US Customs Duty Rates Explained: How Import Tariffs Work

What Determines Your Import Duty Rate?

When a shipment enters the United States, US Customs and Border Protection (CBP) assesses duties based on two things: what the product is (its HTS code) and where it came from (its country of origin). The HTS code determines which row of the tariff schedule applies. The country of origin determines which rate column applies within that row.

The legal authority for US import duties comes from Congress, but the actual rates are set through a combination of legislation (such as the Trade Act of 1974 and the Trade Expansion Act of 1962) and executive action under laws like Section 301 of the Trade Act and the International Emergency Economic Powers Act (IEEPA). This layered structure is why your effective duty rate today is almost never just the number you find in the base HTS schedule.

The HTS Rate Columns: General, Special, and Column 2

Every HTS subheading has three rate columns in the official USITC tariff schedule:

For almost every importer, the relevant rate is either the General (MFN) rate or a Special rate if you're importing from a free-trade-agreement country. Column 2 rates are historically very high and rarely encountered in practice.

MFN (Most Favored Nation) Rates

MFN stands for Most Favored Nation, now officially called Normal Trade Relations (NTR) in US law. Despite the name, MFN is not a preferential rate — it's the standard rate that applies to imports from virtually every country in the world. The term originated from GATT/WTO rules that require member countries to apply the same duty rate to all other members.

MFN rates for the US range from 0% (duty-free, common for products the US doesn't produce domestically) to over 30% for certain sensitive industries like tobacco, peanuts, and some textiles. The average MFN rate across all HTS subheadings is roughly 3.4%, but this average is misleading — the actual rate for your product category matters enormously.

The Three Types of Duty Rates

Ad valorem duties

The most common type. Expressed as a percentage of the customs value. If you import $10,000 worth of goods with a 5% ad valorem rate, you owe $500. The customs value is typically the transaction value — the price you actually paid — adjusted for certain additions (assists, royalties, selling commissions) and deductions.

Specific duties

Expressed as a fixed dollar amount per unit of measure — per kilogram, per liter, per piece, etc. Example: $0.05/kg. Specific duties are common for agricultural products, chemicals, and some textiles. They do not scale with the price of the goods, which means they are a larger burden on cheap goods and a smaller burden on premium goods.

Compound duties

A combination of an ad valorem and a specific component. For example: “12.5% + $0.30/kg.” You calculate both components and add them together. Compound duties are common in food and beverage categories.

How Duty Rates Vary Across Product Categories

The US tariff schedule is not uniform. Rates reflect a combination of historical trade negotiations, domestic industry protections, and WTO commitments. Some patterns to know:

These MFN rates are only the starting point for China-origin goods — Section 301 and IEEPA tariffs add substantially on top. See our guide to China to US tariffs in 2026 for the full stack.

Special Rates: Free Trade Agreement Preferences

If your goods originate in a country with which the US has a free trade agreement, you may qualify for a reduced or zero duty rate under that agreement. The Special rate column in the HTS shows the available preferential rates along with the letter code for each program.

To claim a preferential rate, you must have a valid certificate or declaration of origin (requirements vary by agreement) and the goods must meet the relevant rules of origin for that agreement. USMCA, for example, requires goods to meet specific regional value content and tariff shift requirements.

How to Read the HTS Duty Rate Column

When you look up a rate in the USITC tariff schedule, the General column entry might show:

• Free — 0% duty
• 3.7% — 3.7% ad valorem
• $0.068/kg — specific rate per kilogram
• 6.3% + $0.25/kg — compound rate
• See note X — rate depends on a tariff-rate quota (TRQ) or other condition

The Special column will show rate codes like “Free (CA, MX, AU...)” indicating which programs offer duty-free treatment. If you're importing from a non-FTA country, ignore the Special column — the General rate applies.

Additional Duty Programs That Layer on Top

The MFN rate in the HTS is rarely your total duty burden. Several additional tariff programs may apply:

• Section 301: Additional duties of 7.5–25% on Chinese-origin goods across Lists 1–4A
• IEEPA reciprocal tariffs: Additional duties imposed by executive order in 2025 on goods from China and other countries — rates have fluctuated significantly
• Section 232: Additional duties on steel (25%) and aluminum (10%) imports, applying to goods from most countries
• Antidumping (AD) / Countervailing (CVD) duties: Product- and country-specific duties imposed when CBP finds dumping or foreign subsidies; can be very high (sometimes 200%+)

When building your landed cost model, the correct starting point is: MFN rate + Section 301 (if applicable) + IEEPA (if applicable) + any AD/CVD orders on your specific product and origin. Use our free HTS lookup to get the MFN rate and Section 301 status for any product instantly.

Customs Value: What You're Paying a Percentage Of

For ad valorem duties, the duty is calculated as a percentage of the customs value, not the retail price. The customs value is typically the transaction value — the price actually paid for the goods. But CBP adds certain items that are sometimes excluded from invoices:

• Packing costs paid by the buyer
• Selling commissions paid by the buyer
• Assists — materials, tooling, or design work provided free or at reduced cost by the buyer to the manufacturer
• Royalties and license fees related to the goods
• Proceeds of any resale that accrue to the seller

Freight and insurance from origin to the US port of entry are generally not included in the customs value for US imports (unlike some other countries that use CIF value). The US uses FOB (free on board) value at the port of export as the basis for customs value.

Merchandise Processing Fee and Harbor Maintenance Fee

Beyond duty, most formal entries are also subject to:

• Merchandise Processing Fee (MPF): 0.3464% of the entered value, with a minimum of $32.71 and maximum of $634.62 per entry. This applies to virtually all commercial imports.
• Harbor Maintenance Fee (HMF): 0.125% of the value of cargo loaded at US seaports. Applies to ocean shipments only, not air cargo.

For detailed formulas including MPF and HMF, see our complete import duty calculator guide.