Question 1

What is an HTS code?

Accepted Answer

An HTS code (Harmonized Tariff Schedule code) is the 10-digit number the United States uses to classify every imported product. The first 6 digits follow the international Harmonized System used by 200+ countries; digits 7–10 are US-specific. Every commercial import entry must include the correct 10-digit HTS code — it determines the applicable duty rate, regulatory requirements, and eligibility for trade agreement preferences.

Question 2

What's the difference between an HTS code and an HS code?

Accepted Answer

An HS code is the international 6-digit classification maintained by the World Customs Organization and used by virtually every country in the world. An HTS code is the US extension — 10 digits total, with the first 6 matching the HS code and digits 7–10 being US-specific. When importing to the US, you need the full 10-digit HTS code. When exporting from the US, you use a Schedule B code (also 10 digits, maintained by the US Census Bureau).

Question 3

How do I find the correct HTS code for my product?

Accepted Answer

How do I find the correct HTS code for my product?

Question 4

What are the General Rules of Interpretation (GRI)?

Accepted Answer

The GRIs are the six rules that CBP and courts use to classify products when the HTS heading text doesn't unambiguously cover the product. GRI 1 says to classify by the terms of the headings and section/chapter notes — it resolves most classifications. GRI 2 covers unfinished or incomplete goods and mixtures. GRI 3 handles goods classifiable under two headings (use the most specific; for sets, classify by the essential character). GRI 4 covers goods not classifiable by GRIs 1–3. GRI 5 covers containers and packing. GRI 6 applies GRIs 1–5 to subheadings.

Question 5

What happens if I use the wrong HTS code?

Accepted Answer

CBP can audit import entries for up to 5 years. If they find a misclassification that resulted in underpayment: you owe the unpaid duty plus interest (currently around 8% annually) and potentially penalties of 20%–40% of the unpaid amount for negligence. Intentional misclassification can result in fraud penalties up to 4× the unpaid duty. If you discover an error before CBP contacts you, filing a prior disclosure significantly reduces penalty exposure.

Question 6

Can my supplier provide the HTS code?

Accepted Answer

Your supplier can provide their local HS code, but it may not be identical to the US HTS code. The first 6 digits are internationally harmonized and usually match, but digits 7–10 are country-specific and will differ. More importantly, the legal liability for classification accuracy rests with the US importer of record, not the foreign supplier. Always verify the 10-digit HTS code yourself or through a US customs broker.

Question 7

What is a binding ruling and should I get one?

Accepted Answer

A binding ruling is an official CBP determination of how a specific product must be classified. It's legally binding on CBP and provides certainty that you won't be reclassified later. Apply at rulings.cbp.gov. Binding rulings take 30 days or more and require a detailed product description. They're most valuable for high-volume, high-duty products where reclassification risk is significant, or where your classification is genuinely ambiguous.

Question 8

What are Section 301 tariffs?

Accepted Answer

Section 301 tariffs are additional duties on Chinese-origin goods imposed by the US Trade Representative starting in 2018, following an investigation into China's unfair trade practices (IP theft, forced technology transfer, market restrictions). They cover four lists of products: Lists 1–3 carry a 25% rate; List 4A carries 7.5%. These stack on top of the base HTS duty rate and any IEEPA tariffs.

Question 9

How do I know if my product is subject to Section 301?

Accepted Answer

Section 301 applicability is determined at the 8-digit HTS level. Take your product's 10-digit HTS code, drop the last two digits, and search the USTR Section 301 lists for that 8-digit code. The USTR publishes the full lists on its website. TariffClassify checks Section 301 automatically when you classify a product or enter an HTS code in the landed cost calculator.

Question 10

Do Section 301 tariffs apply to goods from China assembled in another country?

Accepted Answer

It depends on whether there was a substantial transformation in the third country. If goods are manufactured or meaningfully transformed in Vietnam, Mexico, or another country — not just minimally processed or assembled — they may have a non-Chinese origin and avoid Section 301. CBP actively investigates transshipment (routing Chinese goods through a third country without genuine manufacturing) and treats it as origin fraud. The line between legitimate third-country manufacturing and illegal transshipment requires careful legal analysis.

Question 11

Are Section 301 exclusions still available?

Accepted Answer

Most Section 301 exclusions have expired. The USTR granted thousands of product-specific exclusions between 2018 and 2021, but the majority were not renewed. A small number of exclusions remain active. Check the USTR's Section 301 exclusion database for current status. If you believe your product qualifies for an exclusion, consult a trade attorney — the process for requesting new exclusions is politically sensitive.

Question 12

Can I get a refund on Section 301 tariffs I've already paid?

