I get recurring questions about the classification of aircraft parts for both exports and imports. This is a more complicated process than it might seem, at first.
When importing goods, the goods need to be identified with the proper Harmonized Tariff Schedule (HTS) tariff classification. This tariff classification also helps to identify the correct duty that must be paid upon the import of the goods.
When exporting goods, the exporter needs to identify the schedule B number for the goods. These numbers are analogous to the HTS numbers, but they sometimes diverge, so it is also important to look them up separately.
Many ASA members have approached me about whether they can “hit the easy button” and assume that all aircraft-related parts are classified under chapter 88 (which applies to aircraft parts). This would not be correct! Some aircraft parts are classified under other chapters.
When classifying goods under either the HTS or Schedule B, you must select the classification that most accurately describes your goods. For example, if you are importing vulcanized rubber o-rings for use on an aircraft, then you will have a choice between an aircraft parts classification under heading 8807 or:
4016.93.5010: Other articles of vulcanized rubber other than hard rubber: Gaskets, washers and other seals: Other: O-Rings.
Clearly, the O-Rings line in chapter 40 reflects a much more precise description of those O-Rings. It is therefore the more appropriate classification. Some of the places in the HTS and Schedule B where you will find more precise classifications for aircraft parts include the following:
Tires under heading 4011-4012
Other rubber products under chapter 40
Brakes in Chapter 68
Certain steel, iron, and aluminum products, like fasteners: Codes in chapters 72, 73, and 76
Aircraft safety glass under subheading 7007.11
Engines and engine parts under chapter 84
Stators, rotors, generators and electrical parts under chapter 85
Certain electronic integrated circuits, including those within heading 8542
Lithium-ion batteries under subheading 8507.60
Battery parts under subheading 8507.40
Inertial Measurement Unit under subheading 9014.20
Aircraft seats under subheading 9401.10
Each of these may end up being more precise than a classification under heading 8807 (8807 applies to aircraft parts). The classifications under heading 8807 are useful for many aircraft parts, but if there is a more precise and accurate description under another classification then the more precise and accurate description should be the one that it is used.
We will be covering this issue (selection of tariff numbers for imported aircraft parts) in ASA’s tariff webinar, tomorrow. The ASA webinar will also examine some of the new tariffs, and will discuss how to read a tariff so that you are better prepared for the upcoming tariffs that have been promised. The webinar is free for ASA members please register to make sure you can get a seat), and available for a nominal price to non-members.
We’ve been answering a number of questions from our members about tariff status. This article is meant to summarize what we know about recent tariff activity, but the administration hasn’t maintained a uniform message about tariffs, so what we know could change at any time.
The United States has applied a 10% tariff in addition to any pre-existing tariffs that already applied to aircraft parts from China.
It is important to recognize that there is an existing list of products of China that were already subject to a 25% ‘additional duty’ provision. This is described under subheading 9903.88.01 and the description can be found under U.S. note 20(b) to sub-chapter III of chapter 99 of the US Harmonized Tariff System. Many aircraft parts are subject to a 25% duty under this provision, including those under (for example) headings 8409, 8411, and 8807. This means that the additional 10% duty of tariff 9903.01.20 brings the import duty on those aircraft parts to 35% (assuming they would have been otherwise subject to a zero-duty entry, but-for the ‘additional duty’ provisions, e.g. aircraft parts under headings 8409, 8411, or 8807).
Because of the peculiar way that the China tariffs had been drafted, it is possible that articles subject to a non-zero base duty may have that base duty doubled (see this article for a detailed explanation). This is a non-issue for most aircraft parts because most are subject to a zero percent base duty rate, but some aircraft parts (like certain fasteners) have a non-zero base duty and the peculiarities will need to be resolved for those imports.
Canada and Mexico
The United States is scheduled to impose 25% tariffs against substantially all products of Canada and substantially all products of Mexico. In each case the tariffs are currently schedule to apply to Canadian imports and Mexican imports as of 12:01 am March 4, 2025. The tariffs (which are the description of how the duty rates will be applied) were withdrawn when the Canada and Mexico tariffs were delayed, so the republished tariffs could change.
