Import & Customs Glossary
Plain-English definitions of the terms that decide what an import really costs — from HS codes and customs value to Section 301, MPF, CBAM and the EU's new €3 parcel duty. Updated .
Landed cost & pricing
- Landed costalso: total landed cost
- Landed cost is the total cost of getting a product to your warehouse: purchase price + international freight + insurance + customs duty + additional tariffs + customs and broker fees + inland delivery. Divided by units shipped, it gives landed cost per unit — the figure to use for pricing and supplier comparison. Landed cost formula, step by step →
- Incotermsalso: Incoterms 2020
- Incoterms are the International Chamber of Commerce's standard trade terms (current edition: Incoterms 2020) that define which party pays for and bears the risk of each leg of a shipment — from the seller's premises to the buyer's door. How Incoterms change landed cost →
- EXW (Ex Works)also: ex-factory price, ex works
- EXW (Ex Works) is the Incoterm under which the seller only makes the goods available at its own premises; the buyer pays and arranges everything else, including export clearance, freight, insurance, import duty and delivery. EXW to landed cost formula →
- FOB (Free On Board)
- FOB (Free On Board) is the Incoterm under which the seller delivers the goods loaded on board the vessel at the named port of shipment; the buyer pays ocean freight, insurance, import duty and all later costs. An FOB price is therefore not a landed cost. FOB vs landed cost, worked example →
- CIF (Cost, Insurance and Freight)
- CIF is the Incoterm under which the seller pays the cost of the goods, freight and minimum insurance to the named destination port, while risk passes to the buyer once the goods are on board at origin. The EU values imports for duty on a CIF basis. How CIF value drives EU duty →
- DDP (Delivered Duty Paid)
- DDP is the Incoterm under which the seller delivers the goods to the buyer's named place, cleared for import with duties and taxes paid — the seller carries every cost and risk up to delivery. LDP vs DDP explained →
- LDP (Landed Duty Paid)
- LDP (Landed Duty Paid) is a commercial pricing term — not an official Incoterm — meaning the supplier's price includes goods, freight, duty, clearance and delivery. It usually works like DDP, but its exact scope is whatever the contract says. What LDP covers →
Classification & valuation
- HS codealso: Harmonized System code, tariff code
- An HS code is the 6-digit product classification from the World Customs Organization's Harmonized System, used by more than 200 countries. Countries add digits for their own tariffs: 10 digits in the US (HTSUS) and 8–10 in the EU (CN/TARIC). How to find your HS code →
- HTS code (HTSUS)also: Harmonized Tariff Schedule of the United States
- An HTS code is the 10-digit US classification in the Harmonized Tariff Schedule of the United States, published by the USITC. The first 8 digits set the duty rate; the last 2 are statistical suffixes. Classify to 10 digits →
- Customs valuealso: dutiable value, entered value
- Customs value is the amount ad valorem duty is charged on. In the US it is normally the transaction value excluding international freight and insurance (an FOB-type basis); in the EU it includes transport and insurance to the EU border (a CIF basis). US vs EU customs value →
- Ad valorem duty
- An ad valorem duty is a customs duty charged as a percentage of the customs value — for example 4% of a $10,000 entry is $400. Other duties are specific (per unit, kilo or litre) or compound (both).
- MFN duty ratealso: general rate, column 1 general, erga omnes rate
- The MFN (most-favoured-nation) rate is the standard duty a country applies to imports from WTO members that do not qualify for a preference. It is the 'general' rate in the US HTS and the 'third country duty' in EU TARIC.
- First sale rule
- The first sale rule lets a US importer declare customs value using the price of an earlier sale in the chain — typically factory to middleman — when that sale is a bona fide sale for export to the US, lowering the base that duty is charged on.
- Tariff engineering
- Tariff engineering is legally designing or modifying a product before import so it falls under a classification with a lower duty rate. It is lawful when the product genuinely changes; misdescribing goods is not.
US tariffs, fees & entry
- Section 301 tariffs
- Section 301 tariffs are additional US duties imposed under Section 301 of the Trade Act of 1974. On Chinese goods they run 7.5% (List 4A) to 25% (Lists 1–3), and up to 100% on specific products such as EVs; since 24 July 2026 separate forced-labor Section 301 duties of 10% or 12.5% also apply to goods from 60 economies. Check your Section 301 status →
- Section 232 tariffs
- Section 232 tariffs are US national-security duties. Since 6 April 2026 they apply to the full customs value: 50% on steel, aluminum and most copper articles, 25% on most derivative products, with articles under 15% metal by weight excluded. Section 232 in 2026 →
- IEEPA tariffsalso: reciprocal tariffs, fentanyl tariffs
- IEEPA tariffs were the 2025 'fentanyl' and 'reciprocal' duties imposed under the International Emergency Economic Powers Act. The Supreme Court ruled them unlawful on 20 February 2026 (Learning Resources v. Trump); importers of record claim refunds through CBP's CAPE process. How IEEPA refunds work →
- AD/CVD (antidumping and countervailing duties)also: anti-dumping duty, countervailing duty
- Antidumping and countervailing duties are case-specific duties on particular products from particular countries, set by Commerce Department orders to offset dumping or subsidies. Rates are exporter-specific, can exceed 100%, and require a cash deposit at entry.
- Chapter 99 (HTSUS)
- Chapter 99 of the HTSUS lists temporary duty modifications — including Section 301 and Section 232 additional duties and their exclusions (9903 numbers). These are reported on the entry alongside the product's regular HTS code.
