Estimated reading time: 9 minutes
If you want to import from China and sell on Amazon or retail stores, then you need to understand both the taxes on imported goods and U.S. tariffs.
By reading this article, you will learn how to calculate step-by-step import tariffs from China to the US and when importing from China or other low-cost Southeast Asian countries. Additionally, I will share a free import duty calculator, as well as the US agencies involved in customs clearance. This will help you when importing products from China.
Let’s go and explore:
How are U.S. tariffs levied? What is the Tariff Calculation Formula?
(1) Article 321: Act 321 refers to the bill that adjusted the minimum tariff threshold from $200- $ 800 to facilitate trade during Obama’s administration. )
(2) Free of Duty: No taxes/No import fees
(3) Informal: Informal Customs Clearance
(4) Formal: Formal Customs Declaration
(5) Dutiable: Customs duties
(6) MPF: Merchandise Processing fee
Now you have a basic idea about the situation when you are charged by the customs duties/customs tax and when it’s free of tax.
1. U.S. Tariffs Levy (Declaration Value)
Declaration Value:
(1) Under $800: Free of Tax
(2) Between $800-2500: Informal customs clearance and only need to pay the customs duties
(3) The value above $2500: It’s applies for formal customs clearance. You need to pay both the customs duties and MPF.
2. Tariff Calculation Formula
What would be the tariff calculation formula? See below.
MPF Calculate Formula: Declaration Value x MPF Rate(usually the rate is 0.3464%, $26.79 as the minimum and $ 519.76 the maximum).
How to Calculate the Import Tax when Shipping from China to the US?
1. Check the HTS Code/Customs Tariff Code
The first step is accessing the Harmonized Tariff Schedule and checking the HTS code to find out the tariff rate for the specific product/category.
Let’s have an example of a golf umbrella:
(Assume the unit price FOB SHENZHEN 5.00, Order 3000PCS from China factory and total value $15000.00)
We type “umbrella” at the search bar and comes out of the search result below:
You will see different HTS codes in the search result(left bar), so you need to check the description to see which might fit best for your nitch.
In this case, the HTS Code starts with 6601 as highlighted, which might be a good one for the golf umbrella, so we would click it to have a detailed view.
Please take note that the HTS code in China Customs might be different from what you found in the Harmonized Tariff Schedule.
But the first six digital numbers are the same.
2. Find out the Tariffs Rate
You can see from the above image that the product (gardon umbrella/similar umbrella) tariff rate is 6.5% according to the official site. If it’s a foldable umbrella, then it’s free of import tax.
3. Check if the product included within the 25% Tariffs List is a MUST.
You also need to check if the umbrella is on the list of 25% tariffs(China Products) imposed by the US government during the trade war. It’s essential to check and make sure you are getting the correct US Customs duty rates.
Here you will notice the symbol “I” which means the product is in the 25% tariffs list, and you need to check the updated details (remember the tariffs schedule is not stable these days).
It indicates” see 9903.88.16.” when you place the mouse cursor over the symbol (without clicking). Hold for a second, then you will see it.
The next step is to type HTS Code “9903.88.16.” in the search bar to see the additional tariff rates.
For umbrellas: it says the US customs import tariffs rate(for the product of China) is 15% more when importing from China to the USA.
But did you notice there is a “2” symbol on the right side of “15%”? What does that mean?
Due to the negotiation between these two governments (China and the U.S.), both sides agreed and signed the first phase tariff agreement, which suspended or lowered the tariff rate for specific categories. Thus, in this case, you can see the updated info when you place the mouse on this symbol “2”: it says 9903.88.16. are suspended, which means there are no extra tariffs for the umbrella.
Now we finalized the research of the primary customs duties of the golf umbrella, which is 6.5%, and there are no other tariffs imposed on this product.
Calculate the customs duty by using the declared value and multiply the tariff rate.
The umbrella order as an example:
Tariffs rate: 6.5%
Declared value” $ 15000.00
The primary customs duty/duty fee for 3000pcs golf umbrella imported from China to the USA: 15000*0.065= $975.00
The Customs Duty Calculator Free Tool (Import Tax Calculator)
You can also use the free U.S. import duty calculator when calculating the import duty and tax.
The customs duty calculator free tool: Simple Duty. The duties calculator is only for reference when checking the US duty rates.
Other Cost when Importing from China: MPF
Now you know how to get the HTS Code and calculate the US import duties. Are there other taxes/fees you need to pay when importing from China?
Here is an example: MPF.
What is MPF: It refers to the Merchandise Processing Fee.
On August 1, 2019, US Customs and Border Protection (CBP) announced in a Federal Register Notice (FRN) changes to various fees, including the Merchandise Processing Fee (MPF), within the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985.
In the FRN, CBP states that the MPF ad valorem rate of 0.3464% will not change, but that the minimum and maximum values for formal entries will change to $26.79 and $519.76, respectively. The changes are scheduled to take effect on October 1, 2019.
Still, use the umbrella case for your reference.
