How to calculate US import duty: formula and example

Title text 'How to calculate US import duty: the formula, the fees and a worked example' over an aerial view of a loaded container ship leaving a busy port

US import duty is the rate in the correct HTSUS line, for the goods’ country of origin, applied to the customs value (or to the quantity, for specific rates). Any additional duties in Chapter 99 of the HTSUS are then calculated on the same value and added, followed by antidumping or countervailing deposits where an order covers the goods. On top of the duties sit two fees on most ocean entries: the merchandise processing fee (MPF, 0.3464 percent of value, held between a minimum and a maximum per entry) and the harbor maintenance fee (HMF, 0.125 percent of value, ocean cargo only). Every number in the calculation comes from a legal source, and each step depends on the one before it.

For one entry line, the arithmetic is:

Component	Calculated on	Source of the rate or amount
Base (ordinary) duty	Customs value, quantity or both	HTSUS Chapters 1–97, column chosen by origin
Chapter 99 additional duties	Usually customs value	HTSUS Chapter 99 (9903 lines) and the proclamation or notice behind each
AD/CVD cash deposit	Value or quantity, per the order	Commerce Department case and rate
MPF	Total value of the formal entry	19 CFR 24.23 and the annual CBP fee notice
HMF	Value of ocean cargo unloaded at a covered port	19 CFR 24.24
Other charges collected at entry, where they apply	Quantity or value, per the program	For example federal excise tax, or the cotton assessment in 7 CFR 1205.510

The steps below follow the order in which the inputs depend on each other.

Step 1: classify the goods

Everything starts with the 10-digit HTSUS number, because the line decides the rate, the rate type (percentage, per unit or both), any Chapter 99 measure that refers to it, and often whether an AD/CVD order applies. The duty rate itself sits at the 8-digit subheading; the last two digits are statistical suffixes that do not change the rate.

Classification follows the General Rules of Interpretation, the Section and Chapter Notes and, as guidance, the WCO Explanatory Notes and CBP rulings. If you are unsure how those fit together, start with the six GRIs explained and the classification errors that most often lead to wrong duty. A wrong heading makes every later number wrong, and no amount of careful arithmetic fixes it.

Step 2: find the right rate column from the origin

The HTSUS rate column has three parts, defined in General Note 3:

Column 1 General is the normal-trade-relations rate for most countries.
Column 1 Special lists preferential rates with program codes in brackets (for example “S” for USMCA, “KR” for the Korea agreement, “AU” for Australia). A special rate applies only if the goods meet that program’s origin rules and the importer claims it on the entry with the program indicator.
Column 2 applies to the small group of countries listed in General Note 3(b).

The country of origin is where the goods were wholly obtained or last substantially transformed, which is not always the country they were shipped from. None of the programs in the Special column is currently open to Indian-origin goods, so they pay column 1 General. The US Generalized System of Preferences (program codes A, A* and A+) covered goods entered up to 31 December 2020 and has not been renewed since (see the dated section below), so those codes in the Special column cannot be claimed.

Step 3: establish the customs value

For most entries the customs value is the transaction value under 19 U.S.C. 1401a: the price actually paid or payable for the goods when sold for export to the United States, plus five statutory additions when they are not already in the price:

Packing costs incurred by the buyer.
Selling commissions incurred by the buyer.
The apportioned value of any assists (moulds, tooling, materials or designs the buyer supplied free or at reduced cost).
Royalties or licence fees the buyer must pay as a condition of the sale.
Resale proceeds that accrue to the seller.

The price excludes costs of international transportation, insurance and related services from the country of exportation to the US. It also excludes post-importation transport and US duties if they are identified separately.

The valuation basis does not change with the Incoterm. What changes is which costs the invoice price contains, and therefore what has to be added or backed out. A CIF invoice needs the actual ocean freight and insurance removed; an ex-works price does not have foreign inland freight added. The explanation of how Incoterms 2020 interact with customs value works through the same shipment under four terms.

If transaction value cannot be used (for example, a related-party price that does not pass the tests, or no sale at all), 1401a sets out the fallback methods in order: transaction value of identical goods, of similar goods, deductive value, computed value, and a derived method. The importer may ask for computed value to be tried before deductive value.

Step 4: apply the base rate

HTSUS rates come in three forms, and the line tells you which one you have.

Type	How it is written	Example (HTSUS line, general rate)	Calculation
Ad valorem	Percentage of value	6302.60.00, cotton terry toilet and kitchen linen: 9.1%	$18,450 × 9.1% = $1,678.95
Specific	Amount per unit	0805.10.00, oranges: 1.9¢/kg	20,000 kg × $0.019 = $380.00
Compound	Per-unit amount plus a percentage	6201.20.11, men’s or boys’ overcoats and similar coats of wool: 41¢/kg + 16.3%	500 kg × $0.41 + $30,000 × 16.3% = $205 + $4,890 = $5,095.00

Specific and compound rates need the quantity in the unit the line names (kilograms, litres, dozens, numbers). Report the quantity in that unit on the entry, even if your commercial invoice counts cartons.

