A customs duty is a federal tax charged on goods imported into the United States, and the amount owed is calculated by identifying the product’s tariff classification, applying the duty rate assigned to that classification against the value of the goods, and adding any extra tariffs tied to where the goods were made. The importer of record pays, not the foreign seller.1Office of the Law Revision Counsel. 19 U.S. Code 1484 – Entry of Merchandise In 2026, the calculation is more involved than it used to be, because broad new tariffs now sit on top of the standard rates for most imports.
Who Legally Owes the Duty
Federal regulations put the duty on the importer of record, defined as the person primarily liable for payment — typically the consignee, the owner of the merchandise, or a licensed customs broker acting on their behalf.2eCFR. 19 CFR 101.1 – Definitions The foreign manufacturer or exporter does not write a check to U.S. Customs and Border Protection. Payment comes from the American side of the transaction.
Economically, the cost rarely stops with the importer. Research on the tariffs imposed since 2018 found that nearly all of the tariff amount passed through to import prices, with foreign sellers holding their prices steady. Importers then raised retail prices, lifting shelf prices on imported goods by roughly 7 percentage points on average through early 2026. Domestic producers often raised their prices in step. In practice, consumers absorb most of the cost through what they pay at the register.
The Forms a Customs Duty Can Take
The most common form is an ad valorem duty, calculated as a percentage of the imported product’s value. A $1,000 item carrying a 10% ad valorem rate owes $100. A specific duty charges a flat amount per unit of quantity — per kilogram, per liter, per item — regardless of the goods’ value. A compound duty combines both: a percentage of value plus a fixed charge per unit.3World Bank. Forms of Import Tariffs – WITS
Two specialized duties target unfair trade practices and apply only after an injury finding. Anti-dumping duties apply when a foreign producer sells goods in the United States below its home-market price or below production cost; the duty is sized to close that gap.4U.S. Customs and Border Protection. What Is the Difference Between Anti-Dumping (AD) and Countervailing (CVD)? Countervailing duties offset subsidies a foreign government gives its manufacturers, such as tax breaks or below-market loans.5International Trade Administration. Antidumping and Countervailing Duty Frequently Asked Questions The International Trade Commission must first find that the domestic industry is being harmed before either duty takes effect.
How the Duty Amount Is Calculated
Step 1: Classify the Product
Every traded product is assigned a Harmonized System code, a standardized six-digit identifier used by more than 200 countries. The World Customs Organization maintains the system, which covers over 5,000 commodity groups and classifies more than 98% of goods in international trade.6World Customs Organization. What Is the Harmonized System (HS)? The United States expands those codes in its Harmonized Tariff Schedule (HTS), which adds more digits and assigns a duty rate to each line. Classification is the single most consequential step in the calculation. Specialists spend years learning to classify correctly, and CBP, not the importer, makes the final determination on the correct rate.7U.S. Customs and Border Protection. Determining Duty Rates
Step 2: Value the Goods
Once the product is classified, CBP needs a dollar figure to apply the rate against. The primary method is the transaction value: the price the buyer actually paid or agreed to pay for the goods when sold for export to the United States.8eCFR. 19 CFR 152.103 – Transaction Value The U.S. uses a free-on-board approach, so international shipping and marine insurance are excluded when identified separately. Several costs beyond the sticker price do get added in: packing costs borne by the buyer, selling commissions, royalty or license fees tied to the imported goods, and the value of any materials or tooling the buyer supplied to the foreign manufacturer.
Step 3: Apply the Country of Origin
Where the goods were made, or substantially transformed, determines which rate column applies. Goods from countries with favorable trade agreements may qualify for reduced or zero rates. Goods from countries facing trade restrictions may carry significantly higher rates.9International Trade Administration. Rules of Origin: Substantial Transformation Under the current tariff environment, origin can swing the final rate from 10% to 50% or more on identical products.
The Extra Tariffs Stacked on in 2026
Standard HTS duties are no longer the end of the calculation. Since 2025, the federal government has imposed a series of additional tariffs under various executive authorities, and these layer on top of the standard rate. A product can face its ordinary HTS duty plus a separate tariff tied to its country of origin or its industry.
Significant additional tariffs currently in effect include:10U.S. Customs and Border Protection. U.S. Tariff Overview January 2026
- Steel and steel derivatives: 50% from all countries except the United Kingdom (25%). No additional tariff if the steel was melted and poured in the United States.
- Aluminum and aluminum derivatives: 50% from most countries, 200% on Russian aluminum.
- Automobiles, light trucks, and parts: 25%, with exemptions for USMCA-qualifying goods.
- China and Hong Kong: 20% combined on all goods (a 10% base plus a 10% reciprocal rate).
- Canada: 35% on most goods, 10% on energy and potash, with USMCA exemptions.
- Mexico: 25% on most goods, 10% on potash, with USMCA exemptions.
- Reciprocal tariffs: 10% to 41% across 95 countries, with a baseline 10% for the rest.
These rates shift frequently through executive action. Any importer should check the applicable rate at the time of entry rather than relying on a figure from weeks or months earlier.