Typically, the 25% tariff would be applied to the import value of the goods (25% of the value is charged as a duty). When the goods are exported from the United States for the purpose of obtaining repair abroad, and then subsequently returned to the U.S., the dutiable value upon return is typically calculated based on the parts-and-labor-cost of the MRO work that was accomplished abroad (unless it is a no-charge repair, like a warranty repair, in which case it is based on the fair market value of the repair). This is covered under chapter 98 tariff subheadings like 9802.00.40 (for warranty repairs) or 9802.00.50 (for non-warranty repairs). The goods would be subject to a basic duty based on the repair value times the rate that applies to the underlying good. For example, if the repair cost was $20,000 and the underlying aircraft part was subject to heading 8807, then the old rate of duty would be zero percent so the duty would be zero dollars. Under the new tariffs with the 25% duty rates, though, if the repair cost was $20,000 and the tariff on products of the country in which the repair was performed is at a 25% duty rate, then the U.S. importer to whom the repaired part is returned (from Canada) would need to pay an import duty of $5,000 (in addition to the repair cost).
Steel and Aluminum
The Administration has also issued orders to apply and increase duty rates on steel and aluminum (including plates, sheets, strips, bars, rods, tubes and wires). The new duty rates for aluminum from most countries will be 25% (in addition to any other applicable tariffs). Derivative products made from aluminum or steel will also be subject to a 10% duty (in addition to any other applicable tariffs). The executive order that announced these is quite complicated, with different phase-in dates for different countries, and some higher duty rates for certain countries (for example Turkey will face a 50% duty rate on all steel articles imports and Russia will face a 200% duty rate on imported derivative aluminum articles).
If you think that the steel or aluminum tariffs may apply to your imports then please be sure to read the tariffs thoroughly (don’t just rely on this blog article because there are too many details to republish them all here).
Other Targets
In tomorrow’s Federal Register, we expect to see a new request from the U.S. Trade Representative (USTR). The new request will ask the American people to identify any unfair trade practices by other countries, with a discussion of the harm to the United States. The draft publication refers to these as non-reciprocal trade arrangements so it appears that the Administration (which has threatened to implement reciprocal tariffs) may be looking at such arrangements as justifications for tariffs on comparable products from these source countries. This investigation is a response to the “America First Trade Policy” Executive Order.
A lot of articles are being written about the President’s tariff threats. It continues to be a wild ride. As I am writing this, it has been reported that Mexico and Canada have agreed to increase border security, and the President has agreed to a 30-day suspension of the tariffs on Mexico and Canada. There does not yet seem to be a deal to delay the China tariff. You can see copies of the executive orders linked in the “Resources” section, below.
The actual tariffs are important – they are the written expositions of what is subject to duty and how much duty will apply. They answer the questions of whether the tariffs will apply to your specific transaction. Unlike the Executive Orders, which leave open questions, the tariffs are typically more precise and often address questions that are likely to arise.
As discussed in our earlier article, there are many aircraft and engine articles manufactured in other countries that could be imported into the U.S. and thus could be subject to the new ‘additional duty’ provisions.
The tariffs are scheduled to be published on February 5, 2025 in the Federal Register. As they are drafted, the ‘additional duty’ provisions set out in the tariffs will be effective with respect to articles of Canada and the People’s Republic of China, if those articles are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on February 4, 2025 (e.g. any time starting on Tuesday the 4th). This generally includes aircraft parts imported as products of these jursidictions. So this means that the tariffs that are scheduled to be published will be (would be?) effective in a matter of a few hours from now.
Based on the reported White House announcements (about the 30-day suspensions), it seems likely that the U.S. government will file a subsequent amendment suspending application of the new tariffs for thirty days (consistent with today’s Executive Order).
Either way, there is a distinct possibility that sooner or later, we will need to know the specifics of the tariffs as they apply to the aviation community.
Table of New Tariffs (Summary)
Tariff #
What is Subject to the Tariff?
Duty for most articles
9903.01.10
“All products of Canada,” except for certain donations, certain informational products, certain oil, gas, minerals and energy products, baggage, and things that were in transit when the tariff was published.
