Import Duties and Tariffs Explained: The Complete Beginner's Guide for 2026
By Jason Kim · Branch Manager · 15 years in freight forwarding · Los Angeles · Frankfurt · Chicago
I have spent 15 years in international freight forwarding, managing shipments across Los Angeles, Frankfurt, and Chicago. In that time, I have watched new importers make the same tariff mistakes over and over — not because they were careless, but because nobody ever explained the system clearly before they committed to their first purchase order.
This guide fixes that. By the time you finish reading, you will understand exactly how US import tariffs work, how to find your duty rate before you place an order, and what the current tariff landscape in 2026 means for your specific situation.
What Is an Import Tariff?
An import tariff — also called a customs duty — is a tax collected by the US government on goods entering the United States from a foreign country. It is collected by US Customs and Border Protection at the time of importation and is paid by the importer of record — you.
Tariffs serve two purposes. The first is revenue — the US government collects billions of dollars annually through import duties. The second is trade policy — tariffs can be used to protect domestic industries, respond to unfair trade practices by foreign governments, or apply pressure in trade negotiations.
For you as an importer, the purpose behind a particular tariff matters less than its practical effect: it increases the cost of your goods and must be included in your landed cost calculation from day one.
How the US Tariff System Works — The HTS Code
Every product imported into the United States is classified under a specific code in the Harmonized Tariff Schedule of the United States — known as the HTS. This is a 10-digit number that determines your duty rate, your eligibility for trade program benefits, and whether your goods are subject to any special tariffs or import restrictions.
The HTS is organized hierarchically. The first two digits identify the chapter — a broad product category. The first four digits identify the heading. The first six digits are the internationally standardized Harmonized System code, used by customs authorities in most countries around the world. The final four digits are specific to the United States and provide additional product specificity.
Here is a simple example. Stainless steel kitchen spoons fall under HTS 7323.93.00.80. Breaking that down:
Chapter 73 covers articles of iron or steel. Heading 7323 covers table, kitchen, or household articles of iron or steel. The six-digit HS code 7323.93 covers stainless steel articles specifically. The full 10-digit US HTS number adds further specificity for the US tariff schedule.
Your duty rate is attached to that 10-digit number. Finding the correct HTS code for your product is the single most important step in understanding your tariff exposure.
How to Find Your HTS Code
There are three ways to find your HTS code as a new importer.
The first is the official USITC HTS database at hts.usitc.gov. This is the authoritative source — maintained by the US International Trade Commission — and is free to search. You can browse by chapter or search by keyword. The database includes the duty rate, any applicable special rates under free trade agreements, and notes explaining how each code applies.
The second is CBP's CROSS ruling database at cbp.gov/cross. This is a searchable database of binding rulings issued by CBP in response to classification questions from importers and brokers. If someone has previously asked CBP to classify a product similar to yours, you can find the ruling and use it as a reference. CROSS rulings are authoritative — if a ruling exists for your product, it is the strongest classification guidance available short of obtaining your own binding ruling.
The third is a licensed customs broker. For new importers, I strongly recommend getting a professional classification opinion on your key products before you place your first order. A classification error that goes undetected across multiple shipments can create significant retroactive duty liability. The cost of a professional classification review — typically $150 to $300 per product — is insurance against a much larger problem.
The Three Layers of US Tariffs You Need to Know in 2026
This is where the US tariff system becomes more complex than most beginners expect. In 2026, importing into the United States is not just about one duty rate. For many products — especially those manufactured in China — there are multiple layers of tariffs that stack on top of each other. Understanding all three layers is essential before you commit to any sourcing decision.
Layer 1 — Most Favored Nation (MFN) Duty Rate
The MFN rate is the baseline tariff that applies to imports from all countries with which the United States has normal trade relations — which includes most countries in the world. This rate is set by Congress through the trade schedules and changes infrequently.
MFN rates vary enormously by product. Many industrial goods and raw materials enter duty-free at a 0% MFN rate. Consumer goods typically carry rates of 3% to 15%. Certain sensitive product categories — textiles, footwear, some agricultural products — can carry MFN rates of 20% or higher.
For most countries of origin other than China, your duty calculation starts and ends with the MFN rate — plus any applicable trade program benefits, which I will cover below.
Layer 2 — Section 301 Tariffs on Chinese Goods
Section 301 tariffs are additional duties imposed specifically on goods manufactured in China, authorized under Section 301 of the Trade Act of 1974 in response to findings of unfair trade practices by the Chinese government. These tariffs were first imposed in 2018 and have been maintained, modified, and expanded through multiple administrations.
In 2026, Section 301 tariffs apply in four lists — commonly called List 1, List 2, List 3, and List 4A — covering the vast majority of products imported from China. The rates vary by list: 25% on List 1, 2, and 3 products, and 7.5% on List 4A products.
These rates are applied on top of your MFN rate — they do not replace it. A product with a 5% MFN rate and a 25% Section 301 tariff faces a combined duty rate of 30% of its customs value. On a $10,000 shipment, that is $3,000 in duties before you account for any other fees.
Layer 3 — IEEPA Tariffs
In early 2025, the United States imposed additional tariffs on Chinese goods under the International Emergency Economic Powers Act — known as IEEPA. These tariffs were imposed by executive order and created significant additional duty exposure on Chinese-origin goods beyond the Section 301 rates already in place.
The IEEPA tariff situation has been fluid throughout 2025 and into 2026. Rates were initially imposed at very high levels, then partially reduced through a temporary framework agreement. The specific rates applicable to your product on your entry date depend on the current status of these executive actions, which I strongly recommend verifying with your customs broker before placing any order from China.
