Question 1

What does Dutiable mean?

Accepted Answer

Dutiable means subject to customs duty. When goods are described as dutiable, the importer must pay a tariff to the customs authority before the goods are released. A good is dutiable unless it falls under an exemption — most commonly the de minimis threshold (US $800, EU €150 for duty, UK £135 for duty), a free-trade-agreement preference (e.g. USMCA, UK-EU TCA, CPTPP), a duty suspension or quota, or diplomatic relief. 'Dutiable value' is the value used to calculate the duty — transaction value plus freight and insurance (CIF) in the EU and UK, or transaction value (FOB) in the US. 'Dutiable articles' are the goods themselves; 'dutiability' is the property of being subject to duty.

Question 2

What does HS Code (Harmonized System Code) mean?

Accepted Answer

An HS code (Harmonized System code) is a standardized 6-digit number used worldwide to classify traded goods. It is maintained by the World Customs Organization (WCO) and used by over 200 countries as the base of their national tariff schedules. The first 2 digits are the chapter, digits 3-4 the heading, and digits 5-6 the subheading. Countries then extend the code: the EU uses 8-digit CN codes, the US uses 10-digit HTS codes, and the UK uses 10-digit commodity codes.

Question 3

What does Tariff Code by Country & Language mean?

Accepted Answer

The tariff classification code is known by different names in different countries and languages, but the first 6 digits are always identical worldwide under the World Customs Organization Harmonized System. Common names include: Tariffnummer / Zolltarifnummer / Warennummer (Germany, Austria, Switzerland — 11 digits), code tarifaire / nomenclature combinée (France — 8-digit CN), partida arancelaria / clasificación arancelaria / código arancelario (Spain and Latin America — 8 to 10 digits depending on country), tariefnummer / douanetarief (Netherlands, Belgium — 8-digit CN, 10-digit TARIC), codice doganale / nomenclatura combinata (Italy — 8 to 10 digits), kod taryfy celnej (Poland — 8-digit CN), código pautal (Portugal, Brazil — 8 to 10 digits), kod TN VED / код ТН ВЭД (Russia, Belarus, Kazakhstan — 10-digit Eurasian Economic Union code), 海关编码 (China — 10-digit HS), 関税番号 (Japan — 9-digit), tarifna številka (Slovenia — 8 to 10 digits CN/TARIC). All correspond to the same 6-digit WCO HS at the international level.

Question 4

What does HTS Code mean?

Accepted Answer

An HTS code (Harmonized Tariff Schedule code) is the 10-digit US-specific extension of the international HS code. It is maintained by the US International Trade Commission (USITC) and used by US Customs and Border Protection (CBP) to determine import duties, Section 301 tariffs, quotas, and trade statistics. The first 6 digits of an HTS code are always identical to the corresponding HS code. The extra 4 digits are added to set specific US rates and track trade flows.

Question 5

What does CN Code (Combined Nomenclature) mean?

Accepted Answer

A CN code (Combined Nomenclature code) is the 8-digit product classification code used by the European Union for customs duties, import declarations, and Intrastat statistics. It extends the 6-digit international HS code maintained by the World Customs Organization with two additional digits to set EU-specific rates and reporting categories. The full 10-digit code used in import declarations is the TARIC code, which adds two further digits to the CN code for EU-specific measures (suspensions, anti-dumping duties, quotas). CN is the EU equivalent of the US HTS or UK commodity code. The CN is updated annually by the European Commission and published in the Official Journal as Regulation (EEC) No 2658/87 amendments.

Question 6

What does MFN Duty (Most-Favoured-Nation) mean?

Accepted Answer

MFN duty (Most-Favoured-Nation duty) is the standard tariff rate that a WTO member applies to imports from all other WTO members unless a preferential trade agreement provides a lower rate. Despite the name, it does not grant favour to any specific country — it is the baseline, non-discriminatory rate. Lower preferential rates may apply under free-trade agreements (e.g., CETA, USMCA, UK-EU TCA) if the importer provides proof of origin.

Question 7

What does Country of Origin mean?

Accepted Answer

Country of origin is the country where a product was substantially manufactured or underwent its last substantial transformation. It is not simply the country of shipment. Origin determines which tariffs apply (e.g., Section 301 for China-origin goods, anti-dumping measures, preferential rates under free-trade agreements). Two common rules are used: the 'wholly obtained' test for raw materials, and 'substantial transformation' tests based on tariff-shift, regional-value-content, or specific processing rules.

Question 8

What does Rules of Origin mean?

Accepted Answer

Rules of origin are the specific criteria used by customs authorities to determine where a product originates for the purpose of applying preferential tariff treatment under a free-trade agreement. Each agreement (CETA, USMCA, UK-EU TCA, etc.) sets its own product-specific rules of origin, usually based on tariff shift, regional value content (RVC), or specified manufacturing processes. To claim a preferential rate, the importer must obtain proof of origin — typically an EUR.1 certificate, USMCA certification, or declaration of origin — and keep it on file.