25%
9903.01.20
“All products of China,” except for certain donations, certain informational products, certain oil, gas, minerals and energy products, baggage, and things that were in transit when the tariff was published.
10% [in addition to already existing tariffsfor a selection of goods]
Special Notes
SCOPE:
In plain English, most aircraft parts will fall within the scope clauses of the Canadian and Chinese tariffs as they have been drafted. As discussed below, this will also include repairs performed in Canada or China.
CHINA:
It is important to recognize that there is an existing list of products of China that are already subject to a 25% ‘additional duty’ provision. This is described under subheading 9903.88.01 and the description can be found under U.S. note 20(b) to subchapter III of chapter 99 of the US Harmonized Tariff System. Many aircraft parts are subject to a 25% duty under this provision, including those under (for example) headings 8409, 8411, and 8807. This means that the additional 10% duty of tariff 9903.01.20 brings the import duty on those aircraft parts to 35% (assuming they would have been otherwise subject to a zero-duty entry, but-for the ‘additional duty’ provisions, e.g. aircraft parts under headings 8409, 8411, or 8807).
MEXICO:
You might note that I have not mentioned the new tariff for products from Mexico. That is because the new tariff for products from Mexico has not yet been made a part of the Federal Register’s records. It is possible that a tariff for products from Mexico will be published a day later, on February 6, 2025. It is possible that the Mexico tariff is more complicated and thus is simply not yet ready to be published. IT is also possible that the Mexican ‘deal’ was struck early enough that the Tariff publication could be delayed, while the Canadian ‘deal’ may have come too late to forestall submission of the tariff to the federal Register.
REPAIRS:
The Chinese and Canadian ‘additional duty’ provisions specifically state that they apply to the value of repairs.
What about articles sent to Canada for repair? Typically, U.S. articles repaired abroad and then returned to the United States (or articles for which a duty was previously paid that are subsequently sent to Canada for repair) are charged a duty based on the added value associated with the repair. This added value is typically equal to the cost of the repair (unless it is a no-charge repair, in which case it is based on the fair market value fo the repair). This is covered under chapter 98 tariff subheadings like 9802.00.40 (for warranty repairs) or 9802.00.50 (for non-warranty repairs). The goods would be subject to a basic duty based on the repair value times the rate that applies to the underlying good. For example, if the repair cost was $20,000 and the underlying aircraft part was subject to heading 8807, then the rate of duty would be zero percent so the duty would be zero dollars. Under the new tariffs, though, if the repair cost was $20,000 and the tariff is at a 25% rate, then the U.S. importer to whom the repaired part is returned (from Canada) would need to pay an import duty of $5,000. This requirement appears to be suspended with the remainder of the Canadian tariff, but if the Canadian tariffs go into effect in March, then the application to repairs will still apply.
Obviously, anything sent to China for repair will be subject to the applicable tariffs as applied to the value of the repair; the tariffs for imports of goods and repairs from China have not been suspended.
The United States and China continue to snipe at one another through their export and import laws. The latest actions appear to have the potential to affect the aviation community.
US Import Tariff Increases
The United States announced increased import duties for certain goods imported from China. Duties are paid by the U.S. importers, so the tariffs that impose these duties are intended to incentivize importers to source their goods from nations other than China.
The new tariff changes were proposed by the USTR on May 28, and they are open for comment through June 28, 2024. The new tariffs changes that are most likely to affect the aerospace industry include (this is a partial list only!):
Good
Tariff Codes
Old Tariff
New Tariff
Proposed Effective Date
certain steel and aluminum products
many codes in headings 7206 – 7229, 7301-7306, and 7601-7609
Reuters is reporting that China’s Commerce Ministry has announced new export controls on certain aviation components. The new regulations will impose licensing requirements on additional aviation components. These will apparently apply beginning on July 1, and are intended to protect China’s national security and interests.
Earlier today, Chinese Premier Li Qiang emphasized China’s rule-of-law approach. He called on Chinese government officials to raise their awareness of the rule of law and perform their duties in accordance with the law to ensure law-based government work. This seems likely to cause stricter adherence to China’s export restrictions.
ASA reviewed releases from the Ministry of Commerce and the State Council but could not yet find the details of these export restrictions. We will continue to monitor for details.
