A tariff is a tax imposed by the government on goods imported into the country. Tariffs serve two primary purposes: generating revenue for the government and protecting domestic industries from foreign competition. In the United States, tariffs are assessed by CBP at the time of importation based on the product's HTS classification, customs value, and country of origin. The tariff rate can be calculated as a percentage of value (ad valorem), a fixed dollar amount per unit (specific), or a combination of both (compound).

Why It Matters for Importers

Tariffs are typically the largest government-imposed cost in your import supply chain. On a $100,000 shipment with a 10% tariff rate, you owe $10,000 in duties before your goods can be released. On the same shipment with a 25% rate, you owe $25,000. The tariff rate is determined entirely by the HTS classification assigned to your product, making accurate classification the most consequential decision in the import process.

Beyond the base tariff rate, imports may be subject to additional tariffs under specific trade actions — Section 301 tariffs on Chinese goods, Section 232 tariffs on steel and aluminum, antidumping duties, and countervailing duties. These additional tariffs stack on top of the base rate, sometimes doubling or tripling the effective tariff.

Types of Tariffs

Reducing Your Tariff Burden

Legal strategies for reducing tariffs include claiming preferential rates under free trade agreements, utilizing Foreign Trade Zones, applying for duty drawback on re-exported goods, reviewing HTS classification for accuracy, and engaging in tariff engineering. Each strategy requires proper documentation and compliance procedures to withstand CBP review.

For a detailed explanation of how tariffs differ from taxes and other import charges, see our guide on tariff vs. tax vs. duty.