A customs duty is a federal tax the U.S. government charges on goods entering the country from abroad. The importer of record — the person or business bringing the goods in — is legally responsible for paying it before the shipment clears customs.1Office of the Law Revision Counsel. 19 U.S. Code 1484 – Entry of Merchandise What you actually owe depends on three things: how the product is classified, what it is worth, and where it came from. On top of the underlying rate, a series of additional tariffs imposed since 2025 now stack onto most imports, so the total cost of bringing something into the country in 2026 usually runs well above the base duty rate alone.
The Three Basic Duty Structures
Most duties are ad valorem, meaning they are charged as a percentage of the product’s value. A $1,000 item at a 10% rate carries a $100 duty. A specific duty is a flat charge per unit of quantity — per kilogram, per liter, per item — regardless of value. A compound duty combines the two: a percentage plus a fixed per-unit amount.2World Bank. Forms of Import Tariffs – WITS
Two other duties target unfair trade practices. Anti-dumping duties apply when a foreign producer sells goods in the U.S. below its home-market price or below production cost, and the duty is set to close that gap.3U.S. Customs and Border Protection. What Is the Difference Between Anti-Dumping (AD) and Countervailing (CVD)? Countervailing duties offset subsidies that foreign governments provide their manufacturers.4International Trade Administration. Antidumping and Countervailing Duty Frequently Asked Questions Both require an International Trade Commission finding that a domestic industry is being harmed.
How the Duty Amount Is Calculated
Product Classification
Every traded product is assigned a Harmonized System (HS) code, a standardized six-digit number 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 merchandise in international trade.5World Customs Organization. What Is the Harmonized System (HS)? The U.S. Harmonized Tariff Schedule extends the code with additional digits and sets the duty rate for each product. Classification is the single most consequential step in the whole process. Experts spend years learning to do it properly, and CBP — not the importer — makes the final call on the correct rate.6U.S. Customs and Border Protection. Determining Duty Rates
Valuation
Once a product is classified, the rate is applied against a dollar value. 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.7eCFR. 19 CFR 152.103 – Transaction Value The U.S. uses a free-on-board approach, so international shipping and marine insurance are excluded from the dutiable value when they are shown separately. Several costs do get added in: packing paid by the buyer, selling commissions, royalty or license fees tied to the goods, and the value of any materials or tooling the buyer supplied to the foreign manufacturer.
Country of Origin
Where the goods were made — or substantially transformed — determines which rate column applies. Products from countries with favorable trade agreements may qualify for reduced or zero rates. Products from countries facing penalty tariffs carry significantly higher rates.8International Trade Administration. Rules of Origin: Substantial Transformation Under the current tariff regime, the same product can carry a 10% or 50% rate depending entirely on origin.
Additional Tariffs Layered on Top
The 2026 picture is not the standard HTS rate and nothing else. On top of the base duty, the federal government has imposed a series of additional tariffs under executive authority. A shipment can face its normal HTS duty plus a separate tariff based on its country of origin or industry category.
Some of the most significant additional tariffs currently in effect:9U.S. Customs and Border Protection. U.S. Tariff Overview January 2026
- Steel and steel derivatives: 50% from all countries except the UK, which faces 25%. No additional tariff if the steel was melted and poured in the United States.
- Aluminum and derivatives: 50% from most countries, 200% on Russian aluminum.
- Passenger vehicles, light trucks, and their parts: 25%, with exemptions for USMCA-qualifying goods.
- China and Hong Kong: 20% combined on all goods (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 10% baseline for the rest.
These rates shift often through executive action. Check the applicable rate at the time of entry, not what was in effect weeks or months earlier.
Who Actually Pays the Duty
Federal regulations define the importer as the person primarily liable — typically the consignee, the owner of the goods, or a customs broker acting on their behalf.10eCFR. 19 CFR 101.1 – Definitions The foreign manufacturer or exporter does not pay U.S. customs duties. The payment comes from the American side of the transaction.
