What 'tariff' actually means on your invoice
When customs clears your container, they apply a duty rate to the CIF value based on the HTS (Harmonized Tariff Schedule) classification of the goods. The MFN ('most-favored-nation') rate is the baseline. On top of that, Section 301 (China), Section 232 (steel/aluminum), Section 201 (safeguard), and any IEEPA-based reciprocal tariffs stack additively. Anti-dumping and countervailing duties stack on top of all of those. A $10 FOB widget classified at HTS 8517.62 with a 25% MFN + 25% Section 301 lands at roughly $16.50 before broker fees.
- • MFN rate: the base duty from the HTS code (often 0–10%).
- • Section 301: additional China tariff, currently 7.5–100% by list.
- • Reciprocal / IEEPA: executive-order add-ons; volatile, can change month-to-month.
- • AD/CVD: anti-dumping + countervailing for specific products and origins.
Who actually pays — importer, factory, or consumer?
Legally, the importer of record pays U.S. Customs. Economically, the cost gets split. Academic studies of the 2018–2019 China tariffs found roughly 95% was passed to U.S. importers and consumers within months. Suppliers occasionally rebate 5–15% via 'tariff sharing' in tight categories (apparel, accessories) where they can't lose the volume. The rest you either absorb (margin hit), push (price hike), or eliminate (re-source).
Five mitigation moves that actually work
Tariff engineering — reclassifying to a lower-duty HTS, using First Sale for Export valuation, unbundling components, or assembling abroad and entering at a higher line — can legitimately cut duty by 10–60%. Bonded warehouses defer duty until withdrawal. Foreign Trade Zones eliminate duty on re-exported goods entirely. Country-of-origin shifts to Vietnam, Mexico, India, or Thailand sidestep China-specific tariffs but add complexity. Each of these has gotchas — work with a licensed customs broker before redesigning supply chains.
- • Tariff engineering & HTS reclassification
- • First Sale for Export valuation
- • Foreign Trade Zones (FTZ) / bonded warehouses
- • Country-of-origin diversification (Vietnam, Mexico, India)
- • USMCA / GSP / IPEF preferential treatment
Pricing-power math: when to absorb vs. push
If you're in a category with strong brand and low cross-price elasticity (premium beauty, specialty tools), pushing the full tariff into MSRP typically loses <5% of volume and preserves dollar margin. In commodity categories (cables, generic electronics, basic apparel), pushing >8% usually triggers a 15–25% volume drop. The break-even rule of thumb: if your demand elasticity is greater than (1 / Gross Margin %), absorb; if less, push. Always test in one channel before a system-wide reprice.
FAQ
Are tariffs the same as VAT or sales tax?
No. Tariffs are import duties paid at the border by the importer to U.S. Customs. VAT (used in most non-U.S. markets) is a consumption tax collected at each stage. Sales tax is a state-level consumption tax. A product can be hit by all three.
How do I find my exact HTS code?
Search at hts.usitc.gov by product name. The 10-digit code determines your MFN duty rate. For ambiguous products, request a binding ruling from CBP (free, takes 30–60 days) — this protects you from reclassification disputes later.
Do small shipments avoid tariffs?
Shipments under $800 entered as de minimis used to clear duty-free, but 2025–2026 rule changes have closed this loophole for China-origin goods. Commercial importers should never rely on de minimis as a tariff strategy.
Can I get a refund if I re-export?
Yes — drawback claims refund up to 99% of duties paid on goods that are subsequently exported, destroyed under customs supervision, or used to manufacture exported products. Drawback has a 5-year filing window but is paperwork-heavy; specialized brokers handle this for ~10–15% of recovered duty.
How fast can tariff rates change?
IEEPA and reciprocal tariffs can be added or modified by executive order with as little as 7 days' notice. Section 301 changes go through a USTR comment period (45–90 days). Build a 90-day pricing scenario for any China-sourced SKU.
Does this calculator include state sales tax?
No — it stops at the landed-cost / wholesale level. Sales tax is collected separately at retail. Use our sales-tax calculators for state-level retail math.
What's First Sale for Export?
A valuation method where duty is assessed on the price the factory charged the middleman, not the price the U.S. importer paid the middleman. Can cut duty by 10–25% when there's a multi-tier supply chain and proper documentation.
Why is my freight cost so variable?
Container rates swing 3–5x with seasonal demand. Lock 12-month service contracts via a freight forwarder if you ship >50 TEU/year; otherwise use spot rates and budget conservatively at the high end of the recent 12-month range.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last reviewed
July 2026. We re-check every figure on the platform on a rolling quarterly cycle.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.