As we wrote last month, the EU has issued new rules that are meant to help ensure compliance with Russia sanctions. These rules include a requirement for certain iron and steel articles to certify the source of the metals when these articles are imported in to the EU (to ensure the metal is not sourced from Russia). The EU has published a FAQ that provides an exception for parts produced before June 23, 2023.
As a practical matter, ASA members in the EU who are importing, and ASA members outside the EU who are exporting to the EU, need to make sure they can document source of the metal for certain articles. These iron and steel articles include, but are not limited to:
screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers, incl. spring washers, and similar articles, of iron or steel under CN Heading 7218;
wire of alloy steel other than stainless, in coils (excl. bars and rods) under CN Heading 7229;
containers of iron or steel, for compressed or liquefied gas under CN Heading 7311;
air heaters and hot-air distributors under CN Heading 7322;
lavatory fixtures under CN Heading 7324;
articles of iron or steel regulated under CN Heading 7325 or 7326.
While the CN Headings are quite similar to the Harmonized Tariff Code Headings, it is wise to look directly at the European Union’s CN Headings to make sure you are properly characterizing your goods under EU law. Bear in mind also that this new rule applies to articles processed outside the EU.
If you have an article that is affected by the new rules, then you will need evidence of the country of origin of the iron and steel inputs used for the processing of the product. This must be available at the time of import into the EU.
Does the application of Article 3g (1) (d) of Regulation (EU) No 833/2014 also extend to products that were manufactured or processed in a third country before 30 September 2023? Last update: 2 October 2023
The prohibition applies to imports of iron and steel products incorporating inputs originating from Russia that enter the Union as of 30 September 2023, provided that they were manufactured or produced after 23 June 2023. That is the date when the obligation for the importer to demonstrate the country of origin of the iron and steel inputs used for the processing of the product in a third country was introduced in EU law. Coupled with the almost one-year wind-down period of the prohibition itself, this should have allowed an orderly planning of imports into the Union of the relevant goods before 30 September 2023. If the abovementioned goods are already in the territory of the Union and have been presented to customs before 30 September 2023, Article 12e applies and they can be purchased or transferred after that date (see Q3).
This means that articles that would be subject to the new EU import documentation rule, but were produced before June 23, 2023, are not required to bear the applicable documentation. As a practical matter, this is likely to mean that you will need documentation to show that the article was produced before June 23, 2023. This can include trace documentation showing commercial transactions before the date, an approval for return to service showing maintenance before the date, or an authorized release document that shows that the article was produced/approved before the date. Such documentation should be made available to prove that the article is exempt from the EU’s metals-sourcing-documentation requirement.
The EU has targeted Russian metals as a key element of their Russia-sanctions program. These sanctions have come to the attention of the aircraft parts industry because some EU importers are asking their export partners to certify that the metals in the aircraft parts did not come from Russia. In many cases, though, the request is NOT applicable to aircraft parts.
Executive Summary
The new EU import restriction is tied to certain categories of parts – namely certain parts in CN chapters 72 and 73. These chapters describes iron, steel, and things made from iron and steel. But the CN Code rules require you to use the most specific applicable CN code, and aircraft parts are typically going to be categorized under a more specific chapter (rather than chapters 72 or 73).
Most aircraft parts fall into CN chapters 84 (engines and their parts) or 88 (aircraft and their parts). So they are not affected by the new requirements to certify origin of the steel.
It is possible for a distributor to export chapter 72 (iron and steel) or chapter 73 (articles of iron or steel) materials to the EU (in which case the restrictions apply). If you are exporting affected material to the EU, then the importer will likely rely on you to provide evidence of the country of origin of the iron and/or steel.
To be clear, most aircraft parts are not affected by the requirement for proof that the metal did not come from Russia.
The Longer Analysis
The EU has issued a comprehensive body of sanctions against Russia for its actions in the Crimean Peninsula and for its subsequent invasion of Ukraine.
