In the globalized business landscape, sourcing goods from China and shipping them to the United States involves many complex industry terms. Understanding these terms is crucial for USA buyers to conduct business smoothly, avoid risks, and ensure efficient operation of the supply chain. At the same time, being familiar with the certification requirements and related cases required for American imports can help buyers better cope with compliance challenges.
Table of content:
4. Payment and Financial Terms
5. Transport and Logistics Terminology
6. Warehousing and Inventory Terminology
7. Terminology of Trade Policies and Regulations
8. Quality and Certification Terminology
9. Packaging and Labeling Terminology
1. Basic Terms of Procurement
- PO (Purchase Order) : This is a formal purchase document issued by an American buyer to a Chinese supplier, which specifies in detail the specifications, quantity, price, delivery date and other key information of the goods, and is the core basis of the purchase transaction. For example, an American clothing retailer placed a purchase order with a Chinese Sourcing Agent, SourcingYuan , clearly requiring the purchase of 50pcs of USB,1200PCS of drive and a specific memory and so on.
procurement-Order
- Supplier : refers to an enterprise or individual that provides goods or services in China. In the eyes of American buyers, choosing the right supplier is the first step to successful procurement. Taking the procurement of electronic products as an example, American buyers may evaluate the production capacity, quality control system and price advantages of multiple Chinese suppliers and finally select a partner.
Servo-motor-production-line
- RFQ (Request for Quotation) : The process by which American buyers ask Chinese suppliers for prices and other transaction conditions for goods or services. For example, a restaurant in the United States plans to purchase a batch of Chinese tableware and sends RFQs to several Chinese suppliers, asking about the prices, minimum order quantities, and delivery times of different styles of tableware.
- Quotation : A document provided by a Chinese supplier in response to an inquiry from an American buyer, detailing the price, delivery date, payment method, and other information about a product or service. When making a quotation, the supplier will consider factors such as cost and market competition to provide buyers with an attractive solution.
quotation-bags-shoes-dress
- Purchase Contract : As a legally binding agreement between the buyer and seller, it specifies the rights and obligations of both parties. The contract terms cover product specifications, price, delivery, quality assurance, liability for breach of contract, etc. For example, SourcingYuan specified in detail in a furniture purchase contract the material, size, color, price adjustment mechanism, and compensation method if delivery is not on time.
- Sample : A small amount of products provided by Chinese suppliers to American buyers to evaluate whether the quality, performance, design, etc. meet the requirements. For example, American toy buyers will ask suppliers to provide samples before large-scale purchases to check the safety, appearance, and function of the toys . SourcingYuan will arrange logistics transportation to send the samples safely to the United States.
Juicers-of-various-specifications
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- QC (Quality Control) : The process of ensuring that products meet predetermined quality standards, including inspection, testing, and auditing. Chinese suppliers usually conduct multiple quality controls during the production process, and American buyers may also send third-party inspection agencies to conduct random inspections. For example, in textile production, strict inspections are carried out on indicators such as color fastness and shrinkage of fabrics.
Chinese sourcing agents are assisting with quality inspection
- Acceptance Criteria : Specific standards that specify the quality level and performance indicators that a product must meet to be accepted by U.S. buyers. In the procurement of electronic products, acceptance criteria may include detailed provisions on the product’s electrical performance, compatibility, and the allowable range of appearance defects.
2. Product-related terms
- Product Specification : A detailed description of the product’s performance, size, material, function, etc. When purchasing mechanical parts, American buyers will accurately specify the dimensional tolerance, material hardness and other specifications of the parts to ensure that the parts can be adapted to the American customer’s equipment.
- Brand : A logo used to identify the origin of a product and distinguish it from competitors. Some American buyers tend to purchase internationally renowned Chinese brand products, such as Xiaomi electronic products, to enhance their market competitiveness with the help of brand influence.
- Model : A specific version or type of a product. For example, in the case of auto parts, different models of engines are suitable for different car models, and U.S. buyers need to specify the specific model they need.
auto-parts-different-models
- SKU (Stock Keeping Unit) : A code used to uniquely identify a product. It contains product attribute information and facilitates inventory management and sales statistics. When selling Chinese products on US e-commerce platforms, SKUs are used to accurately manage the inventory of products of different styles, colors, and sizes.
- OEM (Original Equipment Manufacturer) : A Chinese company produces products according to the specifications of an American buyer and sells the products under the buyer’s brand. For example, a well-known American company commissioned a Chinese factory to produce its brand of products.
products-OEM-ODM
- ODM (Original Design Manufacturer) : Chinese companies not only produce, but also participate in product design and development. Products can use different brands according to the requirements of American buyers. For example, some Chinese consumer electronics manufacturers provide one-stop services from design to production for American customers.