The practical implication for new importers is significant: if you are sourcing from China in 2026, your total tariff exposure — MFN plus Section 301 plus any applicable IEEPA tariffs — may be substantially higher than what a quick HTS lookup suggests. The HTS database shows your MFN rate. It does not automatically show your Section 301 exposure or your current IEEPA rate. You need to check all three layers separately.
Free Trade Agreements — How to Pay Less
Not all imports face MFN rates. The United States has free trade agreements with 20 countries that provide preferential — often zero — duty rates for qualifying goods. If your product is manufactured in a country with which the US has a free trade agreement, and it meets the agreement's rules of origin, you may qualify for a significantly reduced duty rate.
The most important free trade agreement for importers sourcing from North America is the United States-Mexico-Canada Agreement — USMCA. Goods manufactured in Mexico or Canada that meet USMCA rules of origin generally enter the United States duty-free, regardless of what the MFN rate would otherwise be. For importers considering nearshoring their supply chain, the USMCA duty benefit is one of the most compelling financial arguments.
Other significant US free trade agreements include KORUS with South Korea, the US-Australia FTA, and agreements with Singapore, Chile, and several Central American countries. A full list is available through the Office of the United States Trade Representative at ustr.gov.
To claim free trade agreement benefits, you need to ensure your supplier provides the correct certificate of origin or origin certification documentation. The format and requirements vary by agreement. Getting this documentation wrong means your FTA claim is invalid and you pay the full MFN rate — retroactively if CBP discovers the error.
How Customs Value Is Calculated — What You Actually Owe Duty On
Your duty is calculated as a percentage of your customs value — not your selling price, not your retail price, and not what you charge your customers. Your customs value under US law is determined using the transaction value method — essentially the price you actually paid or agreed to pay your supplier for the goods.
For FOB-priced goods, the customs value is generally your FOB invoice price. For goods priced on other Incoterms, additional costs may or may not be included in the dutiable value depending on the terms. Your customs broker will calculate this correctly, but understanding the principle helps you avoid surprises.
Assists — value provided by the importer to the supplier free of charge or at reduced cost that assists in the production of the imported goods, such as tooling, molds, or engineering drawings — must be included in the customs value even if they are not on the commercial invoice. This is one of the most commonly missed elements of customs valuation for new importers.
Other Fees You Owe CBP Beyond the Duty
Customs duty is the largest fee, but it is not the only one. Every formal entry into the United States incurs two additional mandatory fees.
The Merchandise Processing Fee — MPF — is assessed at 0.3464% of the customs value of the goods, with a minimum of $31.67 and a maximum of $614.35 per entry. For a $50,000 shipment, the MPF is $173.20. For a $200,000 shipment, it is capped at $614.35.
The Harbor Maintenance Tax — HMT — is assessed at 0.125% of the cargo value for ocean shipments arriving at US ports. It does not apply to air freight or land border entries. On a $50,000 ocean shipment, the HMT is $62.50.
These fees are small relative to your duty on high-tariff products, but they apply to every entry regardless of duty rate. Include them in every landed cost calculation from day one.
The De Minimis Exemption — When You Owe Nothing
Not every import is subject to duty. The United States maintains a de minimis threshold — the value below which goods may enter duty-free and without a formal customs entry. As of 2026, the US de minimis threshold is $800 per shipment per person per day.
If the total value of your imported goods in a single shipment does not exceed $800, they may enter duty-free under Section 321 of the Tariff Act. This is why express courier shipments from overseas retailers — packages from international e-commerce sites, for example — often enter the US without duty assessment.
There are important limitations. De minimis does not apply to goods subject to other agency requirements — FDA-regulated products, CPSC-regulated consumer goods, and similar categories still require proper documentation and may require formal entry regardless of value. And certain product categories and country-of-origin combinations have faced de minimis restrictions through recent executive actions. Verify current de minimis rules with your customs broker before assuming a low-value shipment will clear without duty.
Building Your Duty Cost Into Your Business Model
The most common mistake new importers make with tariffs is treating them as an afterthought — a cost they will calculate after they have already negotiated their supplier price and committed to a retail price. By the time they discover their actual duty exposure, their margin is already gone.
The correct sequence is the reverse. Before you finalize your supplier price, know your HTS code. Before you know your HTS code, know your country of origin. Before you commit to a country of origin, check all three tariff layers that apply. Build the full duty cost — MFN plus Section 301 plus any additional tariffs — into your landed cost calculation before you agree to anything.
A product that looks profitable at $8.00 FOB from China can become unprofitable at $11.50 landed once you add a 27.5% combined duty rate, ocean freight, customs brokerage, and inland freight to your Chicago warehouse. I have seen this realization hit importers after they have already placed a $50,000 purchase order. That is not a calculation error. It is a planning failure — and it is entirely preventable.
Where to Go Next
If you are just starting your import journey, the five most important steps you can take right now are these.
First, identify the HTS code for every product you intend to import. Do not guess — verify it against the USITC database and, if there is any ambiguity, get a professional opinion.
Second, calculate your full duty exposure — all three layers — for every product sourced from China. Do not stop at the MFN rate.
Third, check whether your country of origin qualifies for any free trade agreement benefits. If you are sourcing from Mexico or Canada, USMCA is almost certainly worth claiming.
Fourth, include all CBP fees — MPF, HMT, and customs brokerage — in your landed cost calculation. Not just the duty.
Fifth, talk to a licensed customs broker before your first shipment. One hour of professional guidance at the beginning saves far more than one hour of problem-solving after a CBP hold.
The US tariff system is complex but learnable. Once you understand how the layers work, how the HTS functions, and how to build duty into your cost model from the beginning, you will import with a confidence and clarity that most new importers take years to develop.