Understand every layer of US import duties and tariffs — from standard MFN rates and how they are determined, to Section 301 tariffs on China, Section 232 steel and aluminum duties, anti-dumping orders, free trade agreement benefits, and proven strategies for reducing your total landed cost.
When goods enter the United States, the importer of record is responsible for paying import duties — taxes levied by the federal government on imported merchandise. These duties serve two purposes: generating revenue for the US Treasury and protecting domestic industries from foreign competition. In fiscal year 2025, the US collected over $100 billion in customs duties, making them one of the largest sources of non-income-tax federal revenue.
The duty rate that applies to any given product is determined by its Harmonized Tariff Schedule (HTS) classification and the country of origin. The HTSUS, maintained by the US International Trade Commission (USITC), contains thousands of 8-digit rate lines, each with a corresponding duty rate. The classification process — assigning the correct HTS code — is therefore the single most important step in determining your duty obligation.
US import duties operate on a multi-layered system. The base layer is the Column 1 General duty rate, which applies to imports from most countries under the World Trade Organization's Most Favored Nation (MFN) principle. On top of this base rate, additional duties may apply from special trade actions (Section 301, Section 232), anti-dumping and countervailing duty orders (AD/CVD), or other trade remedy measures. Conversely, duties may be reduced or eliminated through free trade agreements (USMCA, various bilateral FTAs) or preferential programs (GSP).
Column 1 General rates apply to nearly all US trading partners (MFN/Normal Trade Relations). Column 2 rates — which are dramatically higher, often 40-100% — apply only to a handful of countries without Normal Trade Relations status (currently Cuba and North Korea). If you are importing from any major trading partner, Column 1 rates apply.
Understanding this layered system is essential because the effective duty rate on your product may be very different from the rate listed in Column 1 General. A product with a 3% MFN duty rate might face an additional 25% under Section 301, a 25% under Section 232, or a 200%+ anti-dumping duty — transforming a low-duty import into a cost-prohibitive one. Conversely, the same product imported from a USMCA partner country might qualify for a 0% preferential rate. TariffPro calculates all applicable duty layers for any HTS code and country of origin combination, so you always know the true cost before you ship.
US import duties come in three basic forms, and understanding the differences is critical for accurately calculating your import costs. The type of duty determines whether your obligation scales with the value of the goods, the quantity, or both.
Ad valorem duties are assessed as a percentage of the transaction value (the price actually paid or payable for the merchandise). This is the most common type of duty in the HTSUS. For example, an ad valorem duty rate of 5% on a shipment valued at $100,000 results in a duty of $5,000. The transaction value is determined under the customs valuation rules established by the WTO Valuation Agreement, codified in 19 USC 1401a. It includes the price of the goods plus certain additions such as packing costs, selling commissions, and assists (materials provided by the buyer to the seller), but excludes international freight and insurance costs (the US uses FOB valuation, not CIF).
Unlike many countries that assess duties on the CIF (Cost, Insurance, and Freight) value, the US assesses ad valorem duties on the FOB (Free On Board) value — the transaction value at the point of export. This means international shipping costs and marine insurance are not included in the dutiable value. This can represent a meaningful savings compared to CIF-based countries, especially for bulky or heavy goods with high freight costs.
Specific duties are a fixed amount per unit of quantity — per kilogram, per liter, per piece, per square meter, or per dozen. For example, a specific duty of $0.15 per kilogram means a 10,000 kg shipment owes $1,500 regardless of the shipment's declared value. Specific duties are common for agricultural products, beverages, textiles, and commodities. They provide a floor level of protection regardless of price fluctuations — a cheap import pays the same per-unit duty as an expensive one, which means specific duties can be particularly burdensome for low-value goods.
Compound duties combine an ad valorem component with a specific component. For example, a compound duty might be stated as '10% ad valorem plus $0.50 per kilogram.' Both components are assessed and added together. Compound duties are common in the textile and apparel chapters (Chapters 50-63) and for certain food products. Some compound duty rates also include a 'but not less than' or 'but not more than' clause, which sets a floor or ceiling on the total duty.
For example, HTS subheading 2204.21.50 (certain wines) has a rate of '6.3 cents per liter.' This is a pure specific duty. HTS subheading 6110.20.20 (cotton sweaters) has a compound rate. The complexity of these rate structures means that accurately calculating duties requires knowing not only the HTS classification and value, but also the quantity, weight, and unit of measure — information that must be reported accurately on the customs entry.
