The party that pays import tariffs to the U.S. government is the importer of record, meaning the U.S.-based business, individual, or licensed broker bringing the goods across the border. Foreign manufacturers and foreign governments do not write the check to U.S. Customs and Border Protection. The importer does. From there, the cost typically travels down the supply chain and shows up in the retail price consumers pay. In 2026 that pass-through matters more than usual, because layered tariff programs have pushed combined rates on many products well above historical norms and the long-standing duty-free treatment for shipments under $800 is suspended.
Who the Importer of Record Is
Every commercial shipment entering the United States needs a designated importer of record (IOR). The IOR can be the business buying the goods, the owner of the merchandise, or a licensed customs broker acting on behalf of either.1U.S. Customs and Border Protection. Tips for New Importers and Exporters Whoever fills the role carries the full legal responsibility for filing accurate entry documents and paying all duties, taxes, and fees to CBP. Federal law requires the IOR to use “reasonable care” when reporting the shipment’s value, classification, and origin.2Office of the Law Revision Counsel. 19 USC 1484 – Entry of Merchandise
Hiring a customs broker to handle the paperwork does not shift the legal liability. A broker must have a power of attorney on file before acting for an IOR,3GovInfo. Title 19 – Customs Duties, Section 141.46 – Power of Attorney Retained by Customhouse Broker but if the broker files an entry with an incorrect value or the wrong tariff classification, CBP pursues the IOR, not the broker.
The penalties for inaccurate entries scale with fault. A fraudulent filing can trigger a penalty up to the full domestic value of the merchandise. Gross negligence carries a penalty up to the lesser of the domestic value or four times the duty loss (or 40 percent of dutiable value if no duties were affected). Simple negligence caps at the lesser of the domestic value or two times the duty loss, or 20 percent of dutiable value.4Office of the Law Revision Counsel. 19 USC 1592 – Penalties for Fraud, Gross Negligence, and Negligence These apply even when the government did not actually lose revenue, so an honest classification error can still generate a bill.
Who Funds the Payment Under the Sales Contract
CBP always looks to the IOR for the money, but the private sales contract between buyer and seller decides who ultimately provides it. International Commercial Terms (Incoterms) set those boundaries.
Under Delivered Duty Paid (DDP) terms, the foreign seller covers all tariffs and taxes before delivering the goods. The buyer receives the shipment with no customs bill to settle. The seller absorbs the full landed cost and fronts the cash for duties in a system it may not know well.
Under Delivered At Place (DAP) or Ex Works (EXW) terms, the buyer picks up the tariff obligation. The buyer typically serves as the IOR or designates a broker and pays all duties once the goods reach the border. That distinction decides whether the purchase order price is the final cost or just the starting point. An importer who signs an EXW contract without budgeting for duties on a shipment subject to layered tariffs can face an unexpectedly large bill at the port.
How the Importer Actually Pays CBP
Payments flow through the Automated Commercial Environment (ACE), CBP’s centralized digital trade processing system.5U.S. Customs and Border Protection. ACE – The Import and Export Processing System Most commercial importers pay by ACH Debit, authorizing CBP to pull funds directly from a bank account.6U.S. Customs and Border Protection. Automated Clearinghouse ACH Credit, in which the importer pushes funds to CBP, is also available. Small or informal entries sometimes use checks or credit cards.
Estimated duties are due no later than 12 working days after entry or release of the merchandise, whichever comes first.7Office of the Law Revision Counsel. 19 USC 1505 – Payment of Duties and Fees In practice, many importers deposit duties when they file the entry summary.8eCFR. 19 CFR 141.101 – Time of Deposit High-volume importers can use ACE’s Periodic Monthly Statement program to consolidate a month’s duties into a single interest-free payment due by the 15th business day of the following month.9U.S. Customs and Border Protection. ACE Periodic Monthly Statements
Most commercial importers also need a customs bond, a financial guarantee to CBP that duties and fees will be paid. A single-entry bond covers one shipment; a continuous bond, typically set at $50,000, covers a full year of imports for a few hundred dollars in annual premium, depending on the importer’s profile.