- UPC (Universal Product Code) : A 12-digit barcode commonly used in the United States for identifying products in point-of-sale systems. Chinese imported food sold in U.S. supermarkets must be printed with a UPC code to facilitate scanning and inventory management.
- Barcode : A symbol consisting of a set of regularly arranged bars, spaces and their corresponding characters, which is convenient for machine reading and data collection. Various products exported from China to the United States usually have barcodes printed on the packaging to improve the efficiency of logistics and sales.
- QR Code : A matrix-type QR code symbol that can store more information. By scanning the QR code on Chinese products, American consumers can obtain product details, instructions for use, after-sales service, etc.
3. Price and Cost Terms
- EXW factory Price : The price of the product when it leaves the Chinese factory, excluding freight, insurance and other costs. When calculating the total cost, American buyers need to add subsequent transportation, insurance and other costs to this.
- FOB (Free on Board) : The Chinese seller completes the delivery obligation after loading the goods onto the vessel designated by the US buyer at the designated port of shipment, and the subsequent freight, insurance, etc. are borne by the buyer. For example, SourcingYuan loads the goods onto a vessel bound for Los Angeles, USA at Shanghai Port, completing FOB delivery.
SourcingYuan-Company-Export-Goods-Declaration-Shanghai-Port
- CIF (Cost, Insurance and Freight) : The price includes the cost of goods, insurance and freight. The Chinese seller is responsible for shipping the goods to the designated port of destination in the United States and bears the risk before the goods cross the ship’s rail. For some small American buyers, CIF prices are more convenient for them to calculate the total cost.
- CFR(Cost and Freight ) : The Chinese seller is responsible for shipping the goods to the designated port of destination in the United States and paying the freight, but is not responsible for insurance. The risk is transferred to the American buyer when the goods cross the ship’s rail at the port of shipment.
- Discount : Chinese suppliers give American buyers a price reduction based on the original price. If American buyers purchase a large number of Chinese lamps, suppliers may give a certain percentage of quantity discount.
- Surcharge : Additional fees incurred due to special circumstances or additional services. During the peak shipping season, cargo transportation from China to the United States may be subject to peak season surcharges, increasing procurement costs.
- Tariff : A tax imposed by the U.S. Customs on goods imported from China. Different goods have different tariff rates. For example, some Chinese furniture products may face higher tariffs, which will affect the purchase cost. For example, starting from January 1, 2025, the U.S. will increase the import tariff on solar silicon wafers and polysilicon produced in China from 25% to 50%, and impose a new tariff of 25% on tungsten products. In addition, according to previous statements by the United States, by 2025, the tariff rate on semiconductors will increase from 25% to 50%.
- VAT (Value-Added Tax) : When purchasing in China, some products may be subject to VAT. However, for goods exported to the United States, general trade products will be refunded in accordance with relevant policies to reduce the costs of Chinese suppliers.
4. Payment and Financial Terms
- Payment Terms : Common payment methods include cash payment, wire transfer, letter of credit, collection, etc. American buyers and Chinese suppliers need to negotiate and determine the appropriate payment method. For example, for a long-term cooperative and reputable supplier, American buyers choose to pay by wire transfer.
- T/T (Telegraphic Transfer) : The remitter deposits the money to the remitting bank, which instructs the destination branch or agent bank to pay a certain amount to the beneficiary via telegram or telex. It is fast and convenient for American buyers to pay Chinese suppliers via telegraphic transfer.
- L/C (Letter of Credit) : A written document issued by a bank to a Chinese seller based on the requirements and instructions of an American buyer, which conditionally promises to pay. In large-scale procurement projects, letters of credit can protect the rights and interests of both parties and reduce transaction risks.
- Collection : The exporter opens a bill of exchange and entrusts the bank to collect the payment. It is divided into documents against payment (D/P) and documents against acceptance (D/A). Under the D/P method, the US importer can only obtain the documents and pick up the goods after payment; under the D/A method, the importer can collect the documents after accepting the bill of exchange, which is relatively risky.
- Advance Payment : After signing the contract, the U.S. buyer pays the seller part of the payment in advance before the seller produces or ships the goods. In the purchase of some customized products, Chinese suppliers may require U.S. buyers to pay a certain percentage of advance payment to start production.
