Overview

With recent tariff announcements constantly evolving, importers face increased pressure to properly allocate duty and tariff costs into their inventory valuation.

For example, if an item costs $6.00 per piece and is imported from a country like China, your final landed cost per piece could jump to $14.70 due to a 145% tariff (as of the time of writing).

To further complicate things, different items have varying duty and tariff rates depending on their HTS (Harmonized Tariff Schedule) Code. These rates are calculated specifically for each type of imported good. Additionally, duty and tariff calculations can sometimes depend on the quantity of units imported. For instance, if you import 100 pieces, the tariff might include an extra $0.10 per unit.

Common Mistakes

Often, companies rely on customs brokers to handle and pay duties and tariffs on their behalf. The importer then pays the broker based on the invoice received. However, HTS codes assigned by the broker or even customs officials aren’t always accurate. Often times, they will charge you more than what’s really owed.

When errors occur, the importer may need to file a claim with customs or their broker. But to do so effectively, they must know exactly which items are affected and what portion of the charges apply to the tariff and duties.

Solution

With our Freight Container app, we’ve introduced a way for users to allocate tariff and duty costs, even for items that were not received through a container using the app. This helps ensure accurate cost allocation regardless of how the items were processed.

Here’s a quick video that explains how to allocate the tariff and duty when you’re receiving the goods without creating the freight containers: