A Fresh Look at Small and Medium Enterprise Exports to China
The U.S.-China Phase One Deal can help small businesses increase sales to China
The U.S. Government and U.S. Small Business Administration are here to assist you with going global and increase sales to China or expand into other markets. As has been widely publicized, under the landmark U.S.-China Phase One Economic and Trade Agreement, China committed to importing no less than $200 billion of U.S. goods and services in specific areas on top of the amounts imported in 2017.
U.S. small businesses should also know that China recently began accepting online applications for exclusions from China’s Section 301 retaliatory tariffs on many of the U.S. goods that China has committed to purchase. Applications for exclusions can be submitted by China-based importers.
Who will benefit from this? A wide variety of small businesses in the United States will, including producers of agricultural and manufactured products. China published a notice listing 696 eligible 8-digit tariff lines specifically identified for tariff exclusion applications. The notice also states that applications could be submitted for products not on that list.
U.S. companies can reach out to their Chinese customers, partners and distributors to see how to they can help supply demand and provide information on how to apply for exclusions. Exclusions that are granted are specific to individual importers and products based on monthly purchase plans. The process can take three business days for review after submission. A complete list of products identified for increased Chinese purchases is provided in the Expanding Trade Chapter of that agreement, which is available on the U.S. Trade Representative website.
On top of this, China announced exclusions for certain other products that are available to all importers, including certain hardwood lumber and medical supplies. A translation of the announcement and links to Exclusion List I and II are available in the U.S. Department of Agriculture’s Global Agriculture Information Network (GAIN) report on hardwood lumber. China has also taken other steps forward and further reduced certain additional tariffs as detailed in USDA and USTR Announce Progress on Implementation of U.S.-China Phase One Agreement.
The SBA’s State Trade Expansion Program State grantees offer grants to U.S. small businesses for help identifying new customers. SBA Resource Partners, such as the Small Business Development Center (SBDC) Network and the Service Corps of Retired Executives (SCORE), can assist with Export Business Plan updates, e-commerce and digital marketing business counseling and mentoring, and research. As a reminder, both STEP grants and SBA Export Express Loans can support translation of websites and materials for reaching consumers in China and other markets.
U.S. small businesses with questions about SBA and interagency support for going global or overcoming challenges can reach out to the SBA International Trade Ombudsman Hotline at (855) 722-4877 and firstname.lastname@example.org for additional information on support exporting or overcoming challenges. For information on the current COVID-19 announcements and small business resources, visit USAID and email@example.com.