- Balance Payment : The remaining payment paid by the U.S. buyer to the Chinese seller after the goods are delivered, accepted, and other specific conditions are met.
- Exchange Rate : The exchange rate between the Chinese and American currencies. Exchange rate fluctuations will affect procurement costs. American buyers need to pay close attention to exchange rate changes and arrange procurement and payment time reasonably.
- L/G (Letter of Guarantee) : A written credit guarantee issued by a bank, insurance company or other financial institution to a Chinese beneficiary at the request of a U.S. applicant. For example, in the purchase of large equipment, U.S. buyers may provide a performance bond to ensure that obligations are fulfilled as agreed in the contract.
Table of content:
4. Payment and Financial Terms
5. Transport and Logistics Terminology
6. Warehousing and Inventory Terminology
7. Terminology of Trade Policies and Regulations
8. Quality and Certification Terminology
9. Packaging and Labeling Terminology
5. Transport and Logistics Terminology
- Freight Forwarder : An enterprise that accepts the entrustment of American customers and handles the transportation of goods from China and related business, and is responsible for booking, customs declaration, inspection, transportation arrangement, etc. For example, a small American company entrusts a freight forwarding company to handle the transportation of clothing purchased from China. The freight forwarder relies on professional knowledge and resources to ensure the smooth transportation of goods.
- Carrier : An individual or company that is responsible for the transportation of goods, including shipping companies, airlines, railway companies, etc. In the sea transportation from China to the United States, shipping companies such as Maersk are common carriers.
- Liner Shipping : A mode of transportation that follows a fixed schedule, route and port, and charges relatively fixed freight rates. It is suitable for goods with small batches and stable cargo flows, such as electronic product parts exported from China to the United States.
- Charter Shipping : According to the charter contract, the charterer rents the ship from the shipowner for cargo transportation. This is suitable for large-volume cargo transportation .
- Container : A large cargo container with a certain strength, rigidity and specifications for turnover. Standard container sizes include 20 feet and 40 feet, etc., which facilitate the transfer of goods between different means of transportation.
container-Size-20GP-40GP-40HQ
- FCL(Full Container Load ) : A container is filled with goods from one shipper and one consignee. Large American retailers often use full container loads when purchasing large quantities of goods from China.
- LCL (Less than Container Load) : Goods from multiple shippers are packed into one container. For small and medium-sized enterprises in the United States that purchase in small quantities, LCL can reduce transportation costs.
- B/L (Bill of Lading) : issued by the carrier or its agent, it proves that the specific goods have been received and promises to transport the goods to a specific destination and deliver them to the consignee. It is the certificate of ownership of the goods. American buyers pick up the goods with the bill of lading.
SourcingYuan-B_L-Bill-of-Lading-Sample
- Air Waybill : A shipping document issued by an airline or its agent to a shipper, proving that the goods have been received and will be delivered to the consignee at the destination, but not a document of ownership of the goods. It is suitable for the transportation of urgent or high-value goods.
- Ocean Bill of Lading : A bill of lading used for ocean transportation. It is one of the most important transportation documents in international trade, and records in detail the cargo transportation information, shipper and consignee, etc.
- Customs Declaration : The process by which the consignor or consignee of imported or exported goods, the person in charge of the inbound or outbound means of transport, etc., handle the entry and exit formalities of goods, articles or means of transport and related customs affairs with the customs. Chinese suppliers or their agents need to declare export goods information to the Chinese customs.
- Customs Clearance : During the import and export process, goods go through a series of procedures such as customs declaration, inspection, taxation, and release to complete the customs clearance process. U.S. importers need to ensure that the goods comply with U.S. customs regulations and clear customs smoothly.
- Customs Broker : A company that specializes in handling customs declarations for import and export companies and is familiar with customs regulations and business processes. U.S. importers can entrust a customs broker to handle complex customs declaration matters.
- Transshipment : The process of unloading goods from a ship or an airplane and then loading them onto another ship or airplane to continue on to their destination. For example, goods from China to the United States are transshipped at the transit port of Singapore.
- Combined Transport : Use two or more different modes of transport to transport goods from the place of departure to the destination. For example, combined transport involves first transporting goods from China to a US port by sea, and then transporting them to an inland destination by land.
- Door-to-Door : The transport service provider is responsible for picking up the goods from the door of the Chinese shipper and delivering them directly to the door of the US consignee, providing one-stop logistics services. It is suitable for US customers who have high requirements for logistics convenience.