MPF= $15000 x 0.3464%= $51.96
So if you are going to import 3000pcs golf umbrellas from China to the US, then the total customs duty(import tax from China) is $975.00+$51.96= $1026.96
The tip is to always check with your brokers when importing products from the overseas market so they know the best way to find the accurate tariff rate.
For sure, you can check by yourself, but remember the U.S. Customs would determine the final tariff rate for specific items imported from China or other countries.
PS: If you want to check if the target product is anti-dumping or countervailing, you can use this link for verification.
A. Landed Cost
Why landed cost is so vital for the import and export business? Because the landed cost covers all the expenses that happened in your specific shipment when importing goods.
The landed costs consist of the value of the original China item, agent service fee(inspection or sourcing agent, it depends), all brokerage, shipping, and logistic costs(internationally and domestically), insurance, US Customs tariffs/Customs charges, taxes, and other handling fees.
B. Cost of Item (BY EXW/FOB TERM)
Incoterms: Click here for details about different international trade terms.
EXW, FOB, CIF, CFR, FCA, DPU, DAP
C. Agent Fee (Inspection/Sourcing)
Exclude the agent fee if you are not going to assign a goods inspection or use the China sourcing agent service.
Add on the costs if you want to conduct goods inspection by a third party or sourcing agents before shipping from China to the US.
- Customs Brokerage（Customs Clearance）
The reference standard rate for Customs Clearance is around $100-$120 for clearance with CBP.
- Shipping/Logistics Costs
It can be shipped by air freight, air courier(DHL, UPS, FedEx), or sea shipping when importing goods from China.
You can learn more by reading my article on finding the best solution for shipping from China to the US.
- Insurance
If you are buying from Chinese vendors under the term CIF, then the price should include insurance for your goods.
D. Customs Duty/Import Tax
Custom duty means the actual amount of money paid by the importer or exporter on the imported/exported product. There is a difference between the Customs duty and Tariffs. The tariffs refer to the tariff rate under harmonized tariff system codes (HTS). Every imported product has a referral HTS code, and this is how US Customs determines what tariff rate should be charged on specific products.
Above all the most critical part consists of the landed cost.
E. Tariffs/Import Tax Rate for Other Countries: Useful Links
Above all are the critical steps about how to find the US import tax HTS code and the related tariffs to calculate the U.S. import duty. Now we are providing more useful links for other global buyers to check the customs duties when importing from China or other low-cost countries. It would help you to find out the goods import charges/duty rates to your country.
- Canada
- Switzerland
- South Korea
- Pakistan
- Norway
- New Zealand
- Australia
- EU
- India
- Japan
- Malaysia
- Mexican Imports
US Agencies Involved in Customs Clearance
1) FDA: Food and Drug Administration: www.fda.gov
Food and Drug Administration: The FDA is authorized by the United States Congress, and the federal government, and is the highest law enforcement agency specializing in food and drug management. It is also a dedicated team of professionals, including doctors, lawyers, microbiologists, chemists, and statisticians. The government’s sanitation control agency protects and improves national health.
All the medical supplies like face masks and gowns imported to the USA need to with the FDA certificate as below: (for reference only)
To get the supplier’s FDA certificate is not enough, you need to verify if the FDA certificate is workable by checking on the authority site. (FDA).
Click the URL and verify it by this link.
I would suggest typing the supplier’s name/owner name or the operator number to see if the vendor registered on FDA what their product covers and other detailed info.
Here is the result after we type the operator number：
By doing that, you can check if the certificate you received is workable or not before moving to the next step when importing from China.
2) FWS: www.fws.gov
The United States Fish and Wildlife Service: (English: United States Fish and Wildlife Service; abbreviation: USFWS or FWS) is a federal government agency affiliated with the United States Department of the Interior, which mainly manages fish, wildlife, and natural habitats.
The responsibilities of this agency are: “For the benefit of the American people, cooperate with other people or agencies to preserve, protect and improve fish, wild animals, plants and their habitats.”
3) DOT: www.dot.gov
United States Transportation Administration: The Department Of Transportation, is mainly responsible for the supervision of auto parts products.
4) AFT: www.aft.gov
Tobacco and Alcohol Supervision Bureau: mainly supervises tobacco, alcohol, explosives, and other related products
5) FCC: www.aft.gov
F.C.C. (Federal Communications Commission), is an independent government agency, directly responsible to the U.S. Congress
6) EPA: www.epa.gov
U.S. Environmental Protection Agency, its main task is to protect human health and the natural environment.
Chemical products (such as ink, chalk, etc. containing chemical materials) are required to submit a TSCA non-toxic statement.
7) USDA: www.usda.gov
Department Of Agriculture
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Final Thoughts
It’s critical to know how to calculate the customs tariff duties and the import process when buying from wholesale markets worldwide. I hope you would get the ideas about how to check the HTS code and find the related tariff rate/duty rates step by step after reading the post.
If you want to import products from China to the US, it will be of great benefit to you to understand Import Tariffs from China to the US.
Of course, you can check another article on how to buy from China.
Please share with us if you would have any comments.