Question 9

What does USMCA (United States–Mexico–Canada Agreement) mean?

Accepted Answer

USMCA (United States–Mexico–Canada Agreement) is the free-trade agreement that replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020. It allows duty-free trade among the three member countries for goods that satisfy USMCA's product-specific rules of origin. Compared to NAFTA, USMCA tightened the rules of origin for automotive (raising Regional Value Content from 62.5% to 75% for passenger vehicles, adding a new 70% steel/aluminum content requirement, and introducing the Labour Value Content test of 40–45% wages above $16/hour). USMCA is also called CUSMA in Canada and T-MEC in Mexico. The agreement is reviewed every six years; the first joint review in 2026 is the most consequential trade-policy event in the region this decade.

Question 10

What does Customs Value mean?

Accepted Answer

Customs value (also called dutiable value) is the value used as the basis for calculating customs duty. In most jurisdictions it is the transaction value — the price actually paid or payable for the goods — plus adjustments. The EU and UK use the CIF value (transaction value plus insurance and freight to the point of entry). The US generally uses the FOB value (transaction value at the port of export). If the transaction value cannot be used (e.g. related-party sales), customs may apply alternative methods such as deductive or computed value.

Question 11

What does De Minimis mean?

Accepted Answer

De minimis is the shipment-value threshold below which a country does not charge customs duty. The US Section 321 de minimis is $800 — below that, goods enter duty-free with an informal entry. The EU's duty de minimis is €150 (but VAT applies from the first euro). The UK's duty de minimis is £135. The levels change periodically; for example, US de minimis for China-origin goods has been the subject of policy changes in 2025-2026. De minimis does not cover prohibited or restricted goods, which require formal entry regardless of value.

Question 12

What does Section 321 (US De Minimis) mean?

Accepted Answer

Section 321 of the US Tariff Act of 1930 (19 USC §1321) is the statutory basis for the $800 de minimis import exemption. Under Section 321, articles with a fair retail value of $800 or less in the country of shipment may enter the United States duty-free, without formal entry, and without payment of federal taxes. The threshold has been $800 since 2016 (raised from $200). As of May 2, 2025, goods of Chinese and Hong Kong origin are excluded from Section 321 treatment by executive order — those shipments now require formal or informal entry with full duty, Section 301, and IEEPA tariffs from the first dollar. Section 321 remains in effect for goods originating in all other countries. Section 321 entries are typically filed as Type 86 entries by licensed brokers or under the Entry Type 11 informal entry process.

Question 13

What does Landed Cost mean?

Accepted Answer

Landed cost is the total per-unit cost of a product delivered to its destination. It includes the purchase price, international freight, insurance, customs duty, import VAT or sales tax, customs-broker fees, local delivery, and any handling charges. Calculating landed cost accurately is critical for setting retail prices, since hidden duty and freight costs can turn a profitable SKU into a loss-making one.

Question 14

What does Incoterms mean?

Accepted Answer

Incoterms (International Commercial Terms) are the 11 standard three-letter shipping terms published by the International Chamber of Commerce. The current edition is Incoterms 2020. They define the division of cost and risk between seller and buyer in an international shipment: who pays for export clearance, freight, insurance, import clearance, and import duty, and at which point risk transfers from seller to buyer. Common terms include EXW (Ex Works — buyer does everything), FOB (Free On Board — seller delivers to named port), DAP (Delivered at Place — seller delivers to buyer's location without customs), and DDP (Delivered Duty Paid — seller handles everything including import duty).

Question 15

What does General Rules of Interpretation (GRI) mean?

Accepted Answer

The General Rules of Interpretation (GRI) are the six legal rules that govern classification of products under the Harmonized System. Customs officers must apply them in numerical order. GRI 1 says that classification is determined by the text of the headings and notes. GRI 2 covers unfinished or unassembled goods. GRI 3 resolves products that could fall under multiple headings (essential character, most specific description, or last-in-numerical-order). GRI 4 applies when no heading fits (use the most akin heading). GRI 5 covers packaging. GRI 6 extends the rules to subheadings. The GRIs are legally binding text of the Harmonized System Convention.

Question 16

What does Tariff mean?

Accepted Answer

A tariff is a government tax on imported goods, occasionally applied to exports. Most tariffs are ad valorem — a percentage of the customs value — but they can also be specific (a fixed amount per kilogram, litre, or unit) or compound (both ad valorem and specific). Tariffs are listed in each country's national tariff schedule, cross-referenced by HS code. Tariff rates vary by country, by product, and by trading relationship: the MFN rate is the default, while preferential rates under free-trade agreements are lower.