Beyond the three standard duty types, importers may encounter additional duties that are layered on top. These include Section 301 tariffs (trade-action duties on specific countries), Section 232 tariffs (national security duties), anti-dumping duties (AD), countervailing duties (CVD), and safeguard duties under Section 201. These additional duties are typically assessed as ad valorem rates added to the Column 1 General rate, and they can multiply the effective duty rate several times over.
The duty rate that applies to your import depends on three factors: the HTS classification of the product, the country of origin, and whether any special tariff programs or trade remedies apply. Understanding how each factor influences the rate is key to managing your import costs proactively rather than reactively.
Every 8-digit HTS rate line has a corresponding Column 1 General duty rate. This rate is the result of decades of trade negotiations under the GATT and WTO, and it reflects both the sensitivity of the domestic industry and the concessions made in multilateral trade rounds. Rates range from 0% (many raw materials, some high-tech goods under the Information Technology Agreement) to over 100% (certain dairy products, tobacco). The classification process determines which rate line applies. For a deep dive on classification, see our HTS classification guide.
The country where the goods are manufactured or substantially transformed determines which duty column applies. For most countries, the Column 1 General (MFN) rate applies. However, preferential programs like USMCA (for Mexico and Canada), CAFTA-DR (for Central America and the Dominican Republic), and bilateral FTAs (with countries like South Korea, Australia, Colombia, and others) offer reduced or zero rates for qualifying goods. The Special column in the HTSUS lists the preferential rates and their qualifying SPI codes.
Country of origin also determines exposure to additional tariffs. Goods originating in China face Section 301 tariffs of 7.5% to 100% depending on the product category. Goods of steel or aluminum — regardless of origin (with some exceptions) — face Section 232 tariffs of 25%. Anti-dumping and countervailing duty orders are country-specific, targeting specific products from specific countries where unfair trade practices have been found.
For ad valorem duties, the dutiable value is typically the transaction value — the price actually paid or payable for the goods when sold for export to the US. Under 19 USC 1401a, the transaction value is adjusted by adding certain costs (packing, selling commissions, assists, royalties, and license fees) and excluding others (post-importation charges, international freight under the FOB methodology). If the transaction value cannot be used (for example, in related-party transactions where the relationship influenced the price), CBP applies alternative valuation methods in a prescribed order: transaction value of identical goods, transaction value of similar goods, deductive value, and computed value.
If you are importing from a related company (parent, subsidiary, affiliate), CBP may scrutinize the transaction value to ensure it is at arm's length. Maintaining a transfer pricing study and demonstrating that the declared value meets the circumstances of sale test is essential to avoid valuation adjustments that could increase your duty bill.
Getting all three factors right — classification, country of origin, and valuation — is what determines whether you are paying the correct duties. An error in any one of these areas can result in underpayment (triggering penalties) or overpayment (leaving money on the table). TariffPro helps you nail down the classification component, which is the foundation for everything else.
Section 301 of the Trade Act of 1974 authorizes the President to take retaliatory action against foreign trade practices that are deemed unjustifiable or discriminatory. Beginning in 2018, the United States imposed a series of tariffs on imports from China under Section 301, targeting what the US Trade Representative (USTR) identified as unfair trade practices related to intellectual property theft, forced technology transfer, and industrial subsidies. These tariffs remain in effect in 2026 and have been expanded significantly.
In May 2024 and subsequent rounds through 2025, the Biden administration announced targeted increases on strategic sectors. Electric vehicles from China now face a 100% Section 301 tariff. Semiconductor tariffs doubled to 50%. Solar cells increased to 50%. Steel and aluminum from China face 25% Section 301 on top of 25% Section 232 — a combined 50% tariff rate before even considering the MFN duty rate. Lithium-ion batteries face 25%, ship-to-shore cranes face 25%, and medical products including syringes, needles, and PPE face tariffs of 25-50%.
Section 301 tariffs apply to specific HTS subheadings, not to all Chinese imports. Whether your product is covered depends entirely on its HTS classification. TariffPro automatically flags Section 301 exposure for any classification with a China country of origin, showing the exact additional duty rate and the applicable list.
Section 301 tariffs are assessed in addition to the Column 1 General (MFN) duty rate. They are reported on the customs entry using Chapter 99 HTS subheadings. For example, a product with an MFN rate of 3.5% on List 3 would owe 3.5% + 25% = 28.5% ad valorem. The Section 301 duty is calculated on the same FOB transaction value as the underlying duty. Importers must report both the underlying 8-digit HTS code and the applicable Chapter 99 Section 301 subheading on their entry summary (CBP Form 7501).