On June 23, 2023, the EU adapted additional sanctions against Russia. These amended the existing sanctions programs against Russia, which date-back to 2014 (when Russia annexed the Crimean Peninsula). While the EU has taken various steps to support Ukraine during the Russia-Ukraine conflict, some of the most important sanctions are those targeting Russia’s iron and steel industries. The newest amendments to the EU sanctions are specifically intended to address circumvention efforts.
The new sanctions apply to the import into the EU of iron and steel products where the iron or steel came from Russia. This includes materials like bar stock as well as certain finished articles. These new sanctions require the importer to confirm that the iron and/or steel did not come from Russia, which is why EU importers are asking for certifications that the materials did not come from Russia.
The newest sanctions are tied to the EU’s combined nomenclature (CN) codes. CN codes are based on the harmonized tariff code system. Why does the EU give it a different name? Because the EU has modified the harmonized tariff code system by adding additional subheadings to further distinguish imported products. But the CN code system still uses the same chapter numbers and heading numbers (and related descriptions) as the harmonized tariff code system. This will become important later in the analysis when we get to compliance strategies.
There is a very lengthy table of iron and steel products subject to the new regulations, but here are some excerpts that are potentially relevant to the aviation community:
CN Code
Official Description
Examples of Things that an Aircraft Parts Distributor Might Import into the EU that May Fall Under this Provision
7229
wire of alloy steel other than stainless, in coils (excl. bars and rods)
steel wires
7311
containers of iron or steel, for compressed or liquefied gas (excl. containers specifically constructed or equipped for one or more types of transport)
steel tanks used for compressed gasses, like oxygen or carbon dioxide
7318
screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers, incl. spring washers, and similar articles, of iron or steel (excl. lag screws, stoppers, plugs and the like, threaded)
iron or steel fasteners
7325
articles of iron or steel, cast, n.e.s.
other things made of iron or steel that were produced through casting, and are regulated under harmonized tariff code 73
7326
articles of iron or steel, n.e.s. (excl. cast articles)
other things made of iron or steel that were not cast, and are regulated under CN chapter 73
Excerpted from Annex V to Regulation (EU) No. 2023/1214, which amended Annex XVII to Regulation (EU) No. 833/2014.
The main message you should be getting from this chart is that if you are dealing in iron or steel things that are categorized under tariff chapter 72 or chapter 73 then you need to look carefully to see if they are subject to the new EU regulations that are meant to prevent circumvention. If you are exporting these sorts of articles to the EU, then they are likely covered under the sanctions provisions and if they are then you will need to support your importer with compliance documentation.
Aircraft parts fall under a wide variety of tariff codes (CN codes in the EU). In particular, the requirements likely do not apply to aircraft parts categorized under harmonized tariff codes in chapter 84 (engines and their parts) or chapter 88 (aircraft and their parts).
Note that some additional aircraft parts CN Codes under chapter 73 include air heaters and hot-air distributors made of iron or steel (7322) and certain iron or steel lavatory fixtures (7324). Both of these headings appear in Annex XVII so each would be subject to the compliance obligations of the new rule.
Compliance Strategy
For aircraft parts distributors, the first thing to do is to ascertain whether your articles are subject to these requirements. The new amendment to the EU sanctions regulations includes a revision to Annex XVII.
Note that most aircraft parts are categorized under CN chapter 84 (engines and their parts) or Chapter 88 (aircraft and their parts) [these are not exclusive – many aircraft parts can fall under other chapters so be sure you are accurately categorizing your parts]. The new non-circumvention rule applies to certain headings found in chapters 72 and 73 only. If you know that 84 or 88 is the proper chapter for your articles, then your analysis of this particular regulations may be complete!
When we export parts from the United States, it is normal to identify a schedule B number. While the specific descriptors and subheadings can vary, the chapters and headings should be the same between the United States Schedule B (for export out of the US) and the European Union CN Codes (for import into the EU). When exporting from the United States, look at the first two numbers of your Schedule B number (this is called the “chapter”); if the number is NOT 72 or 73 then your analysis for compliance to this particular requirement is done. If the chapter is 72 or 73, then you need to continue your analysis. Look at the first four numbers of your Schedule B number (this is called the “heading”) and compare it to the numbers in Annex XVII. Make sure you are using the most up-to-date version of the Annex – the links in this article were up-to-date on the date of publication but they can be superseded! If the heading number matches a CN Code in Annex XVII, then the final step is to examine where the product was processed. The rule applies to products processed outside of the EU. If your product is described by a CN Code on Annex XVII, and it was “processed” outside of the EU, then your export to the EU will likely need to be accompanied by evidence of the country of origin of the iron and steel inputs used for the processing of the product.
