The effect of incresed 25% tariff to our MIM powder by USA
The Trump administration has announced a new round of tariffs that impose a 10% tariff on Chinese imports valued at $200 billion. MIM powder is also one of them. On May 9, 2019, these tariffs were raised to 25%. So will that affect us to export our MIM powder to the USA MIM factories?
In our opinion that the impact is minimal. First, after the tax increase, the depreciation of the RMB against the US dollar has also been increased. The RMB is not worth the money, and the US dollar paid by the customers will be correspondingly reduced. According to our statistics, since the tax increase, the exchange rate fluctuation can offset the 10% tax. In addition, China has also imposed protection measures on tariffs in the United States. The original tax rebate rate for MIM powder exports is 0%, and the tax rebate rate for MIM powder is now 10%. In this way, our company will give 10% back to the customer's offer. The final customer gets our powder only 5% higher than before, and for this 5% increase, our company can also bear half of it. That is to say, after the tax increase, the customer who buys our MIM powder only pay 2.5% more than before the tax increase.
Therefore, there is absolutely no need for the US MIM factories to worry that the import of MIM powder from China will lead to an increase in costs.