probably cut Europe out of the equation entirely and just do the whole thing in China.

        Do you have any recommendations on vendors that do kitting, assembly, QA, and packaging in Guangdong?
        Next Smart Ship and China Division are 3PL's that do kitting and assembly, there are many more. You can do an internet search, then do your due diligence. There's also no need to restrict yourself to looking in Guangdong, the 3PL will handle logistics inside China. You should hire an independent Quality Contol inspection before the items ship.
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  • Profile picture of the author Monetize
    Originally Posted by maltfield View Post

    How can I avoid paying import tariffs more than once?

    How do I properly navigate these international logistics between China, Estonia, Germany, and the US to ensure that these shipments are not getting taxed more than once?

    Sometimes we develop a perfect business model but for whatever
    reason it just does not work anymore. That is why it is important to
    remain flexible and able to pivot into something different.

    If your current system will no longer be profitable, figure out some
    other options. China is not the only place that manufactures
    components.

    Unless it's made from rare earth elements, try looking elsewhere.

    You might also consider using an import/export specialist.

    This article is from a couple of years ago but it is still relevant:

    https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/
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