Fees That Stack On Top
Customs duty is not the only federal charge at the border. Two fees apply to most commercial imports in addition to the duty itself.
The Merchandise Processing Fee is 0.3464% of the shipment’s value, with a minimum of $33.58 and a maximum of $651.50 per entry for fiscal year 2026. Shipments qualifying for informal entry pay a flat fee instead: $2.69 for automated entries, $8.06 for manual entries not prepared by CBP, and $12.09 for entries prepared by CBP personnel.11Federal Register. Customs User Fees To Be Adjusted for Inflation in Fiscal Year 2026
The Harbor Maintenance Fee applies to cargo loaded or unloaded from commercial vessels at a rate of 0.125% of the appraised value.12eCFR. 19 CFR 24.24 – Harbor Maintenance Fee Air cargo is not subject to the HMF. Between the duty, the MPF, and the HMF, the total federal cost of bringing goods into the country runs noticeably higher than the duty rate alone suggests.
Many states also charge a use tax on imported goods bought for personal or business consumption. State rates run from 0% in the five states without a general sales tax up to 7.25%, and local add-ons can push combined rates above 10%. Importers who buy goods from abroad for use inside the U.S. are expected to self-report and pay this tax if the seller did not collect it.
Ways To Reduce or Avoid Duty
Free Trade Agreements
Goods manufactured in a country that has a free trade agreement with the United States may qualify for reduced or zero duty. The most significant is the United States-Mexico-Canada Agreement, which continues the duty-free treatment for most products that was first established under NAFTA. USMCA-originating goods are also exempt from many of the additional tariffs on Canadian and Mexican imports, which makes qualification worth close attention.13Congress.gov. USMCA Joint Review: Process and Role of Congress A scheduled joint review of USMCA begins in July 2026 and could affect whether the agreement continues past 2036.
De Minimis Is No Longer Available
The statute at 19 U.S.C. § 1321 historically allowed goods valued at $800 or less to enter duty-free.14Office of the Law Revision Counsel. 19 U.S. Code 1321 – Administrative Exemptions That exemption is suspended. As of August 29, 2025, duty-free de minimis treatment was suspended for imports from all countries, regardless of value, origin, shipping method, or type of entry.15CBP. Factsheet Suspension of Duty-Free De Minimis Treatment A February 2026 executive order continued the suspension.16The White House. Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries Even a $50 online purchase from overseas is now subject to applicable duties, taxes, and fees.
GSP Has Expired
The Generalized System of Preferences historically allowed duty-free entry for thousands of products from developing countries. The program expired on December 31, 2020 and has not been renewed by Congress.17U.S. Customs and Border Protection. Generalized System of Preferences (GSP) Products that once entered duty-free under GSP now face standard rates, and importers should not plan around GSP treatment while renewal remains pending.
Drawback
If you import goods, pay the duty, and later export the merchandise or use it to manufacture something that gets exported, you can apply for a drawback: a refund of 99% of the duties, taxes, and fees paid. The goods must be exported or destroyed under customs supervision within five years of importation, and the drawback claim must be filed within that same five-year window.18Office of the Law Revision Counsel. 19 U.S.C. 1313 – Drawback and Refunds Drawback also covers situations where you import a material, use a domestic substitute of the same type in manufacturing, and then export the finished product.
Temporary Importation Under Bond
Goods brought into the country temporarily for exhibition, testing, repair, or similar purposes can enter without paying duty under a Temporary Importation Bond. The goods must be exported or destroyed within three years of importation. Miss that deadline and you owe liquidated damages. Only goods falling within specific tariff categories qualify.19U.S. Customs and Border Protection. Temporary Importation Under Bond (TIB)
Paying the Duty, and What Happens If You Get It Wrong
When goods arrive at a U.S. port, the importer files entry documentation with CBP to get the shipment released. If the entry summary and estimated duties are not submitted at the time of entry, they must be filed within 10 working days.20eCFR. 19 CFR Part 142 – Entry Process Failing to pay or provide a legal justification for nonpayment can result in suspension of immediate release privileges, meaning future shipments get held at the border.21U.S. Customs and Border Protection. Basic Importing and Exporting Commercial importers also need a customs bond, which guarantees that duties, taxes, and fees will be paid.
Underpayment penalties scale with how culpable the importer is. Federal law breaks violations into three tiers:22Office of the Law Revision Counsel. 19 U.S. Code 1592 – Penalties for Fraud, Gross Negligence, and Negligence
- Negligence: a civil penalty of up to two times the duties the government was shorted, or 20% of the dutiable value if the violation did not affect the duty amount.
- Gross negligence: up to four times the lost duties, or 40% of the dutiable value.
- Fraud: up to the full domestic value of the merchandise, which can dwarf the duty itself.
In every case, CBP will also collect the duties that should have been paid in the first place, on top of any penalty. The government has five years from the date of the violation to bring an enforcement action, and that clock pauses during any period the violator is outside the United States or the property is concealed.23Office of the Law Revision Counsel. 19 U.S. Code 1621 – Limitation of Actions