Compliance For Affected CN Codes
So what do these sanctions provisions really say? The pre-existing sanctions provisions had already prohibited importing iron and/or steel articles that came from Russia or that were produced in Russia. The new provisions are meant to prevent circumvention of the sanctions.
Under the recently-amended EU sanctions provisions, it becomes illegal for persons in the EU to import or purchase iron or steel articles listed in Annex XVII (which is a list of articles regulated under CN chapters 72 or 73 ) that were processed in a third country if they incorporated iron and/or steel products originating in Russia. The Annex lists a wide variety of different forms that iron and steel can take (e.g. semi-finished articles, flat-rolled product, bar or rod stock, tubes, wires, etc.). This can be interpreted to mean that if the iron or steel came from Russia, even if it came from Russia before sanctions, then it is prohibited from import into the EU.
I know I’ve said this before, but an important distinction is that Annex XVII (as recently amended) includes articles whose CN codes begin with 72 and 73. Most aircraft parts are found in Chapters 84 (engines and their parts) or 88 (aircraft and their parts), so their CN codes begin with 84 or 88.
If you’ve got affected material that you want to export to the EU, then the operative requirement comes in the sentence that reads:
For the purposes of the application of this point, at the moment of importation, importers shall provide evidence of the country of origin of the iron and steel inputs used for the processing of the product in a third country.
This means that the importer of this affected material needs to get evidence of compliance (such as a certification that the iron/steel did not come from Russia).
This new requirement applies starting September 30, 2023.
Very little is being imported from Russia these days, but if you are importing Russian aviation products then you need to be aware of the unusual tariff treatment of those goods.
There is a “column two” in the harmonized tariff system of the United States. Column two is used for nations with whom the United States does not have normal trade relations (currently Cuba, North Korea, Russia and Belarus). Column two imposes much higher import duties. In April, Congress (P.L. 117-110 § 3(a) (April 8, 2022)) determined that column two would apply to products of Belarus and Russia. This means that aircraft parts from these two jurisdictions lose their duty-free status.
In today’s Federal Register, the President proclaimed a change in the column two duties that apply to many products from Russia, including certain aviation products and parts. This does not (yet) apply to Belarus. In essence for any affected goods, the 35% duty replaces whatever duty was normally established in column two.
For example, imagine you are importing a unit load device that is a product of Russia. It falls under tariff code 8609.00.00.00, which is for containers. As a container, it would have been subject to free (zero duty) entry under column one, but it would have been subject to a 25% duty under column two.
But under the new tariff rules, the same container will be subject to a 35% duty if it is imported from Russia.
Many aircraft parts under heading 8807 will be affected by this new rule (including those under 8807.10.00, 8807.20.00, 8807.30.00 and 8807.90.90. These new tariff rules apply only to Russia (not Belarus) and they go into effect on July 27, 2022.
The White House has announced that it will be issuing sanctions “to respond to President Putin’s action to purportedly recognize the so-called Donetsk and Luhansk People’s Republics (DNR and LNR) as “independent” states.” What does this announcement mean for ASA members who have Russian or Ukrainian business partners?
At the root of the sanctions is an Executive Order that was signed last night. It defines the “Covered Regions” as the areas covered by the Donetsk People’s Republic (DNR) and the Luhansk People’s Republic (LNR). It also authorizes the Secretary of the Treasury to identify other parts of Ukraine to be identified as a part of the Covered Regions (typically this would be accomplished through an OFAC rule, so it will be important to watch whether this scope expands to include other parts of Ukraine).
The Executive Order prohibits investment in the Covered Regions;
The Executive Order prohibits export (or other sale/supply) to the Covered Regions;
The Executive Order prohibits import from the Covered Regions;
The Executive Order prohibits participation by a United States person in a transaction by a foreign person that would have been prohibited in the United States.