- Port-to-Port : The transportation service is only responsible for transporting the goods from the Chinese port of shipment to the US port of destination. The shipper is responsible for transporting the goods to the port of shipment, and the consignee is responsible for picking up the goods at the port of destination and is responsible for subsequent transportation.
6. Warehousing and Inventory Terminology
- Warehouse : A place used to store and keep goods. When American buyers purchase goods from China, they may use temporary warehouses in China and storage warehouses in the United States. For example, Chinese suppliers have warehouses near ports to facilitate the collection and shipment of goods; American buyers have warehouses in the United States to store imported goods.
warehouse ecosystem
- Warehousing Fee : The fee required to store goods in a warehouse, calculated based on factors such as warehouse type, storage time, and quantity of goods. Long-term storage of goods will increase warehousing costs, and US buyers need to plan inventory turnover reasonably.
- Inventory : finished products or goods held by a company for sale. U.S. buyers need to manage inventory properly to avoid overstocking or shortages. For example, U.S. clothing retailers control inventory levels of clothing purchased from China based on sales forecasts and purchasing plans.
- Safety Stock : Additional inventory set aside to prevent stock-outs due to uncertainties. US electronics distributors will keep a certain amount of imported Chinese electronics as safety stock to cope with market demand fluctuations or shipping delays.
- Inventory turnover rate : The number of times inventory goods are turned over in a certain period of time, reflecting the level of inventory management and the efficiency of capital use. American buyers can improve inventory turnover rate and reduce inventory costs by optimizing procurement plans and sales strategies.
- Inventory Count : The process of counting the actual quantity of goods in the warehouse and comparing it with the inventory records. Regular inventory counts can ensure the accuracy of inventory data and detect inventory discrepancies in a timely manner.
- Warehouse Receipt : When goods enter the warehouse, the warehouse manager inspects, records and completes the warehousing procedures for the goods, and generates a receipt as a voucher.
- Warehouse Withdrawal : The process in which the warehouse manager takes the goods out of the warehouse and delivers them to the consignee based on the delivery note and other documents, while recording the inventory reduction.
Table of content:
4. Payment and Financial Terms
5. Transport and Logistics Terminology
6. Warehousing and Inventory Terminology
7. Terminology of Trade Policies and Regulations
8. Quality and Certification Terminology
9. Packaging and Labeling Terminology
7. Terminology of Trade Policies and Regulations
- Trade Agreement : The trade agreement signed between China and the United States will affect the tariffs, quotas and other policies for goods purchased from China to the United States. For example, during the Sino-US trade friction, the adjustment of the trade agreement between the two sides caused the tariffs of some commodities to fluctuate significantly.
- Free Trade Area : Although there is no direct free trade area between China and the United States, some free trade area policies involving China and other countries may indirectly affect the cost and process of American buyers purchasing from China.
- Customs Union : Its policies may affect the conditions for goods to enter the U.S. market. U.S. buyers need to pay attention to relevant developments and plan their procurement strategies reasonably.
- Anti-dumping : The United States takes measures to resist Chinese exporters from dumping goods into the U.S. market at prices below normal value, such as imposing anti-dumping duties. Chinese photovoltaic products have faced anti-dumping investigations in the United States, and some products have been subject to high anti-dumping duties, affecting the procurement costs and supply chain of U.S. buyers.
- Counter-vailing : The United States takes measures against the Chinese government’s subsidies for export products to offset the damage caused to American industries. Some Chinese steel products were once subject to countervailing investigations when they were exported to the United States.
- Rules of Origin : Regulations and standards that determine the country of origin of goods, used to determine whether the goods meet the preferential conditions in a specific trade agreement. When purchasing from China, American buyers need to ensure that the origin of the goods complies with relevant regulations in order to enjoy corresponding tariff preferences or avoid trade barriers.
- Import License : The United States stipulates that certain goods must be imported with a license in advance, otherwise they are not allowed to be imported. For example, the United States implements a licensing system for the import of some agricultural products and weapons, and purchasing related products from China requires an application in advance.
- Export Control : China restricts or prohibits the export of certain goods for political, military, economic and other purposes. U.S. buyers should understand China’s export control policies and avoid purchasing restricted goods.
8. Quality and Certification Terminology
- ISO standards (International Organization for Standardization Standards) : such as ISO 9001 quality management system standards, ISO 14001 environmental management system standards, etc. Chinese companies that have passed ISO certification have a certain degree of guarantee for their product quality and management level. American buyers tend to choose suppliers that have passed ISO certification to reduce procurement risks.
quality contorl ISO9001 certification of Factory
- CE certification (Conformité Européene) : Mainly aimed at the EU market, but some Chinese products obtaining CE certification can indirectly reflect their quality level and increase the confidence of American buyers.
