Question 1

How are import duties calculated on goods?

Accepted Answer

Import duties are calculated as a percentage of the CIF value (Cost + Insurance + Freight). The duty rate depends on the product's HS code (Harmonized System code) and the destination country. For example, apparel imported into the US typically has a 12% duty rate, while electronics are often 0%. The CIF value includes the product price, shipping cost, and insurance — not just the product price alone.

Question 2

What is the difference between duties, tariffs, and taxes?

Accepted Answer

Duties are taxes on imported goods based on the HS code — they're product-specific. Tariffs are additional duties imposed for trade policy reasons (e.g., Section 301 tariffs on Chinese goods, anti-dumping duties). VAT/GST is a consumption tax charged on the value of goods plus any duties. All three stack: you pay base duty + additional tariffs + VAT/GST calculated on the total.

Question 3

What is an FTA and how does it reduce duties?

Accepted Answer

A Free Trade Agreement (FTA) reduces or eliminates duties between participating countries. For example, USMCA eliminates most duties between the US, Canada, and Mexico. To qualify, products must meet 'rules of origin' — typically a percentage of the product's value must originate in FTA countries. FTA savings can be substantial: a 12% duty on $30 goods = $3.60/unit. At 500 units/month, that's $21,600/year in savings.

Question 4

What are Section 301 tariffs?

Accepted Answer

Section 301 tariffs are additional US tariffs on Chinese goods, ranging from 7.5% to 25% on top of regular duties. They apply to specific product categories identified by HS code. These tariffs can dramatically increase landed costs — a product with 12% base duty + 25% Section 301 tariff pays 37% total. Strategies: source from non-China countries, apply for exclusions, or use Foreign Trade Zones (FTZs).

Question 5

How do I find the HS code for my product?

Accepted Answer

Use the USITC Harmonized Tariff Schedule (hts.usitc.gov) for US imports. For other countries, use the World Customs Organization HS database. HS codes are 6 digits internationally, with additional digits varying by country. Common codes: 6204 (women's clothing), 8471 (computers), 6403 (footwear with leather uppers). Getting the right HS code is critical — the wrong code can mean paying too much or too little duty, both of which create problems.

Duty & Tariff Estimator

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