Duty is charged on CIF, not on goods value
Customs assesses duty on the CIF value: cost of goods plus international freight plus insurance. A 10,000 shipment with 1,800 freight and 120 insurance faces duty on 11,920, not 10,000 — a detail that quietly changes landed cost by several percent.
Landed cost is the only number that prices correctly
Landed cost = goods + freight + insurance + duty (+ import VAT/GST + brokerage). Sellers who price from FOB cost routinely discover their 40% margin is actually 25% once freight and duty land.
Getting the rate right
- Duty rates come from the HS code, not the product description
- US tariffs are ad valorem (percentage) but some goods carry specific duties per unit
- Section 301 tariffs can add 7.5–25% on Chinese-origin goods
- De minimis: US allows $800 duty-free per person per day for informal entries
Common mistakes
Under-declaring value to reduce duty is fraud, and the penalty exceeds the saving. Mis-classifying the HS code is the more common honest error — check it with your broker, because a wrong code can mean both overpaying and a compliance risk.
Frequently Asked Questions
What is CIF?
Cost, insurance and freight — the customs valuation basis used by most countries.
Is duty charged on shipping?
Yes; freight and insurance are included in the CIF value.
What is the US de minimis?
$800 per person per day for informal entries, below which no duty is assessed.
Assumptions & disclaimer
Results are estimates for planning. Fee schedules, tax brackets and deduction limits change; confirm current figures with the marketplace, the IRS or a qualified accountant before making decisions. Nothing here is financial, tax or legal advice.
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