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Duty And Tariffs: What Importers Should Know

Posted by Ascent Global Logistics on May 1, 2018 11:09:08 AM

On July 31, 1789, shortly after the United States became a nation, Congress passed legislation that called for administering customs tariffs and collecting duty to fund the government. Since then, the government has continued to collect duty on imports into the United States. Here is what you need to know about duty:

How Is Duty Currently Calculated?

Duty is currently calculated in several ways based on the tariff used in the Harmonized Tariff System of the United States (HTSUS). The three types of rates of duty on which imported goods can be assessed are ad valorem, specific or compound (mixed).

  • Ad Valorem is calculated as a percentage of the dutiable or customs value of the merchandise. Most tariffs in the HTSUS are calculated with this method.
  • A specific rate of duty is calculated by unit of weight or other measurement, such as so many cents per Kilogram or so many cents per dozen.
  • The third duty type is compound, which is a combination of both an ad valorem rate of duty and a specific rate of duty. An example of this duty type is Ball point pens in Chapter 96, with a 0.8 cent each + 5.4% duty rate. 

Get Help With Your Duty Calculation

Can The President Make Modifications To Duty Rates?

In addition to these types of duty rates, the Trade Expansion Act of 1962 and the Trade Act of 1974 give the President the authority to make modifications to the current duty rates or impose an additional tariff on specific commodities for various reasons. These reasons include importations that threaten to impair the national security or importations from foreign countries that violate trade agreements or engage in unfair trade practices. These additional duties can be in place for days, months or years.

What Tariffs Have Been Enacted In 2018?

On March 23, 2018, a S232 tariff was enacted, adding 25% to steel and 10% to aluminum imports with a temporary exemption granted to imports from Canada, Mexico, Argentina, Australia, Brazil, European Union and South Korea. That exemption was originally scheduled to expire on May 1, 2018; however, a 30 day extension has been granted for these countries. South Korea will receive a continuing extension since imports of steel are now subject to an absolute quote. See CSMS 18-000316 for more details.

Learn More About 2018 Tariffs

An additional announcement was made in early April that 1300 items regularly imported from China are being vetted for additional tariffs, possibly as early as June 2018. These potential tariffs would fall under the S301 tariff act that allows the President to impose tariffs on countries that engage in unfair trade practices.

The potential tariffs would impact the United States' largest trading partner, China. In 2017, China surpassed Canada and Mexico by shipping over $500 billion in goods to the United States, according to the U.S. Census Bureau. 

How Can I Stay Up To Date On Duty And Tariffs?

Continue to look for updates from Ascent Global Logistics regarding these tariff changes over the months ahead.  If you have any questions, please contact us, reach out to your Ascent Global Logistics account manager, monitor the Federal Register or reach out to our International Freight Forwarding Compliance team.

Stay Up to Date On Tariffs