The Executive Order also permits the addition of people and entities to the Specially Designated Nationals (SDN) list, so it will be important to check our business partners against this list for each export transaction (you should already be doing this).
Previously issued licenses may not cover this new Executive Order, so they may be inadequate to overcome this new Executive Order’s restrictions. Thus even a previously licensed transaction may require a new license if it is within the scope of the Executive Order.
Don’t forget that there are existing sanctions against Russia and the Crimean region. So make sure that you comply with those, as well. The White House has signaled that more sanctions may be issued, soon, against Russia; this means that keeping abreast of the changing regulations and standards is especially important.
There are special wind-down rules. If you need to engage in a wind-down operation to exit business in the Covered Regions, then make sure you consult with an attorney, and review the OFAC wind-down general license.
In summary, if you’ve been buying from or selling to a partner in a Covered Region, then you will need to assess your aircraft parts transactions to ensure that they remain in compliance with the law – full compliance may require a new license, or it may require termination of the business. I would recommend against any aircraft parts transaction that involves the Covered Regions unless you have the advice of an attorney who understand this area of the law.
The tariff codes for aircraft parts will change, effective January 27, 2022 (the thirtieth day after publication in the Federal Register).
Most importers are used to assigning tariff codes in the form 8803.XX.XXXX to their aircraft parts. These tariff codes are being replaced! So if you have been using a tariff code that starts with 8803, then it is likely to have been changed to a new tariff code that begins with 8807.
The new tariff codes were announced in Proclamation 10326. The Proclamation cross references ITC Publication 5240, which provides the specific new tariff codes:
Heading
Subheading
Article Description
8807
Parts of goods of heading 8801, 8802, or 8806
8807.10.00
Propellers and rotors and parts thereof
8807.20.00
Undercarriages and parts thereof
8807.30.00
Other parts of airplanes, helicopters or unmanned aircraft
8807.90.00
Other:
8807.90.30
Parts of communications satellites
8807.90.30
Other
Remember! Not all aircraft parts are imported under Heading 8803. for example, engine parts have their own Heading.
The US-China trade conflict, and the negotiations seeking to settle it, remain as front-page news. But there are some quiet behind-the scenes changes that are creating narrow exclusions for certain types of goods. Just not for aircraft parts.
Although the United States has imposed duties on aircraft parts from China, the United States Trade Representative (USTR) initiated a product exclusion process in June 2019. This permitted “interested persons” to request exclusion of specific products from the tariff schedules. On Monday, the government announced new exclusions.
The government created new exceptions for valve lifter (for piston engines) but specifically excluded valve lifters for aircraft engines. This shows us that aviation parts remain a focus for the USTR.
Details of the ‘Phase One” trade deal between the US and China have not yet been released, but it appears likely that aircraft parts will not be given relief under that “phase one” trade deal.
Meanwhile, China appears to be reducing certain duties charged for imported US goods. They’ve announced targetted tariff reductions and published a list of 859 products for which the duties are being lowered in 2020. Some of the key aviation-related tariffs listed in this table include these five:
Chinese Tariff Code
Chinese Good Description
Google translation – the original Chinese takes precedence!
Most favored nation tax rate in 2020 (%)
Provisional tax rate in 2020 (%)
7007 1110
空载重量25吨及以上飞机的挡风玻璃
Windshield of aircraft with an unladen weight of 25 tons and above
2
1
8412 2990
压力值在20MPa以上的飞机用液压作动器
Hydraulic actuators for aircraft with pressures above 20 MPa
14
1
8482 1040
飞机发动机用外径30CM的推力球轴承
Thrust ball bearings with an outer diameter of 30CM for aircraft engines
Aircraft autopilot system (including autopilot, electronically controlled flight, automatic fault analysis, warning system trim system, thrust monitoring equipment and related instruments)
Aircraft autopilot system (including autopilot, electronically controlled flight, automatic fault analysis, warning system trim system, thrust monitoring equipment and related instruments)
5
1
Note that based on the translations, the Chinese Tariff Codes do not appear to line-up with the corollary tariff codes in the US Harmonized Tariff Schedule.
You must be logged in to post a comment.