For the past few weeks, I have had several people seeking answers to basic tariff questions, and even the new AI Overview does not necessarily provide answers.
The importer of record pays the tariff at the time the goods enter the country.
The individual buyer will be responsible for paying any applicable tariffs at the time of delivery, depending on the item’s declared value and customs regulations (e.g., the U.S. de minimis threshold of $800).
For example, you buy a collectable GI Joe with the king fu grip from a store in Australia for $500. Under “de minimise” rules, there would be no tariff on that purchase. If you bought a package with the GI Joe and assorted clothing and gear for $1,000 then you would have to pay the tariff rate for the category it is in.
The individual buyer will be responsible for paying any applicable tariff at the time of delivery, depending on the item’s value and customs regulations (e.g., the U.S. de minimis threshold of $800).
This applies primarily to shipments for personal use, such as when you purchase a product from a foreign website. The de minimis threshold is the value limit under which goods can enter a country without paying import duties or taxes. If the declared value of an imported item is $800 or less, it usually enters duty-free under Section 321 of the Tariff Act. Note each country has a differnet rate for imports into their country.
If the item’s value is over $800, depending on how it is shipped, the package may be held by customs until you or your shipping company pays the tariff or taxes. Most e-commerce stores software will indicate if there is a tariff or additional taxes at time of purchase. In some cases with FedEx or UPS they will notify you to pay them so they can pay on your behalf.
Tariffs are typically calculated as a percentage of the declared value of the goods.
The percentage (tariff rate) is determined by the product’s Harmonized Tariff Schedule (HTS) code.
Example: A 25% tariff on a $200 unit = $50 duty per unit.
The price used to calculate the tariff is the “declared value” of the item(s). This value comes from price/value listed on a commercial invoice issues by your supplier. If you import widgets for resale, your manufacturer will sell them to you at a wholesale cost – that is the price you paid for them. It is NOT based on your retail or additive price you sell them to the end consumer.
Tariffs are paid at the time of import, when the goods clear customs at the port of entry.