Duty Watch
A sharp read on tariffs, classification, and filings that hit landed cost.
Classification — “Parts” vs. “Accessories” is driving duty swings.
CBP reviews continue to zero-in on importers calling finished subassemblies “parts.” If an item adds functionality on its own—or isn’t dedicated solely or principally to one machine—expect a re-route to a higher-duty heading. Tighten your essential-character analysis and keep tech specs, exploded views, and use-case evidence in the file.
Tariffs — Small wording, big rate.
HTS phrases like “with/without” power supply, “corded/cordless,” or “for retail sale” routinely flip rates. A one-line change in materials composition or surface treatment can move you from duty-free to double-digit. Re-test top movers each quarter; don’t let legacy codes outrun current construction.
Section 301 & 232 — Assumptions are expensive.
China 301 and steel/aluminum measures still distort costs for everyday SKUs. Validate origin claims (especially for multi-country builds) and make sure any exclusion or TRQ treatment you rely on is documented—not just “what we’ve always done.” If your BOM or supplier changed, your duty position likely did too.
Valuation — Royalties, assists, and “free” tooling aren’t free.
Engineering, molds, firmware, and design work furnished to the supplier can be dutiable assists. Royalty/license payments that are a condition of sale also draw CBP attention. Sync with finance and engineering so these costs are captured before entry, not during an audit.
ISF (10+2) — Penalties remain low-frequency, high-pain.
Late or inaccurate ISFs continue to trigger liquidated damages. Typical pitfalls: placeholder HTS never updated, wrong seller/buyer parties, and late consolidator changes not pushed to the filer. Lock upstream data earlier and version-control corrections.
AES — Routed transactions need paper, not vibes.
When the foreign principal party directs the export, get written authorization, spell out who supplies which data elements, and track how the ITN returns to the records. Scrub ECCN/licenses before the truck moves—post-departure fixes are audit bait.
What smart teams do this week (5 quick hits):
Re-classify your top 25 SKUs against current specs; document essential character and principal use.
Sample last month’s entries for dutiable charges (royalties, assists, packing) and adjust broker instructions.
Re-validate any 301/232 reliefs or TRQs with current supplier origin and mill certs.
Run an ISF vs. final entry reconciliation; fix data handoffs with forwarders.
For routed exports, refresh AES authorizations and ITN return flows.
Editor’s note: Informational only, not legal advice. For a second look, TradeReady can run an HTS Expert Review or a Duty Explainer on a target SKU, plus AES/ISF spot checks where filings drive risk.
Primary sources:
CBP: Section 301 Trade Remedies — FAQs. U.S. Customs and Border Protection
eCFR: 19 CFR §152.103 — Transaction value (assists, royalties, dutiable charges). eCFR
CBP: HTSUS 9801.00.10 — U.S. goods returned guidance & documentation. U.S. Customs and B9801/9802 — Documentation makes (or breaks) duty relief.
U.S. goods returned (9801) and articles assembled/advanced abroad (9802) can slash duty, but only with clean proof of export, cost breakdowns, and no non-qualifying advances in value. Build checklists with your suppliers now; retrofits rarely satisfy CBP.