Economically, the cost rarely stops there. Research on the tariffs imposed since 2018 found that nearly the full tariff amount passed through to import prices, with foreign sellers not lowering their prices to absorb it. Importers then raised retail prices, increasing shelf prices on imported goods by roughly 7 percentage points on average through early 2026. Domestic producers raised prices to match. Consumers end up carrying most of the load through higher prices.
Fees That Come With the Duty
Customs duties are not the only charge. Two federal fees apply to most commercial imports.
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 0.125% of the appraised value.12eCFR. 19 CFR 24.24 – Harbor Maintenance Fee Air cargo is exempt. Many states also charge use tax on imported goods; state rates run from 0% in the five states with no general sales tax to 7.25%, and local additions can push combined rates above 10%. Buyers who import goods for personal or business use are expected to self-report use tax if the seller did not collect it.
Ways To Reduce or Avoid Customs Duty
Free Trade Agreements
Goods manufactured in a country that has a free trade agreement with the U.S. may qualify for reduced or zero rates. The most consequential is the United States-Mexico-Canada Agreement, which continues the duty-free treatment for most products that existed under NAFTA. USMCA-originating goods are also exempt from many of the additional tariffs above, so qualification is worth close attention for anyone importing from Canadian or Mexican suppliers.13Congress.gov. USMCA Joint Review: Process and Role of Congress A scheduled joint review begins in July 2026, and its outcome could affect whether USMCA continues past 2036.
The De Minimis Exemption Is Suspended
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 not currently available. 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 confirmed the continued 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.
Generalized System of Preferences Has Expired
The GSP program historically provided duty-free entry for thousands of products from developing countries. It expired on December 31, 2020 and has not been renewed.17U.S. Customs and Border Protection. Generalized System of Preferences (GSP) Products that once entered duty-free under GSP now face standard rates. Congressional renewal is pending, but importers cannot plan around it.
Duty Drawback
If you import goods, pay the duty, and then export the merchandise or use it to make something that gets exported, you can apply for a drawback: a refund of 99% of the duties, taxes, and fees you 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 applies when you import a material, use a domestic substitute of the same type in manufacturing, and export the finished product.
Temporary Importation Under Bond
Goods brought in temporarily for exhibition, testing, repair, or similar purposes can enter duty-free under a Temporary Importation Bond. The goods must be exported or destroyed within three years. Missing that deadline triggers liquidated damages. Only goods within specific tariff categories qualify.19U.S. Customs and Border Protection. Temporary Importation Under Bond (TIB)
Payment: When, How, and the Bond You Need
When goods arrive at a U.S. port, the importer files entry documentation 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, without a legal justification, can suspend your immediate-release privileges and cause future shipments to be held at the border.21U.S. Customs and Border Protection. Basic Importing and Exporting
CBP accepts U.S. currency and coin, bank drafts, cashier’s checks, certified checks drawn on U.S. banks, government checks endorsed to CBP, postal and bank money orders, and authorized credit or charge cards. For importers using the Automated Broker Interface, the preferred method is Automated Clearinghouse debit or credit, which lets you group multiple entries onto a single statement and pay once.22eCFR. 19 CFR 24.1 – Collection of Customs Duties, Taxes, Fees, Interest Personal uncertified checks are accepted only if the importer has a bond on file or has been pre-approved.
Commercial imports generally require a customs bond, a financial guarantee that duties, taxes, and fees will be paid. A single entry bond covers one shipment and is typically set at the total entered value plus duties and fees. A continuous bond covers all imports for a year and is usually set at 10% of duties, taxes, and fees paid over the prior 12 months. Bond amounts cannot fall below $100.23U.S. Customs and Border Protection. Bonds – How Are Continuous and Single Entry Bond Amounts Determined If you import regularly, a continuous bond saves paperwork and surety costs.
Penalties for Underpayment
CBP treats duty underpayment seriously, and the penalty scales with culpability. Federal law breaks violations into three tiers:24Office 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 shorted duties, 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 far exceed the duty amount itself.
In every case, CBP also collects the duties actually owed on top of the penalty. The government has five years from the date of the violation to bring an action, and that clock pauses during any period the violator is outside the United States or the property is concealed.25Office of the Law Revision Counsel. 19 U.S. Code 1621 – Limitation of Actions