Question 17

What does Import Duty mean?

Accepted Answer

Import duty is a tax levied by a country's customs authority on goods imported across its border. The duty rate is determined by the product's HS code and the country of origin. In most cases, the duty is calculated as a percentage of the customs value: in the EU and UK that is the CIF value (cost + insurance + freight to the port of entry), and in the US it is the FOB value (transaction value at the port of export). Import duty is separate from VAT, sales tax, excise duty, and broker fees, all of which may also apply at the border. The standard rate is the MFN (Most-Favoured-Nation) rate; lower preferential rates apply if a free-trade agreement covers the trade and rules of origin are met. Import duty is paid by the importer of record before customs releases the shipment.

Question 18

What does Section 301 Tariffs mean?

Accepted Answer

Section 301 tariffs are additional US duties on Chinese-origin goods, imposed under Section 301 of the Trade Act of 1974 after the USTR's 2018 investigation into China's intellectual-property practices. They are separate from and stack on top of the standard MFN duty. Originally applied in four lists (Lists 1-4A) with rates between 7.5% and 25%, the rates have been modified multiple times; selected products on the 2024-2025 EV and semiconductor lists now carry rates up to 100%. Section 301 duties apply based on country of origin, not country of shipment — transshipment through a third country does not avoid them.

Question 19

What does Section 232 Tariffs mean?

Accepted Answer

Section 232 tariffs are additional US duties imposed on imports that the President, on the recommendation of the Secretary of Commerce, determines to threaten US national security. The legal basis is Section 232 of the Trade Expansion Act of 1962. As of 2026, active Section 232 measures cover steel and aluminum (25% and 10% respectively, raised to 25% in 2025), imported passenger vehicles and covered auto parts (25%), and selected steel/aluminum derivatives. Section 232 tariffs stack on top of the MFN duty and apply by country of origin, not country of shipment. Some country-specific exemptions and quotas exist (e.g., the EU and UK have negotiated quota arrangements on steel). Section 232 is distinct from Section 301 (China-specific, IP-related) and from IEEPA tariffs (general emergency authority).

Question 20

What does IEEPA Tariffs mean?

Accepted Answer

IEEPA tariffs are additional US import duties imposed by the President under the International Emergency Economic Powers Act of 1977 (50 USC §1701 et seq.) following a declaration of national emergency. The IEEPA authority has been used as a general-purpose tariff lever since 2025, including the February 2025 tariffs on Canada, Mexico, and China linked to fentanyl trafficking, the April 2025 reciprocal tariffs on most US trading partners, and subsequent country-specific orders. IEEPA tariffs stack on top of the MFN duty rate, Section 301 surcharges, Section 232 measures, and any anti-dumping or countervailing duties. They apply by country of origin, are subject to executive modification at any time, and have been the subject of pending litigation in the US courts. Verify the current rate and scope via the latest Federal Register notice and CBP CSMS messages before pricing any shipment.

Question 21

What does Anti-Dumping Duty mean?

Accepted Answer

Anti-dumping duty (ADD) is an additional customs duty imposed by an importing country when it determines that imported goods are being sold at less than their fair market value — i.e., 'dumped' — and causing injury to domestic producers. ADD is applied via a formal anti-dumping investigation, which results in a published order listing specific products, specific exporting countries, and specific ADD rates per exporter. ADD stacks on top of the MFN duty and any other tariffs. Rates vary widely, from single-digit percentages to several hundred percent.

Question 22

What does CBAM (EU Carbon Border Adjustment Mechanism) mean?

Accepted Answer

CBAM (Carbon Border Adjustment Mechanism) is the EU's system for pricing the embedded carbon emissions of certain imports. It covers cement, iron and steel, aluminium, fertilizers, electricity, and hydrogen. Since October 2023, EU importers have been required to report the embedded emissions of covered imports quarterly (transitional phase). From 1 January 2026, importers must purchase CBAM certificates corresponding to those emissions, effectively equalising the carbon price paid by EU and non-EU producers. CBAM does not apply to EU-origin goods or to imports from countries in the EU ETS (EEA/EFTA, Switzerland).

Customs & Trade Glossary

Dutiable

HS Code (Harmonized System Code)

Tariff Code by Country & Language

HTS Code

CN Code (Combined Nomenclature)

MFN Duty (Most-Favoured-Nation)

Country of Origin

Rules of Origin

USMCA (United States–Mexico–Canada Agreement)

Customs Value

De Minimis

Section 321 (US De Minimis)

Landed Cost

Incoterms

General Rules of Interpretation (GRI)

Tariff

Import Duty

Section 301 Tariffs

Section 232 Tariffs

IEEPA Tariffs

Anti-Dumping Duty

CBAM (EU Carbon Border Adjustment Mechanism)

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