CE-certification-Sample
- UL certification (Underwriters Laboratories) : The safety certification mark issued by the American Underwriters Laboratories for electromechanical products, including household electrical appliances, is one of the important certifications for entering the US market. Electrical products such as lamps and sockets produced in China are usually required to obtain UL certification when exported to the United States. For example, a Chinese lamp manufacturer designs and tests its products according to UL standards in order to enter the US market. After obtaining certification, its products are more competitive in the US market.
BST306238783070511SR-Juicer-UL60335-report
- FCC certification (Federal Communications Commission) : The Federal Communications Commission of the United States certifies electronic products involving radio frequency, electromagnetic compatibility, etc. Wireless electronic products such as mobile phones and wireless routers produced in China must pass FCC certification before they are exported to the United States. A Chinese mobile phone manufacturer designed its products in accordance with FCC requirements during the product development stage to ensure that its products can pass certification smoothly and enter the US market for sale.
- RoHS certification (Restriction of Hazardous Substances) : EU directive restricting the use of certain hazardous substances in electrical and electronic equipment. Although this certification is mainly aimed at the EU market, many US buyers will also require Chinese suppliers to provide products that meet RoHS standards to ensure the environmental protection and safety of the products. For example, in order to meet consumers’ demand for environmentally friendly products and its own corporate social responsibility requirements, an electronics retailer in the United States requires suppliers to provide relevant certificates of product compliance with RoHS certification when purchasing computer accessories produced in China to ensure that the content of harmful substances such as lead, mercury, and cadmium in the products is within the specified range.
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- Quality System Audit : A comprehensive inspection and evaluation of the company’s quality management system to determine whether it complies with relevant standards and regulatory requirements. Through quality system audits, Chinese companies can find weak links in quality management and improve them, while also allowing American buyers to have a deeper understanding of suppliers’ quality management capabilities. For example, American buyers commissioned a professional third-party organization to conduct a quality system audit of a toy manufacturer in China, evaluating all aspects from raw material procurement, production process control to finished product inspection to ensure that the company can stably produce toy products that meet American safety standards.
- Product Certification : A series of procedures such as strict inspection and testing of products through third-party certification agencies to prove that products comply with specific standards or technical specifications. Obtaining product certification can significantly improve the competitiveness and credibility of a product in the market. For example, a Chinese fitness equipment manufacturer has obtained relevant product certifications from the United States to prove that its products meet the requirements of the USA market in terms of safety and performance, making it easier to win the favor of American buyers and open up the USA market.
- Conformity Assessment : This is a broad concept that refers to activities that directly or indirectly determine whether relevant requirements are met, including sampling, testing and inspection, evaluation, verification and conformity assurance, registration, recognition and approval, and their combination. In Sino-US trade, conformity assessment plays a key role in ensuring that products exported from China to the United States comply with US regulations and standards. For example, the United States has strict regulations on imported food contact materials. Relevant Chinese companies need to go through a series of conformity assessment procedures such as testing and evaluation to ensure that their products meet the requirements of the US Food and Drug Administration (FDA) before they can successfully enter the US market.
9. Packaging and Labeling Terminology
- Packaging : The general name for containers, materials, and auxiliary materials used in accordance with certain technical methods to protect products, facilitate storage and transportation, and promote sales during the circulation process. It also refers to the operational activities of applying certain technical methods in the process of using containers, materials, and auxiliary materials to achieve the above purposes. When transporting goods from China to the United States, the packaging needs to take into account factors such as the bumps of long-distance transportation, different climatic conditions, and the preferences of American consumers. For example, fragile ceramic products need to be packaged in a sturdy outer packaging with sufficient cushioning materials; while the packaging of some high-end consumer products will focus on design to attract American consumers.
- Inner Packaging : Packaging that comes into direct contact with the product, which protects the product and facilitates sales. For example, the inner packaging of electronic products usually uses plastic pallets, sponges and other materials to fix the product to prevent it from shaking and being damaged during transportation, and also to facilitate consumers to take the product after opening the package.
- Outer Packaging : Packaging used to protect inner packaging and products and facilitate transportation, storage, and loading and unloading. For goods shipped from China to the United States, the outer packaging is generally made of cartons, wooden boxes, etc. For example, large mechanical equipment may be packaged in wooden boxes to ensure that it can withstand certain pressure and collisions during sea and land transportation.