USTR periodically publishes the Federal Register notices that define which HTS subheadings are covered by each list. These lists are maintained in HTSUS Subchapter III of Chapter 99. Importers should verify coverage using the official HTSUS on the USITC website or through TariffPro, which maintains an always-current mapping of Section 301 coverage by HTS code.
Section 232 of the Trade Expansion Act of 1962 authorizes the President to impose tariffs or quotas on imports that threaten national security. In March 2018, the President imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports under Section 232, covering virtually all steel and aluminum products entering the US regardless of country of origin. In March 2025, the tariff on aluminum was raised from 10% to 25%, equalizing the rate with steel.
Section 232 steel tariffs cover products classified under a wide range of HTS headings in Chapter 72 (iron and steel) and Chapter 73 (articles of iron or steel), as well as certain steel products in other chapters. This includes flat-rolled products (coils, sheets, plates), long products (bars, rods, angles, shapes), pipe and tube, stainless steel, alloy steel, and many downstream steel articles. Aluminum tariffs cover products in Chapter 76 (aluminum and articles thereof) and aluminum products in other chapters. The coverage was expanded in 2025 to include additional derivative products.
Several countries previously negotiated tariff rate quotas (TRQs) or exemptions from Section 232 tariffs. However, the landscape has shifted significantly. As of early 2025, the US terminated TRQ agreements with the EU, UK, and Japan, reimposing the full 25% tariff. Australia maintains an exemption for steel. Canada and Mexico had been exempt under USMCA-related negotiations but face ongoing uncertainty. Importers should verify the current status of country-specific exceptions, as the policy landscape is fluid.
For steel and aluminum products from China, both Section 232 and Section 301 tariffs apply simultaneously. A Chinese steel product with a 0% MFN rate would face 0% + 25% (Section 232) + 25% (Section 301) = 50% duty. This stacking makes China-origin steel and aluminum among the most heavily tariffed products entering the US.
The Bureau of Industry and Security (BIS) at the Department of Commerce administers a product exclusion process for Section 232 tariffs. Importers can request exclusions for specific products that are not produced in sufficient quantity or quality in the United States. Exclusion requests must specify the product by HTS code, physical dimensions, chemical composition, and end use. Approved exclusions are published in the Federal Register and are retroactive to the date of filing. The exclusion process has been criticized for lengthy processing times — averaging 6-12 months — but can provide significant savings for qualifying products.
Section 232 tariffs are reported on customs entries using Chapter 99 subheadings (9903.80.01 for steel, 9903.85.01 for aluminum), similar to the Section 301 reporting mechanism. The tariff is assessed on the full FOB transaction value of the merchandise. TariffPro identifies Section 232 exposure for all steel and aluminum classifications and tracks the current status of country-specific exemptions and exclusions.
Anti-dumping duties (AD) and countervailing duties (CVD) are trade remedy measures that target specific unfair trade practices. Dumping occurs when a foreign manufacturer sells goods in the US at less than fair value — below the price charged in its home market or below the cost of production. Subsidization occurs when a foreign government provides financial assistance to its manufacturers, giving them an unfair competitive advantage. AD and CVD orders are product-specific and country-specific, and the duty rates can be extraordinarily high — in some cases exceeding 200% or even 400%.
AD/CVD investigations are initiated by the Department of Commerce (DOC) and the International Trade Commission (ITC) when a US domestic industry files a petition alleging injury from dumped or subsidized imports. Commerce determines the margin of dumping or the subsidy rate, while the ITC determines whether the domestic industry has been materially injured. If both findings are affirmative, an AD/CVD order is issued, and duties at the calculated rate are assessed on all future imports of the covered product from the subject country.
One of the most dangerous aspects of AD/CVD for importers is the retrospective assessment system. When goods subject to an AD/CVD order are imported, the importer pays an estimated deposit rate based on the most recent administrative review. However, the final duty rate is not determined until Commerce completes the annual administrative review — often 1-2 years after the goods were imported. If the final rate is higher than the deposit, the importer owes the difference plus interest. This means importers face long-term financial exposure that is difficult to predict.
The Enforce and Protect Act (EAPA) gives CBP enhanced tools to investigate AD/CVD evasion — including transshipment through third countries and minor processing designed to change the country of origin. Penalties for evasion are severe, including retroactive assessment of full AD/CVD duties plus interest and potential fraud penalties. If a product is moving through a third country before being shipped to the US, ensure the substantial transformation test is genuinely met.
