Tariff Engineering

What is tariff engineering?

Tariff engineering is the practice of modifying a new or existing product so it qualifies for the lowest legal duty rate.

How does tariff engineering work?

Customs authorities set duty rates by tariff classification, and small physical differences can move a product into a different classification. Changing a product's material composition, how it's assembled, or whether it ships complete or in parts can all change which classification applies. Companies make those changes on purpose to land in a lower-duty category.

Is tariff engineering legal?

Yes, when the change to the product is real and the company declares the finished product accurately. It becomes illegal when a company misdescribes goods, misclassifies them on purpose, or splits shipments to hide what the goods are. Classify the product as it actually arrives, keep records of the design change, and ask a licensed customs broker or trade counsel to confirm the classification before the goods ship.

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