You are probably familiar with the taxes and tariffs charged when a product is imported into your country. The same charges apply to goods entering China, and a few apply to goods leaving it. A tariff is a tax on a class of imports or exports, and China tariff barriers, together with the non-tariff barriers of quotas, licences, and standards, are how China directs its trade. This article covers the tariff side: what China charges at the border, how it is calculated, and what it is for.
China tariff barriers divide into three taxes: value-added tax, consumption tax, and customs duty. Customs duty rates range from zero to over 100%, though the average is far lower than the extremes suggest. China’s average applied tariff on manufactured goods has fallen from over 40% in 1992 to around 7.5% today (WTO), as the country reduced tariffs on WTO accession and in successive annual adjustments since. Since 2018, additional tariffs on goods from specific countries, above all the United States, have been layered on top of the standard rates, and those change with the political relationship rather than with trade policy.
China Tariff Barriers: Current Taxes and Tariffs
Value-Added Tax (VAT)
All goods imported into China are subject to VAT, paid before customs releases the goods, at the rate that applies to the same goods produced domestically. The standard rate is 13%, with a reduced 9% rate for agricultural products, utilities, books, and some other categories, and 6% for most services; the rates were cut from 17% and 11% in 2018 and 2019. VAT is the first of the China tariff barriers a buyer meets, and it compounds on the others, because it is calculated on the goods’ value after duty and consumption tax.
Two terms are needed for the calculation. The Duty Paying Value (DPV) is the customs value of the goods, in practice the CIF price: goods plus freight plus insurance to the Chinese port. The Composite Assessable Price (CAP) is the DPV plus customs duty plus any consumption tax. VAT is then:
VAT = CAP × VAT rate
For goods leaving China, exporters can reclaim some or all of the VAT paid on inputs at a rebate rate set per product category, and manufacturers build the rebate into their export price. That is why domestic and export prices differ, and why a cut in the rebate rate for a category raises export prices overnight.
VAT is the most common tax, and one that has to be considered for trade as well.
Consumption Tax
The second of the China tariff barriers, consumption tax, applies to imports, not exports, and only to a defined list of goods: luxury products such as high-end jewellery, watches, and cosmetics; high energy-consuming goods such as passenger cars and motorcycles; non-renewable petroleum products; and goods judged harmful to health or the environment, tobacco, alcohol, fireworks, batteries, and coatings. Rates range from around 1% to 56%, so the rate for a specific product has to be checked. It is calculated on one of three bases:
- Ad valorem: Consumption tax = composite assessable price × consumption tax rate
- Quantity basis: Consumption tax = quantity of taxable goods × tax amount per unit
- Compound basis: the sum of the two, used for cigarettes and some alcohol
For the ad valorem basis, the composite assessable price is worked out as (DPV + customs duty) ÷ (1 − consumption tax rate), so that the tax is applied to a price that already includes it.
Customs Duties
Customs duty is what most people mean by China tariff barriers. It is charged on the DPV at a rate set by the product’s tariff line and its country of origin. China publishes its rates annually; the 2026 Tariff Adjustment Plan (Customs Tariff Commission Announcement 2025 No. 11), in force from 1 January 2026, runs to 8,972 tariff lines and applies provisional rates below MFN on 935 of them. The rate that applies depends on origin:
- MFN rates for goods from WTO members and countries with a bilateral MFN agreement, which is nearly all trade
- Conventional rates, lower than MFN, for goods qualifying under one of China’s 24 free trade agreements with 34 partners, including RCEP and ASEAN
- Special preferential rates, zero on all tariff lines, for 43 least-developed countries
- General rates, much higher, for goods from countries with no MFN arrangement, rarely applied
- Tariff-rate quota rates, zero within the quota, for wheat, corn, rice, cotton, sugar, wool, and fertiliser
- Provisional rates, temporary reductions on goods China wants to encourage
- Additional tariffs on goods from the United States and, since 2025, Canada, imposed in response to those countries’ tariffs on Chinese goods, and adjusted several times
Customs duty, the third of the China tariff barriers, is calculated as DPV × duty rate for ad valorem duties; a small number of goods carry specific duties per unit. The total cost of importing a good into China is DPV plus customs duty plus consumption tax plus VAT, and the three taxes compound in that order.
Duty, consumption tax, and VAT compound on each other; the order of calculation matters.
Export Duties
China tariff barriers on exports are few: most goods leave China without duty. The exceptions are a short list of resource-based and semi-manufactured products, 107 tariff lines under the 2026 plan, 68 of them at provisional rates, concentrated in ferroalloys, certain metals and ores, and other raw materials, taxed to keep domestic resources at home. Export duties rarely affect finished goods. The export-side China tariff barriers that do affect buyers are the VAT rebate changes described above, and, since 2025, export licensing on rare earths and certain metals, which is a control rather than a tax.
The Purpose of China Tariff Barriers
Tariffs raise revenue and protect domestic industry, and China tariff barriers have done both. In the 1990s customs duty was a major source of government revenue and the primary tool for protecting infant industries; as the economy grew and China joined the WTO, tariffs fell and the protective role shifted to non-tariff measures and industrial policy. Today the structure of China tariff barriers reflects industrial strategy more than protection: duties are cut every year on the advanced components, materials, and equipment China wants its manufacturers to import, and kept on the finished goods, cars and luxury products above all, where domestic producers compete. The consumption tax, meanwhile, is as much a policy on consumption as on trade.
For a company buying from China, the standard tariff barriers are largely irrelevant; the goods leave without duty and with VAT rebated. What matters is the tariff at your own border, which since 2018 has been the largest single variable in the landed cost of Chinese goods. For a company selling into China, the compounding of duty, consumption tax, and VAT can add 30% or more to the CIF price of a consumer product, and getting the tariff classification right decides which rate applies. Working out the landed cost in either direction, including classification, the applicable rate, and any additional tariffs in force at the time of shipment, is part of what our product sourcing service provides.
