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Our free import duty calculator provides an import duty estimate for goods shipped from China to the U.S. Final rates are determined by customs authorities.

What is a customs duty?

Customs duty, or import duty, is a tax paid for goods that are transported across international borders. This tariff is paid at the time of import by the importer of record, which can be the owner or purchaser of goods, or a party with a financial interest in the cargo, such as the seller. The type of commodity imported and country of origin factor into the duty assessment.

Some countries and goods are exempt from duties due to trade agreements, but all goods must be declared. If a duty is due, failure to pay can result in criminal penalties and seizure of goods.

How are duty rates determined?

All goods that exist can be found in the Harmonized Tariff Schedule (HTS), a global system of nomenclature that is accepted by all member countries of the World Trade Organization (WTO). Each HTS code has a corresponding duty rate that may be zero. Typically, the rate is a percentage of the imported value, a per-piece rate, or a per-pound rate. U.S. HTS codes are ten digits, and the first six numbers are the global or harmonized numbers.

U.S. Customs and Border Protection (CBP), the largest federal law enforcement agency of the U.S. Department of Homeland Security, clears goods and enforces customs laws. CBP assesses duties based on factors including the country of origin and the transaction value of goods, which are both declared by the importer of record on the entry declaration.

Some countries, due to mutually agreed upon trade agreements, such as the North American Free Trade Agreement (NAFTA), have lower or zero import duties.

How do goods pass through customs?

Before any shipment leaves origin, a manifest declaration must be filed. Airlines, shipping lines, or the freight forwarder submit shipment details to CBP via its Automated Manifest System (AMS). In addition, for ocean shipments, an Importer Security Filing (ISF) must be accepted at least 24 hours prior to departure.

Prior to arrival, but no later than 15 days after arrival, an entry declaration must be filed by the Importer of Record or their elected customs broker. When declaring goods, importers need to provide a bill of lading (BOL or B/L) and a commercial invoice and packing list. The commercial invoice should declare the price paid, or to be paid, for the goods within the shipment. And this invoice should be the same invoice that the importer paid, or will pay, the vendor for the goods.

Ideally, shipments will preclear customs before they arrive in the U.S., making it possible to pick up cargo as soon as the carrier makes it available. Ocean shipments can be prefiled five days prior to vessel arrival; air shipments can be prefiled upon plane departure from the foreign country.

All goods are subject to inspection and are not legally released until they pass said inspection. If customs selects cargo for inspection, delays and additional fees can occur.

Related: Here’s What to Expect From Customs Exams

What are the types of customs holds and customs exams?

When customs requires additional information or decides to inspect a shipment, it will be placed on hold. Customs does not disclose information on the reasoning behind selecting a given shipment for inspection. However, first-time importers are inspected at a higher rate than importers with established shipping records, and factors such as country of origin and commodity type can increase the odds that a shipment is selected.

These are some of the customs holds and/or exams:

Manifest holds
arise when there are issues with data on the carrier manifest, or with the Importer Security Filing.
Partner Government Agencies (PGA) holds
are placed to ensure shipments when one of the agencies that regulate imports (e.g., FDA, USDA, CPSC) instructs CBP to hold cargo to ensure it complies with regulations.
Commercial Enforcement holds
occur when there are issues under customs regulations or any of the agencies responsible for regulating the entry of goods into the U.S. (e.g. FDA, USDA, CPSC, FCC).
Statistical Validation holds
are placed due to discrepancies in declared data and established data for a given commodity. Examples of such data include value and weight.
Contraband Enforcement Team (CET) holds
are placed by the Anti-Terrorism Contraband Enforcement Team (A-TCET) when there is a threat that the commodity is illicit contraband, drugs, guns, or currency.
X-Ray exams
, also known as a Non-Intrusive Inspection (NII) or a Vehicle and Cargo Inspection System (VACIS) exam, occur when CBP orders that a container be passed through an X-ray machine at the port. Cargo that passes the exam is immediately released. Cargo that doesn’t pass the exam is escalated to one of the following two inspections.
Tailgate exams
require physical inspection of goods by the customs officer at the port. If there are no issues, cargo is released immediately. If issues occur, cargo is escalated to an intensive exam.
Intensive exams
require that cargo be transported to a third-party Customs Exam Site (CES). An associate separates each set of parcels, opens designated boxes, and prepares the shipment for a Customs officer to visually inspect cargo and potentially take samples.

For everything from estimating customs duties to country of origin labeling requirements, check our Help Center for your Ultimate Guide to Customs and Compliance.