What Are Tariffs? A Complete Guide for Importers

Tariffs are taxes imposed by governments on imported goods. In the United States, tariffs range from 0% to over 100% depending on the product and its country of origin. They serve three main purposes: generating government revenue, protecting domestic industries from foreign competition, and functioning as a tool in trade negotiations. If you import goods into the US — or plan to — understanding tariffs is essential to calculating your landed cost and staying compliant with customs regulations.

Types of Tariffs

Not all tariffs work the same way. The three main types differ in how the duty amount is calculated:

• Ad valorem tariffs — A percentage of the product's customs value. For example, a 25% ad valorem tariff on a $10,000 shipment means you pay $2,500 in duties. This is the most common type in the US.
• Specific tariffs — A fixed dollar amount per unit of quantity. For example, $0.15 per kilogram or $2.00 per liter, regardless of the product's price.
• Compound tariffs — A combination of both. For example, 5% ad valorem plus $1.50 per kilogram. These are common for agricultural products and certain textiles.

How Tariffs Are Calculated

Calculating your import duty requires three pieces of information: (1) the HTS code for your product, which determines the duty rate; (2) the country of origin, which affects whether preferential rates apply; and (3) the customs value — typically the transaction value, meaning the price you actually paid or will pay for the goods.

The basic formula is: Duty = Customs Value × Duty Rate. On top of the tariff, US importers also pay the Merchandise Processing Fee (MPF) of 0.3464% of the customs value (minimum $31.67, maximum $614.35 per entry in 2026) and, for ocean shipments, the Harbor Maintenance Fee (HMF) of 0.125% of the cargo value.

Who Actually Pays Tariffs?

A common misconception is that the exporting country pays the tariff. In reality, the importer of record — the US company bringing goods into the country — is legally responsible for paying all duties. These costs are then typically passed on to the end consumer through higher prices, absorbed by the importer as lower margins, or shared between the buyer and seller through negotiation. Studies by the Federal Reserve Bank of New York and others have consistently found that the cost of US tariffs has been almost entirely borne by American importers and consumers.

Key Tariff Programs and Categories

• MFN (Most Favored Nation) rates — The standard tariff rate applied to imports from any WTO member country. These are the "Column 1 General" rates in the HTS.
• Section 301 tariffs — Additional duties on goods from China, ranging from 7.5% to 100%, imposed to address unfair trade practices. These are layered on top of the MFN rate.
• Section 232 tariffs — National security tariffs of 25% on steel and 10% on aluminum from most countries.
• USMCA preferential rates — Goods qualifying under the US-Mexico-Canada Agreement may enter duty-free or at reduced rates. Rules of origin must be met and documented.
• GSP (Generalized System of Preferences) — Duty-free treatment for certain products from developing countries. Note: GSP has been expired and reauthorized multiple times; check current status.
• Antidumping and countervailing duties (AD/CVD) — Additional duties on specific products from specific countries found to be sold below fair market value or subsidized by their government. These can add 50% to over 500% in additional duties.

How to Look Up the Tariff Rate for Your Product

Every product imported into the US is classified under a 10-digit Harmonized Tariff Schedule (HTS) code. To find your tariff rate: (1) Go to the USITC HTS website (hts.usitc.gov) or use a tariff lookup tool. (2) Search by product description or browse by chapter. (3) Find the 8- or 10-digit code that matches your product. (4) Read the "General" rate column for the MFN duty rate. (5) Check for any additional duties under Section 301, 232, or AD/CVD orders.

Tariff Trends in 2026

The tariff landscape continues to shift. Section 301 tariffs on Chinese goods have been restructured with higher rates on strategic sectors: 100% on electric vehicles, 50% on semiconductors and solar cells, and 25% on steel, aluminum, EV batteries, and critical minerals. The de minimis threshold (Section 321) for duty-free shipments under $800 is under increased scrutiny, with proposals to eliminate it for countries subject to Section 301 tariffs. Importers should monitor USTR announcements and Federal Register notices for changes that could affect their supply chain costs.

How Camtom Helps with Tariff Management

Managing tariffs across hundreds or thousands of SKUs is time-consuming and error-prone. Camtom's AI-powered tariff classification tool automatically identifies the correct HTS code for your products with 95% accuracy, calculates estimated duties including Section 301 and other special tariffs, and flags potential savings through trade agreements and preferential programs. Instead of spending hours researching codes and rates, you can classify products in seconds and get a clear picture of your landed cost before the goods ship.

Ready to simplify your tariff management? Try Camtom's free tariff lookup tool or schedule a demo to see how AI classification can save your team hours per week.