General rates run from Free to well above the 30 percent range people tend to assume. HTSUS 2401.10.65, unstemmed tobacco entered outside the tariff-rate quota, carries a general rate of 350 percent. Specific rates also turn into high ad valorem equivalents when unit prices are low.

Step 5: add Chapter 99 additional duties

Chapter 99 holds the temporary and additional duties that sit on top of the base rate: Section 301 actions, Section 232 duties on steel, aluminium and other sectors, Section 201 safeguards, and others. Each measure has its own 9903 numbers. The scope is written by reference to Chapter 1–97 lines, product descriptions or country of origin, and the US notes to the relevant subchapter of Chapter 99 explain how it applies.

On the entry, the 9903 number is reported on the same line as the Chapter 1–97 number. CBP’s guidance on the order of reporting multiple HTS numbers in ACE puts Chapter 99 numbers before the Chapter 1–97 number, and the entered value is reported against the Chapter 1–97 classification. Each additional duty is normally a percentage of the same customs value as the base duty.

Two rules cause most errors here:

A “Free” base rate does not mean no duty. A product with a free general rate can still owe one or more Chapter 99 duties.
Measures interact. Some exclude goods already covered by another measure (for example, several recent actions do not apply to goods subject to Section 232 duties), and some apply only to part of the value. Read the US note for each 9903 line before you add it.

The way 9903 lines attach to a product’s normal line, and how they stack, needs its own explanation and is covered separately in this series.

Step 6: check for antidumping and countervailing duties

AD/CVD orders are product-and-country specific, set by the Commerce Department, and collected by CBP as cash deposits at entry. They are not in the HTSUS rate columns. An order’s scope is defined by a written product description; HTSUS numbers in the order are given for convenience only. If an order may cover your goods, you report the case number on the entry and deposit at the rate for your producer and exporter. The deposit is an estimate: the final duty is fixed later (through an administrative review if one is requested), and it can be higher or lower.

Step 7: add MPF and HMF

MPF on a formal entry is 0.3464 percent of the value of the merchandise as determined under 1401a (19 CFR 24.23). The result is held between a minimum and a maximum per entry, and those limits are adjusted for inflation every fiscal year from 1 October. Informal entries (generally up to $2,500, but only up to $250 for goods classified in Chapter 99, Subchapters III and IV, under 19 CFR 143.21(a)) pay a flat fee instead. Certain goods are exempt, including goods that qualify as originating under USMCA and under most other US free trade agreements.

HMF is 0.125 percent of the value of commercial cargo unloaded at a covered US port (19 CFR 24.24), based on the same appraised value as the duty. It applies to ocean shipments, not to air or truck entries.

Because MPF works on the whole entry, one large shipment usually pays less MPF per dollar than several small formal entries of the same goods once the value passes the point where the maximum applies.

A worked entry, with the source of every number

The goods: 2,000 bath towels, 100 percent cotton terry, hemmed, made in India, shipped by sea from Chennai to Savannah. The invoice is CIF Savannah.

Classification: heading 63.02 covers bed, table, toilet and kitchen linen. Cotton terry towels fall in subheading 6302.60, and in the US tariff 6302.60.00.20 (towels other than dish towels, category 363). General rate 9.1 percent.

Origin: India, so column 1 General applies. No special program is available.

The invoice, freight and insurance amounts are invented for the example. The rates come from the sources named in the table. The Chapter 99 layer is kept apart from those figures because it is an assumption: suppose one Chapter 99 duty of 10 percent applies to this line. The dated section below records what the HTSUS showed for Indian cotton terry towels when this article was checked.

Line	Amount	Source
Invoice total, CIF Savannah	$19,640.00	Commercial invoice
Less ocean freight (actual, per freight invoice)	−$1,150.00	Carrier invoice
Less marine insurance (actual, per policy)	−$40.00	Insurance certificate
Customs value (transaction value)	$18,450.00	19 U.S.C. 1401a
Base duty at 9.1%	$1,678.95	HTSUS 6302.60.00, column 1 General
MPF at 0.3464% (inside the per-entry min/max)	$63.91	19 CFR 24.23; FY2027 limits below
HMF at 0.125%	$23.06	19 CFR 24.24
Duty and fees before any Chapter 99 duty	$1,765.92
Assumed Chapter 99 duty at 10%	$1,845.00	Hypothetical; see the dated section
Total if the assumed duty applies	$3,610.92

Three checks before filing. The MPF figure of $63.91 sits between the FY2027 minimum and maximum, so the calculated figure is payable; a $5,000 entry would instead pay the minimum. If the same towels came by air, the HMF line would disappear. And cotton towels are cotton-containing goods: the cotton research and promotion assessment in 7 CFR 1205.510 is charged per kilogram on the HTSUS numbers listed in that section’s table, so look up the 10-digit number there and add the charge if it is listed.

