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To fix this problem, a significant first step would be to begin a fair and open conversation about import duties in China compared to those in the US. Standard import duty into China is 10% of 110% of the declared value. Anyone can read the details of in Chapter 84 of the Harmonized Tariff Schedule of the United States. For importing machinery and machined parts into the USA the duty is 2.4% with many exceptions that are duty free. Unfortunately, this is only part of the sad story.

Adding to the problem is the fact that China has a point of entry Valued-Added Tax (VAT) of 17%.  This is compounded to the 10% duty so the overall duty is 30%. The Chinese would argue that the VAT is returned when the importer sells the goods but this is incorrect. Inside of China, very few companies pay the VAT.  So, the import VAT is effectively an extra-territorial tax because full payment is demanded at the point of entry. The American worker is getting abused by this and this abuse is growing every day.

Wage differentials between China and the US is a massive problem. Workers in the USA make $20 per hour. In China, they make $20 per day. At this rate, there is no way that a company looking for profits will turn to a US worker over a Chinese worker. I support the living wage of $20 per hour but we should have duties to protect our workers. China does it, why can’t the US? As you can see above, the duties are going the opposite way against the American worker.

Border harassment is another significant issue that must be addressed by the administration.  Take the icon of rapid service, Fed Ex - this company is caught in border issues on a regular basis - but only when they are flying in to China. When someone in the US places order from the massive Chinese company Alibaba, the items are shipped out of China via Fed Ex. Those orders are delivered the same day they come off the airplane. But, this ease of shipping does not work both ways. When an American company ships items to China, those American items are held in the Fed Ex office for weeks to months. At the border, the Chinese government finds ways to dispute the declaration in the package and want further documentation.

If we simply delayed imports from China the same amount of time that they delay imports from the USA we could save large numbers of American jobs.  Take the case of the profit driven corporation such as Apple or GE.  Apple not only manufactures everything in China but they also package, label and ship to individual customers from China.  Apple would not be able to warehouse and ship from China if there was even a small delay at the point of entry.  The American worker gets nothing.  Unfortunately, the profit driven corporations are the ones with the seat at the table in Washington DC.  The family owned and small businesses that are committed to hiring the American worker have no voice in Washington DC.