What is a tariff?
A tariff, also called an import duty or customs duty, is a tax on goods when they are imported. The rate depends on three things: the product’s tariff classification (its HS code), its country of origin, and whether a trade agreement or special measure applies.
Core principle: Classification × value × origin = duty. Get any of the three wrong and your landed cost is wrong.
How tariffs are calculated
| Type | How it works | Example |
|---|---|---|
| Ad valorem | Percentage of the customs value | 12% of €10,000 = €1,200 |
| Specific | Fixed amount per unit | €2 per kilogram |
| Compound | Both combined | 5% + €1 per item |
The customs value is not always the invoice price. The EU uses a CIF basis, including freight and insurance to the EU border, while the US generally uses the transaction value excluding international freight.
Measures on top of standard rates
Anti-dumping duties
What it is: Imposed when goods are exported at unfairly low prices.
Why it matters: Can add very high rates to specific products from specific countries.
Countervailing duties
What it is: Offset foreign government subsidies.
Why it matters: Often imposed alongside anti-dumping duties.
Safeguards and policy tariffs
What it is: Temporary measures against import surges, or tariffs for policy reasons such as the additional duties the US has introduced since 2025.
Why it matters: Rates can change at short notice, so check current schedules before you ship.
Lowering your tariff bill legally
- Use trade agreement preferences when goods meet the rules of origin
- Confirm classification with Binding Tariff Information in the EU, or a binding ruling in the US
- Defer duty with a bonded warehouse or Foreign Trade Zone
- Consider where goods are finished, as origin follows substantial transformation, confirmed in the EU with Binding Origin Information
Example: Since 1 July 2026, the EU charges a flat €3 per item on low-value parcels from outside the EU (temporarily, until 2028). A brand that ships 10,000 single-item orders from Asia now pays €30,000 more than before, which can make bulk import into an EU fulfilment warehouse cheaper.
Frequently asked questions
Is a tariff the same as VAT?
No. A tariff is a customs duty on imports. VAT, or sales tax, is a separate consumption tax, although import VAT is often collected at the same time.
Where can I find EU tariff rates?
In TARIC, the European Commission’s integrated tariff database. US rates are in the Harmonized Tariff Schedule.
Who pays the tariff?
The importer of record pays it to customs, although the cost is often shared through pricing or Incoterms such as DDP.
EU tariff database: TARIC (European Commission).