Before sourcing from any country, check the current AD/CVD orders in Commerce's AD/CVD Case and Reimbursement Offset database. TariffPro flags products with active AD/CVD orders by HTS classification and country of origin, helping importers identify exposure before committing to a supplier or trade lane.
Free trade agreements (FTAs) and preferential tariff programs are the most powerful tools available to importers for reducing or eliminating duties. The US currently has 14 FTAs in force with 20 countries, plus unilateral preference programs that cover over 100 additional countries. Understanding which programs apply to your products — and meeting their requirements — can dramatically reduce your total landed cost.
USMCA is by far the most significant FTA for US importers, given that Canada and Mexico are the two largest US trading partners. Under USMCA, most goods originating in Mexico or Canada can enter the US duty-free or at reduced rates. However, claiming USMCA benefits requires meeting product-specific rules of origin that can be complex. These rules vary by HTS chapter and can include tariff shift requirements (the product must undergo a change in tariff classification during production), regional value content thresholds (a minimum percentage of the product's value must originate in the USMCA region), and specific processing requirements.
For automotive products, USMCA's rules of origin are particularly demanding: 75% regional value content for passenger vehicles, 70% for core automotive parts, and specific requirements for steel and aluminum purchasing. For textiles, a yarn-forward rule generally requires that the yarn used to make the fabric must originate in the USMCA region. For a detailed guide to USMCA origin claims, see our USMCA Certificate of Origin guide.
The GSP provides duty-free entry for approximately 3,500 products from over 100 designated beneficiary developing countries. GSP-eligible products are marked with an 'A' or 'A*' Special Program Indicator in Column 1 of the HTSUS. To qualify, the product must be imported directly from a beneficiary country, and at least 35% of the appraised value must be attributable to the cost or value of materials produced in the beneficiary country plus the direct processing costs performed there. GSP has historically been subject to periodic expiration and congressional reauthorization — always verify current status.
Whether a product is eligible for FTA preferential rates depends on its HTS classification. Some subheadings may qualify for preferential treatment under USMCA but not under KORUS, and vice versa. TariffPro automatically identifies which preferential programs a classified product qualifies for, based on the HTS code and country of origin, and flags the specific rules of origin requirements.
To claim FTA benefits, the importer must possess a valid certification of origin (the format varies by agreement), ensure the goods meet the applicable rule of origin, and retain supporting documentation for the required period (typically five years). Falsely claiming FTA benefits exposes importers to penalties under 19 USC 1592 and potential exclusion from the program.
Total landed cost is the true, all-in cost of getting imported goods from the foreign supplier's dock to your warehouse in the United States. It includes far more than just the purchase price and duty — and failing to account for all cost components leads to inaccurate margin calculations, poor sourcing decisions, and unpleasant surprises at the port. For importers, mastering landed cost calculation is a competitive advantage.
Consider a shipment of consumer electronics from China valued at $100,000 FOB. The HTS classification carries a Column 1 General rate of 3.9%, and the product is on Section 301 List 3 at 25%. Here is the landed cost breakdown: Product cost $100,000. Ocean freight $4,500. Insurance $350. Customs duty at 3.9% on $100,000 = $3,900. Section 301 tariff at 25% on $100,000 = $25,000. MPF at 0.3464% = $346.40 (capped at $614.35). HMF at 0.125% = $125. Broker fee $300. Drayage $800. Total landed cost: approximately $135,321 — a 35.3% premium over the FOB product cost. Without Section 301, the premium would be only 10.3%.
Too many importers discover the full scope of duties after the goods are already on the water. TariffPro provides instant duty rate calculations including all tariff layers — MFN rate, Section 301, Section 232, and AD/CVD — so you can calculate true landed cost before committing to a purchase order.
The landed cost calculation also informs strategic decisions about supplier selection and sourcing strategy. When you compare a Chinese supplier at $100,000 FOB with 28.9% effective duty to a Vietnamese supplier at $108,000 FOB with 3.9% effective duty, the Vietnamese option may deliver a lower landed cost despite a higher product price. These comparisons can only be made accurately when all duty layers are accounted for — which is why having an always-current duty database through a tool like TariffPro is essential for procurement teams.
Paying more in duties than legally required is one of the most common — and most preventable — cost leaks in international trade. There are numerous legitimate strategies for reducing duty exposure, ranging from simple classification optimization to complex supply chain restructuring. The key is understanding which strategies apply to your specific situation and implementing them correctly.