Accepted Answer

If you exported the goods (or products made from them), yes — through duty drawback. Drawback lets you recover 99% of duties paid, including Section 301, on goods that are re-exported or used in products that are exported. You have 5 years from the import date to file. If the goods were consumed domestically, there is no general refund mechanism, though you may qualify if a retroactive exclusion is granted for your product.

Question 13

What are IEEPA tariffs?

Accepted Answer

IEEPA tariffs are duties imposed by executive order under the International Emergency Economic Powers Act. Starting in 2025, the US government imposed a baseline 10% tariff on imports from most countries, with higher rates for certain trading partners with large trade deficits. These tariffs are distinct from Section 301 (which is China-specific) and stack on top of base HTS duties.

Question 14

Do IEEPA tariffs apply to USMCA goods from Canada and Mexico?

Accepted Answer

USMCA-qualifying goods from Canada and Mexico may be exempt from IEEPA tariffs or subject to reduced rates. This depends on whether the goods genuinely meet the applicable USMCA rules of origin. Non-qualifying goods (e.g., goods from China merely transshipped through Mexico) do not receive USMCA treatment. Verify USMCA qualification with your customs broker — origin documentation is more important than ever.

Question 15

How do IEEPA tariffs stack with Section 301?

Accepted Answer

They stack additively. A Chinese-origin product might carry: 3% base HTS duty + 25% Section 301 + IEEPA rate. All apply to the same entered value. The result is that effective tariff rates on many Chinese-origin goods now exceed 35–50% before other fees. The TariffClassify landed cost calculator shows all layers applied together.

Question 16

Can IEEPA tariff rates change without notice?

Accepted Answer

Yes. IEEPA tariffs are set by executive order and can be modified, suspended, or eliminated by executive action alone — no Congressional approval required. Rates have been adjusted multiple times since the initial announcement. For ongoing import programs, build tariff adjustment clauses into your supply contracts and monitor USTR and CBP announcements closely.

Question 17

What is the Merchandise Processing Fee (MPF)?

Accepted Answer

MPF is a CBP user fee charged on most formal commercial entries. The rate is 0.3464% of the shipment's entered value, subject to a minimum of $29.66 and a maximum of $575.35 per entry. MPF is assessed per entry, not per shipment — if multiple containers arrive on the same vessel under separate entries, each entry is assessed MPF separately. Goods qualifying for USMCA from Canada or Mexico are exempt from MPF.

Question 18

What is the Harbor Maintenance Fee (HMF)?

Accepted Answer

HMF is a fee collected by CBP on behalf of the Army Corps of Engineers for maintenance of US commercial ports. The rate is 0.125% of the shipment value with no cap. HMF applies only to ocean freight shipments — air and truck entries are not subject to HMF. Unlike MPF, there is no minimum or maximum.

Question 19

Are MPF and HMF eligible for duty drawback?

Accepted Answer

Yes, both MPF and HMF are eligible for drawback when goods are exported. MPF drawback is available at 99% of the MPF paid, subject to a statutory limitation that total MPF drawback cannot exceed the MPF paid on a given entry. HMF drawback is also available at 99%. Both are included in the same drawback claim filed with CBP.

Question 20

What is the difference between formal and informal entries?

Accepted Answer

Informal entries cover shipments valued under $2,500 (for most goods). They have simplified documentation requirements and are not subject to MPF (though some fees may apply). Formal entries are required for shipments above $2,500 and for certain regulated products regardless of value. Formal entries require an HTS classification, pay full duty rates, and are subject to MPF.

Question 21

What is duty drawback?

Accepted Answer

Duty drawback is a federal program (19 USC § 1313) that allows importers to recover 99% of duties paid on imported goods when those goods are subsequently exported or used in products that are exported. It has existed since 1789 and applies to customs duties, Section 301 tariffs, IEEPA tariffs, MPF, and HMF.

Question 22

What are the three types of drawback?

Accepted Answer

Manufacturing drawback: imported inputs used to make goods that are then exported. You recover duties on the imported inputs proportional to the amount used in the exported product. Unused merchandise drawback: goods imported and later exported without substantial US manufacturing. The goods can be commercially interchangeable substitutes, not necessarily the same physical units. Rejected merchandise drawback: goods imported and found to be defective, non-conforming, or shipped without consent, then returned or destroyed.

Question 23

How long do I have to file a drawback claim?

Accepted Answer

You have 5 years from the date of importation to file a drawback claim. For manufacturing and unused merchandise drawback, the goods must also be exported within 5 years of the import date. The 5-year window is a hard deadline — late claims are rejected regardless of merit. Start tracking import entries and matching them to exports now for goods you're importing today.

Question 24

How much does it cost to file drawback?

