8507.20.40

Analysis

HTS 8507.20.40 covers of a kind used as the primary source of electrical power for electrically powered vehicles of subheadings 8703.40, 8703.50, 8703.60, 8703.70 or 8703.80 under heading 8507 (electric storage batteries, including separators therefor, whether or not rectangular…).

The general duty rate is 3.5% of the customs value, which is above most the rates in chapter 85 (83rd percentile of 624 lines with an ad valorem rate). On a shipment valued at $10,000 that is $350 in duty before any Chapter 99 additions or preference claims.

Neighbouring lines carry rates from 2.5% to 3.5%, so the exact line matters. The widest gap is with 8507.30.80 (nickel-cadmium storage batteries: other), at 2.5%: a product that belongs there but is entered here, or the reverse, changes the duty by 1 percentage points.

The column 2 rate, for countries without normal trade relations, is 40%, 11.4 times the general rate.

Goods that qualify under GSP, the Australia FTA, the Automotive Products Trade Act, the Bahrain FTA, the Chile FTA, and 13 others can enter duty-free instead of paying 3.5%. It is also eligible under GSP, the developing-country programme, which Congress has to renew; check whether GSP is in force on the entry date.