The simplest duty reduction strategy is ensuring your goods are classified correctly. Many importers overpay duties because their products are classified under a higher-rate subheading when a lower-rate subheading is equally or more appropriate. This is not about misclassification — it is about rigorous analysis of product characteristics to ensure the most accurate (and often lowest legitimate) rate applies. For example, a product classified as 'other' at the end of a tariff heading often carries a higher rate than a specifically enumerated subheading. If the product genuinely meets the terms of the more specific subheading, reclassification is entirely proper.
Tariff engineering involves modifying the design, material composition, or import configuration of a product to legitimately qualify for a lower duty rate. This is a well-established and legal practice recognized by CBP and the courts. Examples include changing a product's material composition to fall under a lower-rated subheading, importing a product in a slightly different form (unassembled vs. assembled), or modifying packaging to change the classification. For a detailed guide, see our article on tariff engineering strategies.
When goods pass through a middleman or trading company before reaching the US, the importer may be able to declare the 'first sale' price (the price from the manufacturer to the middleman) as the transaction value, rather than the higher 'last sale' price (the price from the middleman to the US importer). This can reduce the dutiable value by 15-30%, with proportional duty savings. First sale valuation requires documenting that the first sale was a bona fide arm's-length transaction and that the goods were clearly destined for the US at the time of the first sale. See our first sale valuation guide for implementation details.
FTZs allow importers to defer, reduce, or eliminate duties by storing, processing, or manufacturing goods in a designated zone before entering them into US commerce. Key benefits include duty deferral (duties are not paid until goods leave the zone), inverted tariff savings (if manufacturing changes the classification to a lower-duty product), and elimination of duties on waste and scrap. Our FTZ guide covers the activation and compliance requirements.
Goods imported for temporary purposes — exhibition, testing, repair, or processing — can enter duty-free under a Temporary Import Bond (TIB) under HTSUS Chapter 98. The goods must be exported or destroyed within one year (with possible extensions up to three years). TIBs are commonly used for trade show displays, equipment being tested or repaired, and samples that will be returned to the foreign supplier.
Duty drawback allows importers to recover up to 99% of duties paid on imported goods that are subsequently exported, either in the same condition or after being manufactured into a different product. Under the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), drawback was modernized and expanded. There are two main types: direct identification drawback (same goods imported and exported) and substitution drawback (commercially interchangeable goods). Drawback claims must be filed within five years of importation.
TariffPro identifies duty reduction opportunities for every classification — including FTA eligibility, tariff engineering options, and Section 301 exclusion availability. Start optimizing your duty costs with a free account.
Managing US import duties in 2026 is more complex than ever. With MFN rates, Section 301 tariffs, Section 232 tariffs, AD/CVD orders, and multiple FTA programs all interacting simultaneously, the margin for error is razor-thin and the potential savings are enormous. TariffPro by Camtom was built specifically to help US importers navigate this complexity — turning the duty calculation from a compliance burden into a strategic advantage.
TariffPro does not just give you the MFN rate. For every HTS classification, it calculates the complete duty stack — MFN rate plus Section 301 exposure (with the specific list and rate), Section 232 exposure, active AD/CVD orders (with deposit rates by manufacturer), and applicable FTA preferential rates. You see the full picture instantly, for any country of origin, enabling accurate landed cost calculations before you commit to a purchase order.
When TariffPro identifies that a classification carries significant additional duties, it automatically surfaces optimization opportunities: alternative classifications that may carry lower rates (where legitimately applicable), FTA eligibility that the importer may not have claimed, tariff engineering modifications that could shift the product to a lower-rate subheading, and active Section 301 exclusions that apply to the specific HTS code.
For procurement teams evaluating suppliers across multiple countries, TariffPro provides side-by-side duty comparisons by country of origin. Instantly see how the total duty stack differs between a Chinese supplier, a Vietnamese supplier, and a Mexican supplier for the same product — enabling data-driven sourcing decisions that account for the full landed cost, not just the FOB price.
Create a free TariffPro account and classify your first 10 products — no credit card required. See the full duty stack for any product from any country, identify savings opportunities, and start making data-driven import decisions. Sign up free at camtomx.com/registro.
Import duties are one of the largest controllable costs in your supply chain. The difference between an optimized duty strategy and a passive one can easily amount to six or seven figures annually for mid-size importers. TariffPro gives you the visibility, accuracy, and speed you need to turn duties from an uncontrolled cost center into a managed, optimized component of your total landed cost.
Camtom Team
Editorial Team
Share this guide
Discover why more than 100 agencies already operate with us.