Accepted Answer

If you file yourself, the direct cost is mainly staff time. If you use a drawback specialist or customs broker, they typically work on contingency — charging 20%–35% of the recovered amount with no upfront fee. For most companies, the economics favor drawback only when annual duty spend on export-related goods exceeds roughly $50,000–$100,000.

Question 25

Does drawback apply to Section 301 and IEEPA tariffs?

Accepted Answer

Yes. CBP has confirmed that Section 301 tariffs are eligible for drawback under standard rules. IEEPA tariffs are similarly eligible. Because Section 301 and IEEPA are often the largest component of the duty bill, their eligibility for drawback is significant — a company exporting finished goods that incorporate Chinese-origin components paying 25% Section 301 can recover most of that cost.

Question 26

What are antidumping duties?

Accepted Answer

Antidumping (AD) duties are imposed when foreign producers sell goods in the US at prices below their home market prices or below cost of production, injuring US domestic producers. The rate is calculated to offset the "dumping margin." For Chinese goods, Commerce uses a surrogate country methodology that often produces high rates. AD rates apply per producer — two producers in the same country can have very different rates.

Question 27

What are countervailing duties?

Accepted Answer

Countervailing duties (CVD) are imposed to offset subsidies provided by foreign governments to their domestic producers — grants, preferential loans, below-market raw materials, tax benefits. The CVD rate reflects the calculated value of the subsidy. CVD rates tend to be lower than AD rates but can be significant, particularly for goods from countries with large state enterprise sectors.

Question 28

How do I know if an AD/CVD order covers my product?

Accepted Answer

Check the Commerce Department's AD/CVD database at antidumping.trade.gov. Search by product type and country. Read the scope language carefully — it describes exactly which products are covered, often using technical specifications. If coverage is uncertain, you can request a formal scope ruling from Commerce. This takes several months but provides legal certainty.

Question 29

Why might I owe more AD duties than the rate at the time of entry?

Accepted Answer

The rate you pay at entry is a cash deposit based on the most recent administrative review. Commerce conducts annual administrative reviews that can change rates retroactively. When an entry is "liquidated," it's assessed at the final rate from the review covering your entry period — which may be higher or lower than your deposit. If higher, you owe the difference. This can arrive as a large unexpected bill 1–3 years after importation.

Question 30

What is circumvention of an AD/CVD order?

Accepted Answer

Circumvention occurs when a producer routes goods through a third country — typically by doing minor assembly or processing there — specifically to avoid an AD/CVD order. Commerce investigates circumvention and can extend the order's scope to cover goods from the third country. Companies that shifted from China to Vietnam or other countries to avoid AD orders have sometimes found those third-country goods subsequently covered by circumvention determinations.

Question 31

How is country of origin determined for duty purposes?

Accepted Answer

For goods made entirely in one country, origin is straightforward. For goods manufactured or processed in multiple countries, origin is determined by "substantial transformation" — a change in character, use, or name resulting from manufacturing or processing in the last country. The standard is product-specific and often fact-intensive. CBP has issued rulings on substantial transformation for thousands of product categories.

Question 32

What is USMCA and who benefits from it?

Accepted Answer

The United States-Mexico-Canada Agreement (USMCA, effective July 1, 2020) is a free trade agreement that eliminates or reduces tariffs on qualifying goods traded among the US, Canada, and Mexico. To qualify, goods must meet product-specific rules of origin, which vary by HTS chapter. USMCA-qualifying goods are also exempt from the Merchandise Processing Fee. Documentation requirements include a certificate of origin (which can be made by the importer, exporter, or producer).

Question 33

Does USMCA protect imports from IEEPA tariffs?

Accepted Answer

USMCA-qualifying goods may be exempt from or receive reduced IEEPA tariff rates. The qualification requires genuine USMCA-compliant origin — goods from China transshipped through Mexico without manufacturing do not qualify. With IEEPA tariffs adding significantly to costs, properly documenting USMCA qualification has become a material financial question for imports from Canada and Mexico.

Question 34

What is first sale valuation and how does it reduce duties?

Accepted Answer

US customs duties are assessed on the transaction value — what you paid for the goods. If goods pass through an intermediary (trading company) between the factory and you, you're normally paying and declaring the trading company price. First sale valuation allows you to use the factory's price (the "first sale") as the dutiable value, which is lower. This reduces duties proportionally across all applicable rates — base duty, Section 301, IEEPA, MPF, HMF. First sale requires documentation proving the factory transaction and meeting specific CBP criteria.

Import & Tariff FAQ

HTS Codes & Classification

Section 301 Tariffs

IEEPA & Executive Order Tariffs

MPF, HMF & Other Fees

Duty Drawback & Refunds

Antidumping & Countervailing Duties

Country of Origin & Trade Agreements

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