Understanding US Customs Duties: IGI, MPF, and HMF Explained

The Three Components of Import Costs

When goods enter the United States, importers are responsible for three main categories of government-imposed charges: customs duties (the tariff), the Merchandise Processing Fee (MPF), and the Harbor Maintenance Fee (HMF). Together with freight, insurance, and broker fees, these charges determine your total landed cost. Understanding each component is essential for accurate cost planning, competitive pricing, and identifying opportunities to reduce your duty burden legally.

Customs Duties (The Tariff Rate)

The customs duty is calculated based on the HTS classification of your product and the country of origin. Most US tariff rates are ad valorem, meaning they are expressed as a percentage of the appraised value of the goods. For example, a 6.5% ad valorem rate on a shipment valued at $100,000 results in a duty of $6,500. Some products have specific rates (a fixed amount per unit, such as $0.05 per kilogram) or compound rates that combine both ad valorem and specific components.

• Column 1 General: Normal Trade Relations (NTR) rates — apply to most countries.
• Column 1 Special: Preferential rates under trade agreements like USMCA, GSP, CAFTA-DR, and others.
• Column 2: Rates for countries without NTR status — significantly higher and rarely applied.
• Section 301/201/232: Additional tariffs imposed on specific countries or product categories (e.g., China Section 301 tariffs).

Merchandise Processing Fee (MPF)

The MPF is a fee charged by CBP on most formal entries (shipments valued over $2,500). It is calculated at 0.3464% of the appraised value of the merchandise, with a minimum of $31.67 and a maximum of $614.35 per entry. This fee funds CBP operations and applies regardless of the duty rate — even duty-free goods are subject to MPF unless they qualify for a specific exemption, such as goods entering under certain trade preference programs.

Harbor Maintenance Fee (HMF)

The HMF applies to cargo arriving at US seaports. It is calculated at 0.125% of the value of the cargo and funds the maintenance of US harbors and channels through the Harbor Maintenance Trust Fund, managed by the Army Corps of Engineers. The HMF applies only to waterborne imports — goods arriving by air or land are exempt. There is no cap on the HMF, so on high-value ocean shipments the fee can be significant.

How to Calculate Your Total Landed Cost

To calculate landed cost, start with the transaction value of the goods (the price actually paid or payable, adjusted for any assists, royalties, or packing costs). Add international freight and insurance to get the CIF value. Then apply the duty rate from the HTS, add MPF (0.3464% of appraised value, capped at $614.35), and add HMF (0.125% if arriving by sea). Finally, add domestic transportation, broker fees, and any bond premiums. The resulting figure is your total landed cost per unit or per shipment.