With the assumed duty, the total is 19.6 percent of the customs value but only 18.4 percent of the invoice price, because freight and insurance are not dutiable in the US. Comparing duty to the invoice total understates the real rate.

Rates and programs as of October 2026

The mechanism above is stable. The figures in this box change and should be checked against the linked sources on the date of entry.

As of October 2026:

The Supreme Court held on 20 February 2026 that the International Emergency Economic Powers Act does not authorise tariffs (Learning Resources, Inc. v. Trump, No. 24-1287). IEEPA duties were collected on entries up to 24 February 2026. Court of International Trade orders require refunds of those duties with interest, and CBP handles them in ACE through CAPE (Consolidated Administration and Processing of Entries), which opened in phases from 20 April 2026 (CSMS 68340863) and in which filers submit a “CAPE Declaration” listing their entry summaries (CBP notice of 5 October 2026, 91 FR 63299).
A 10 percent import surcharge under Section 122 of the Trade Act of 1974 (Proclamation 11012, 91 FR 9339) applied to goods entered from 24 February 2026 until 12:01 a.m. EDT on 24 July 2026, with exemptions that included goods subject to Section 232 duties and USMCA goods.
USTR’s Section 301 action on forced-labour import prohibitions (91 FR 47318, published 28 July 2026) imposes additional duties of 10 or 12.5 percent on products of 60 economies, for goods entered on or after 12:01 a.m. EDT on 24 July 2026, with product and economy exemptions in its annexes. India is listed at 10 percent and China at 12.5 percent. For some economies the rate is set as a combined figure that includes the ordinary duty. CBP’s implementing guidance is CSMS #69326983 of 23 July 2026.
For the worked example: on 17 October 2026 the HTSUS showed heading 9903.05.44 for products of India at “the duty provided in the applicable subheading + 10%”, except goods covered by exemption headings 9903.05.85 to 9903.05.92. The CBP exemption list issued with that CSMS does not list subheading 6302.60.00, so on that date the 10 percent assumption matched the position for Indian cotton terry towels. Check the HTSUS for the date of your entry before using it.
Section 232 duties and the earlier Section 301 duties on products of China remain in force.
MPF for fiscal year 2027 (from 1 October 2026): 0.3464 percent, minimum $34.58 and maximum $670.86 per formal entry; informal entry MPF $2.77 when filed electronically and not prepared by CBP (CBP Dec. 26-14, 91 FR 48398).
GSP remains expired.

Where duty calculations usually go wrong

Using the country of shipment instead of the country of origin. Goods made in one country and shipped through another keep their origin unless they were substantially transformed in transit.
Treating the invoice total as the customs value on CIF or DDP terms, or deducting estimated freight instead of the actual charges.
Missing additions: a mould paid for by the buyer and sent to the factory is an assist and belongs in value, apportioned across the goods.
Reading only the base rate. A product can have a free base rate and still owe several additional duties.
Applying MPF line by line instead of on the whole entry, or forgetting that the minimum and maximum change every 1 October.
Adding HMF to air shipments.

The cost of getting it wrong runs in both directions. Overpayment is money lost unless it is recovered by a post-summary correction or protest. Underpayment can lead to a demand for the lost duty plus a penalty under 19 U.S.C. 1592; for negligence, the maximum is the lesser of the domestic value of the goods or two times the lost duties, taxes and fees, and for gross negligence four times. These steps are part of the wider compliance mistakes importers make, and the classification evidence behind them belongs in an audit-ready classification file.

Questions people ask

Which date’s rate applies if the rate changes while the goods are at sea?

The rate in effect at the time of entry (19 CFR 141.69). For goods released on entry documents before the entry summary, the time of entry is generally when CBP authorises release; when the entry summary is also the entry, it is when the summary is filed in proper form with estimated duties (19 CFR 141.68). Goods withdrawn from a bonded warehouse take the rate at withdrawal. Measures such as Section 301 actions often add their own in-transit rules, so read the notice.

Is there a US import VAT or sales tax to add?

There is no federal VAT or GST on imports. State sales and use taxes are handled outside the customs entry. Federal excise taxes on some goods, such as alcoholic beverages and tobacco products, are collected at importation and appear on the entry with the duties.

Do other countries calculate duty the same way?

The structure is similar, but the value base differs. India and the EU add international freight and insurance to the value before applying the rate, and both add import VAT or IGST on a value that includes the duty. A rate that looks lower in another tariff can produce a higher amount. How national tariffs diverge beyond the six-digit HS code covers why the same product can sit on different lines in different countries.

If you want a second view on the classification behind a duty calculation, Surajit Roy works on HS and HTS classification questions and can be reached through the contact page.

Sources

This article explains the law and practice in general terms. It is not legal advice on a specific product or shipment; for that, check the current official sources or ask a qualified adviser.