Calculation of Duty: What is Customs Duty & How to Calculate the US Import & Customs Duty

Are you a business sending some shipments overseas? Then your shipment may be subject to duties and taxes imposed by the customs officials of the home or destination country. Thus, you must understand everything you know about customs duty before shipping your imports internationally.  

What Is Customs Duty?

What Is Customs Duty

Customs duty is the import tax on any goods or shipments you move across the US customs border from other countries, even though some shipments from other countries are except because of various international trade agreements.

The US customs and Border Protection enforces such customs rules. Remember that customs duties also vary by country and product type. To compute the specific rate date, you must be familiar with the HTS code.

CBP also utilizes an extended version of HS Codes. The minimum threshold for import tax is $800. Goods valued below aren’t subject to the customs duty rate.

Factors Affecting Customs Duty

Factors Affecting Customs Duty

In case you didn’t know yet, customs duties are calculated based on different factors such as:

·        The value of the goods

The shipment’s value is always based on its corresponding market value, even if it is not sold.

·        Free trade agreement

Those agreements between the countries may lessen the import duties.

·        The description of the shipment

Keep in mind that the description puts the goods into categories in which the blanket duty rate could be applied. However, this is also subject to other factors.

·        The end use of goods

It can be either for commercial or personal use.

·        Country of origin

·        Country-specific regulations

How Are Duty Rates Determined?

How Are Duty Rates Determined

To calculate the amount of duty you need to pay that your shipment will also incur, you should determine the rate of duty that applies to the things within it. What’s more, the rate of duty for goods varies on the product types you’re importing. Also, the duty fee for various types of goods will vary depending on the HTS code assigned to them.

Once you find the correct HTS codes for your shipment, you now need to determine the rate of duty owed on goods of that type. Determining duty rates is simple. The duty fee is normally expressed as a percentage of the shipments’ value—but that’s not the case for all goods.

Other products are assigned a flat duty fee per kilogram, like imports such as seeds or vegetables. After you understand the duty rate for the shipment, you can now estimate the total customs charges you must pay for the shipment.

To calculate the import duty for your shipment, you must know the following:

·        The total value of the goods you’re shipping to other countries

·        The good’s rate of duty as defined by their HTS code

To compute the estimated import duty cost for the shipment where the fee is determined by percentage value, multiply the total value of your goods by the fraction that applies to their HTS code.

For instance:

Suppose you like to import different types of chopsticks with a value of $10,000. The duty fee identified by the HTS code is 3.2 percent.

10,000 X 3.2% = 32,0

So, in this example, the duty fee for your business shipment would be $320.

Now, to calculate import duty for a shipment is a flat rate that is calculated base per kilogram, you must multiply the total weight of your shipment in kilograms by the flat rate duty fee per kilogram to get the total.

For instance, you like to import 100 kilograms of cotton seed. You learned that the customs duty fee identified by the HTS code is 47 cents per kilogram.

100 X 0.47 = 47

In that case, your duty fee for the shipment will be $47.

Which Items Are Exempt from Import Duty?

Which Items Are Exempt from Import Duty?

Normally, goods and shipments with a value higher than $800 are subject to import tax and import duty in the United States. Nonetheless, the US import tax threshold applies to particular goods only. Some exemptions could be imported duty-free and not liable for customs tariffs.

For example, you are not liable to pay import tax or the custom duty payable for personal effects such as cameras, jewelry, and clothing. These are not liable for customs taxes and import duties if they’re more than one year old. Furthermore, virtually every item in the household like tools and furniture of the trade may be imported duty-free if they have been used overseas for over a year or aren’t intended for any other person or for sale.

Ecommerce purchases, which are shipped or mailed to the US, are also granted duty-free entry if they’re less than $1,600 and from an insular possession country. The same applies to purchases less than $800 and from an Andean country or Caribbean Basin Initiative country.

How Are US Import Duties and Taxes Calculated?

Import Duties and Taxes Calculated

Two different variables identify whether customs duties and import tax apply:

·        Product – as defined by the HS code

·        Country of import and product

Remember that international freight shipments that are valued under $2,500 aren’t exempt from customs duty.

There’s often confusion between international freight customs duties rules, and other rules have caused that misunderstood impression. These other rules are that shipments valued below $2,5000 are qualified for an informal customs entry and that the customs are less strict when checking international courier or express freight shipments.

Import Duty & Tax from China to USA 2022

Import Duty & Tax from China to USA 2022

As a rule, your product should have an HS code from 9003 to 9006. It will be considered an electronic product and will attract six percent of it for commercial use.

If you are importing clothes made in China with FOB prices exceeding $5,000 per piece, then the import duty rate or customs duty rate would be 27%. You must pay duties plus other charges, including state taxes.

If the gross weight of the particular product is less than ten kilograms per cubic meter, the import duty you need to pay import tax of 5% percent of the CIF value plus insurance and transport costs.


Remember that goods coming from China and imported to America are always subject to import duties and taxes. Customs authority will always check your package, so don’t try to trick them.

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