China Tariffs Hit 34.7%: Impact on Supply Chain Classification

The effective tariff rate on Chinese imports to the United States has reached 34.7% as of February 2026, according to analysis by the Congressional Research Service. This aggregate figure combines the original Section 301 tariffs (ranging from 7.5% to 25% depending on the product list), the February 2026 Section 122 surcharge of 10%, and various sector-specific duties on steel, aluminum, and other strategic goods. For certain product categories — particularly electronics, semiconductors, and solar panels — the effective rate exceeds 50%.

The tariff escalation has triggered a measurable shift in global supply chains. U.S. imports from China fell by 18% in value terms between 2024 and 2025, while imports from Vietnam, India, Mexico, and Thailand surged by 25-40% over the same period. However, customs authorities have increased scrutiny of transshipment — goods manufactured in China but routed through third countries to avoid tariffs — with CBP issuing over 200 Enforce and Protect Act (EAPA) investigations in 2025 alone.

For importers, the classification challenge is acute. Products with mixed-origin components require careful analysis under rules of origin to determine the correct country of origin for tariff purposes. A product assembled in Vietnam using 60% Chinese components may still be classified as Chinese-origin under the substantial transformation test, negating any tariff benefit from the relocation. Accurate HS classification is critical because even minor code differences can mean a 20-point swing in the applicable duty rate.

Companies are responding with three primary strategies: genuine supply chain diversification (relocating manufacturing to non-tariffed countries), product redesign to change HS classification, and increased use of Foreign Trade Zones (FTZs) to defer or reduce duty payments. Each strategy requires precise HS code analysis and ongoing monitoring to ensure compliance as tariff schedules evolve.

The U.S.-China trade relationship shows no signs of normalization in the near term. With the Supreme Court's IEEPA ruling removing one tariff mechanism, the remaining Section 301 tariffs — which have a stronger legal foundation — are likely to persist. Importers should plan for sustained elevated duties on Chinese goods through at least 2027.