Each entry goes through liquidation, CBP’s final determination of the duty owed.10eCFR. 19 CFR Part 159 – Liquidation of Duties If CBP finds the importer underpaid, it bills for the difference plus interest; the underpayment rate for the first quarter of 2026 is 7 percent.11Federal Register. IRS Interest Rates Used in Calculating Interest Overpayments are refunded with interest within 30 days of liquidation.
Fees Beyond the Tariff Rate
The duty rate itself is not the only charge on the entry. Two mandatory fees apply to most commercial shipments. The Merchandise Processing Fee is 0.3464 percent of shipment value for fiscal year 2026, with a minimum of $33.58 and a maximum of $651.50 per entry; goods entering under USMCA preferential treatment are exempt.12Federal Register. Customs User Fees To Be Adjusted for Inflation in Fiscal Year 2026 The Harbor Maintenance Fee is 0.125 percent of appraised value, but only on cargo arriving by ocean vessel; air freight and overland shipments from Canada and Mexico are exempt.13eCFR. 19 CFR 24.24 – Harbor Maintenance Fee On a $100,000 ocean shipment, that adds roughly $346 in MPF and $125 in HMF, on top of whatever tariff rate applies.
What the Importer Pays in 2026
The size of the check depends on what the product is and where it came from. Standard duty rates come from the Harmonized Tariff Schedule, but several additional programs stack on top.
Steel and aluminum imports from most countries currently carry an additional 50 percent tariff under Section 232 of the Trade Expansion Act. The United Kingdom faces 25 percent, steel melted and poured domestically or aluminum smelted and cast domestically is exempt, and Russian-origin aluminum faces 200 percent.14U.S. Customs and Border Protection. U.S. Tariff Overview January 2026
Products from China are subject to Section 301 tariffs originally imposed in 2018, with rates from 7.5 to 25 percent across most affected categories. Targeted increases following a 2024 review pushed some categories much higher: 100 percent on electric vehicles, 50 percent on solar cells, 50 percent on semiconductors. Additional increases took effect January 1, 2026, including 25 percent on lithium-ion batteries for non-vehicle use and permanent magnets.15U.S. Customs and Border Protection. Section 301 Trade Remedies Frequently Asked Questions
Beginning in 2025, the administration added country-specific reciprocal tariffs on goods from dozens of trading partners: 20 percent for the European Union, 24 percent for Japan, 26 percent for India, 46 percent for Vietnam, 34 percent for China, among others.16The White House. Annex I – Country Reciprocal Tariff, Adjusted These layer on top of any Section 301 or 232 tariffs, so the total effective rate on some Chinese goods can exceed 60 or 70 percent before the standard HTS rate is added. Reciprocal rates have been paused and modified since introduction, so the rate in effect at the time of entry is what governs.
The $800 de minimis exemption that once let low-value shipments enter duty-free was suspended globally effective August 29, 2025,17The White House. Suspending Duty-Free De Minimis Treatment for All Countries and the suspension was continued into 2026.18The White House. Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries Every shipment, regardless of value or origin, now goes through formal or informal entry and is subject to applicable duties, taxes, and fees. Consumers ordering directly from overseas retailers should expect a duty bill even on small purchases.
How the Cost Reaches Consumers
The importer writes the check, but the financial burden rarely stays there. Businesses treat tariffs as a cost of goods sold, alongside shipping and raw materials, and adjust retail prices accordingly. A 25 percent tariff does not automatically become a 25 percent retail price increase, because the duty applies to the import value rather than the final shelf price that includes domestic markup, labor, and distribution. But the direction is consistent. Higher tariffs raise consumer prices.
In competitive markets, importers sometimes absorb part of the cost to keep prices attractive, and foreign suppliers occasionally cut their prices to stay competitive, sharing the burden. Economic research on recent tariff actions has consistently found that most of the cost lands on U.S. consumers and importing businesses rather than on foreign producers. The layered structure in 2026 makes that effect sharper than in prior decades, particularly for goods sourced from China, where combined rates on some categories now exceed what many businesses can absorb without passing the increase through at retail.