- Shipping Packaging : Packaging that is mainly used for transportation and storage, and has the functions of ensuring product safety and facilitating loading and unloading. This type of packaging must fully consider various factors that may be encountered during transportation, such as temperature changes, humidity effects, loading and unloading operations, etc. For example, chemical products exported to the United States need to have good sealing and corrosion resistance in their transportation packaging to prevent product leakage and deterioration.
- Sales Packaging : Packaging that is mainly intended to promote sales, focuses on product display and consumer convenience, and usually has exquisite designs and product information labels. When some Chinese specialty foods are sold to the United States, their sales packaging will use bright colors and unique pattern designs, and at the same time label the product name, ingredients, and cooking methods in English to attract American consumers to buy.
- Packaging Materials : Materials used to make packaging containers and form product packaging. Common materials include paper, plastic, glass, metal, etc. Different products will choose appropriate packaging materials according to their own characteristics. For example, beverage products may be packaged in glass bottles or metal cans; while textiles are mostly packaged in paper packaging or plastic bags.
- Shipping Mark : Shipping mark on the packaging of goods, generally composed of simple geometric shapes, letters, numbers and words, including the consignee code, destination port, piece number and other information, to facilitate the identification and transportation of goods. When American buyers receive goods from China, they can quickly and accurately find their goods through the shipping mark and understand the basic transportation information of the goods. For example, “USA – LA – 001” is marked on the shipping mark, indicating that the destination port of this batch of goods is Los Angeles, USA, and the piece number is 001.
- Warning Label : For products that are dangerous and require special attention, the labels on the packaging remind users to pay attention, such as flammable, explosive, toxic, etc. For some products containing dangerous chemicals, such as detergents and paints, Chinese suppliers must follow the relevant laws and regulations of the United States and clearly mark warning labels on the packaging to ensure the safety of users.
- Product Label : The words, graphics, symbols and all instructions attached to the product or packaging, including product name, specifications, ingredients, usage, production date, shelf life and other information, to meet consumers’ right to know and regulatory requirements. In the US market, the labels of food, medicine and other products are strictly regulated. For example, when food produced in China is exported to the United States, all ingredients must be accurately marked on the label, and the nutrition facts table, consumption method, shelf life and other information must be clearly marked in English, otherwise there may be a risk of product recall.
Table of content:
4. Payment and Financial Terms
5. Transport and Logistics Terminology
6. Warehousing and Inventory Terminology
7. Terminology of Trade Policies and Regulations
8. Quality and Certification Terminology
9. Packaging and Labeling Terminology
10. Other Common Terms
- Force Majeure : After the contract is signed, if the party to the contract cannot perform or cannot perform the contract as scheduled due to an event that is unforeseeable, unpreventable, unavoidable and uncontrollable by the party to the contract, not due to the fault or negligence of the party to the contract, the party to the contract that has force majeure may be partially or fully exempted from liability. For example, in 2020, the outbreak of the new coronavirus epidemic caused many Chinese factories to stagnate production due to epidemic prevention and control measures, and they were unable to deliver goods to American buyers on time. This situation can be regarded as force majeure, and the two parties can negotiate to adjust the delivery time or other contract terms.
- Intellectual Property : The exclusive rights that people enjoy according to law for the results of their intellectual labor, including trademark rights, patent rights, copyrights, etc. In the process of purchasing from China, American buyers should be careful to avoid infringement of intellectual property rights. For example, when an American clothing company purchases clothing produced in China, it must ensure that the style and pattern of the clothing do not infringe on the intellectual property rights of any third party, otherwise it may face legal disputes.
- Trade Secret : Commercial information involving technology, operations, etc. that is not known to the public, has commercial value, and has been kept confidential by the right holder. The purchasing parties may be involved in the protection of trade secrets during the cooperation process. For example, the drawings provided by the US buyer are trade secrets and need to be kept confidential by the Chinese supplier; the production process, cost accounting and other information of the Chinese supplier may also be trade secrets. The US buyer is obliged to abide by the confidentiality agreement and shall not disclose this information to competitors.
- Agency Agreement : An agreement signed between the principal and the agent that clarifies the rights and obligations of both parties. The agent, based on the principal’s authorization, conducts business activities with third parties on behalf of the principal. American buyers may entrust agents in China, such as SourcingYuan, to find suitable manufacturers or suppliers and negotiate procurement contracts , negotiate prices , etc. In this case, the agency agreement must clearly define the agent’s authority, commission calculation method, confidentiality clauses, etc., to protect the rights and interests of both parties.
