Guide to Tariffs and Customs Duty - How to Easily Import your Product
By now you should know that the US has imposed a 10% tariff on around $200 Billion worth of goods exported from China into the United States and is expected to rise to 25% on March 1st, pending a lack of a trade agreement. Now there is a great deal of uncertainty with the tariffs, but we will let you know how you can navigate it the best that you can. Even before the current trade dispute, buyers still had to pay duties and customs fees on a wide range of products shipped into the United States.
Please note: This section is also written from an American perspective, however, the process of finding out tariffs and duties the is relatively similar to most Western countries as well as the E.U.
Figuring out the HTS Code
One of the big things that you need to know about your product is the HTS Code. HTS stands for Harmonized Tariff Schedule and the system in which the US determines what tariffs are placed on a product. Any product imported into the US needs to be accurately classified by its HTS code and the tariffs will be applied accordingly. The HTS code is based on the International Harmonized System, which is a globally recognized system of trade classification.
This part can be difficult, especially if it’s a new product it takes a decent amount of searching to find just the right product category. If you're importing an existing product, then they should have a classification. But if you are importing a new product that does not exist in the market it can he easiest way to do it is to look for similar items or items made of the same material.
You can freely search the US’s database here: https://hts.usitc.gov/
In the end, you should have an 10 digit HTS number (####.##.####) that corresponds to your product. Now that you have that figured out you can look up the tariffs.
Looking up the Tariffs of your product
This is for importing into the United States, however, almost every other country publicly posts the rates on a publicly available government website. For the most part, the rates will be done by the department or ministry that handles trade. You can use the same HTS tool to look up you tariffs as you did to look up the HTS code: https://hts.usitc.gov/
If you are importing from China into the United States, you can view the full list of affect products and their tariffs here [PDF Warning]: https://ustr.gov/sites/default/files/2018-13248.pdf
Looking to avoid the tariffs on Chinese goods? Sourcing from Vietnam is one of your best options. Cosmo Sourcing has been helping clients find suppliers in Vietnam since 2013 and is one of the only sourcing companies that can source from both Vietnam and China. If you’re interested, check out our Vietnam Sourcing page or reach out directly to us at info@cosmosourcing.com
Existing tariffs and Duty Taxes
Keep in mind that in addition to the new tariffs there are still existing duties and fees that are applicable to most products. By using the same link to the HTS database you should be able to find the existing duties. This database has the duty listed,
Screenshot of the HTS look tool.
In the above you’ll notice multiple columns, From left to right they are
Heading/Subheading, which is the HTS Number (4, 6, and 8 digits) Stat Suffix, which combined with the Heading/Subheading is the 10 digit HTS Number
Article description
Unit of Quantity
Tariff Rates
General Rate of Duty
Special Rate of Duty
Column 2 Rate of Duty
This is just a quick summary, the full in depth guide can be found here [PDF Warning] http://www.usitc.gov/documents/hts_external_guide.pdf
Regulatory issues
Looking up regulatory issues tends to be the hardest aspect of the validation step. There isn’t really a centralized database, for what regulations are needed for each product.
The Best resource in the US is from the Customs and Borders Protection (CBP), which publishes a number of guides across a huge range of products and classifications. Not sure if what your importing is a bolt or a screw? They have a guide for that. Are you imported mittens, figure out how they are made because if they are crocheted or knitted than surprise! You’re getting tariffs! You’re going to want to sit down for this one. Ready? Check out this groundbreaking decision on The difference between candle holders and decorative glass!
To add further complications, agencies such as the FDA and FCC regulate the import of goods but defer the enforcement to CBP. if you are importing anything relating to health or food, it’s most likely that it is subject to FDA approval or regulations. If you Importing an electronic item, particularly one that has radio waves, including but not limited to cellular, wifi or Bluetooth, that you need to get FCC approval. IF you are importing natural food items it is regulated by the Department of Agriculture, but it also may be subject to the FDA as well. There are more agencies that have their own regulation but the FCC and FDA are the two that we encounter the most. Ultimately it’s up to you to research and find out the regulations.
The CBP is the agency that is in charge of clearing goods for export, so they are the final authority on this issue. If you are really unsure, you can message the CBP and request a letter to classify or clarify the goods. However, at the time of this writing, the Government and CBP is shut down and not responding to any request. Even when the agency is open, there is no guarantee that they will respond and if they do the response can take weeks. At the end of the day, we recommend you do the research yourself.
You can go to the Customs and Border Protection's website and see the full list of guides. https://www.cbp.gov/trade/rulings/informed-compliance-publications
Let Cosmo worry about Tariffs for you
If you don’t have time to look up the tariffs feel free to reach out to Cosmo and we can look up your HTS code, determine the duties and look up any regulatory issues, for a one time fee of $75.
In addition Cosmo Sourcing has a full range of services to Plan, Find, Make and ship your product from China or Vietnam. We combine all of these services into our Simple Sourcing package, which is designed to do everything to take your idea, turn it into a product and ship it to an Amazon warehouse. Cosmo can do everything from creating a product spec sheet, Validation, sourcing, ordering and evaluation samples, arranging inspections, finding freight forwarders, Quality assurance, negotiations and even working with Prep and fulfillment Centers in the States. Our goal is to handle every single step of your business in China and Vietnam for you.
We have helped clients from Fortune 500 too small FBA sellers, reach out to us and let us know how we can help you. info@cosmosourcing.com