- Importer of record (IOR)
- The importer of record is the party legally responsible for a customs entry: classifying the goods, declaring their value and paying duties, tariffs and fees. It is also the party that receives duty refunds. Who pays import tariffs →
- MPF (Merchandise Processing Fee)
- The Merchandise Processing Fee is a CBP user fee of 0.3464% of the value of a formal entry, subject to a minimum and maximum: $33.58–$651.50 in fiscal year 2026 and $34.58–$670.86 from 1 October 2026 (FY2027). Originating goods under USMCA and most US FTAs are exempt. MPF & HMF explained →
- HMF (Harbor Maintenance Fee)
- The Harbor Maintenance Fee is 0.125% of the value of commercial cargo imported by vessel through US ports. It has no cap and does not apply to air or land shipments. HMF examples →
- Formal entryalso: informal entry
- A formal entry is the full US customs entry (with a customs bond) required for commercial shipments valued over $2,500 and for certain goods regardless of value. Lower-value shipments may use an informal entry with a flat MPF.
- Customs bond
- A customs bond is a surety guarantee to CBP that the importer will pay duties, taxes and penalties. It is required for formal entries and is bought either per shipment (single-entry) or annually (continuous bond).
- De minimis (Section 321)
- De minimis was the US duty-free exemption for shipments worth $800 or less. It has been suspended for all countries since 29 August 2025, made indefinite by CBP rules in June–July 2026, and is repealed by statute from 1 July 2027.
- Duty drawback
- Duty drawback is a US refund of up to 99% of duties, taxes and fees paid on imported goods that are later exported or destroyed, or on imports substituted by exported goods.
- Foreign-Trade Zone (FTZ)
- A Foreign-Trade Zone is a CBP-supervised area in the US where goods can be stored, processed or assembled with duty deferred until they enter US commerce — and not owed at all on goods re-exported.
Trade agreements & origin
- Free trade agreement (FTA)
- A free trade agreement cuts or removes duties on goods that originate in the partner countries. The preference is only available when the goods meet the agreement's rules of origin and the claim is documented.
- Rules of origin
- Rules of origin are the product-specific tests — such as a change in tariff classification or a minimum regional value content — that decide whether goods 'originate' in an FTA partner and qualify for its preferential duty rate.
- USMCAalso: CUSMA, T-MEC
- USMCA is the United States–Mexico–Canada Agreement, in force since 1 July 2020. Goods that meet its rules of origin enter duty-free and are exempt from the MPF and from the 2026 forced-labor Section 301 duties; non-qualifying Mexican and Canadian goods pay 10% under that action. USMCA qualification →
- GSP and EBA (EU)also: Generalised Scheme of Preferences, Everything But Arms
- The EU's Generalised Scheme of Preferences reduces or removes duties on imports from developing countries; its Everything But Arms (EBA) arrangement gives least-developed countries duty-free, quota-free access for all goods except arms and ammunition.
- Country of origin
- Country of origin is where goods were wholly obtained or last substantially transformed. It — not the shipping route or seller's location — decides which tariffs, trade-remedy duties and preferences apply.
EU customs, VAT & CBAM
- TARIC
- TARIC is the European Commission's integrated tariff database. It shows the third-country (MFN) duty, preferential rates, anti-dumping duties, quotas and other EU measures for each 10-digit TARIC code. Using TARIC for duty →
- CN codealso: Combined Nomenclature
- A CN code is the EU's 8-digit Combined Nomenclature classification, built on the 6-digit HS code. TARIC adds two more digits for EU-specific measures.
- EORI number
- An EORI (Economic Operators Registration and Identification) number is the identifier every business needs to lodge customs declarations in the EU.
- Import VAT (EU)
- Import VAT is charged when goods enter the EU at the member state's standard rate. Its base is the customs value plus duty plus incidental costs to the first destination in that country; VAT-registered businesses normally recover it. EU duty & VAT calculation →
- IOSS (Import One-Stop Shop)
- IOSS is the EU scheme that lets sellers collect import VAT at checkout on consignments worth €150 or less and declare it monthly in one member state, so parcels clear without VAT being charged at the border. IOSS and the €3 duty →
- EU €3 low-value consignment duty
- Since 1 July 2026 the EU charges a flat €3 customs duty per item (per tariff classification) in consignments worth €150 or less, replacing the old customs duty exemption. It is a transitional measure until 1 July 2028. The €3 duty explained →
- CBAM (Carbon Border Adjustment Mechanism)
- CBAM is the EU charge on the embedded carbon emissions of imported iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. Its definitive period began on 1 January 2026; certificates for 2026 imports are bought from February 2027 and surrendered by 30 September 2027. CBAM in 2026 →
Shipping & logistics charges
- Demurrage
- Demurrage is the daily charge for leaving a loaded container at the port terminal beyond its free time. Rates are tiered and rise the longer the container stays. Demurrage rates by day →
- Detention
- Detention is the daily charge a carrier bills for keeping its container equipment outside the terminal — for example at your warehouse — beyond the agreed free time. Demurrage vs detention →
- Transit time
- Transit time is the number of days goods spend moving from origin to destination. Longer transit ties up working capital and raises inventory carrying cost, which is why it belongs in a supplier-country comparison.
Put the terms to work
Rank 20+ supplier countries by full landed cost — duty, tariffs, fees and freight — in about 30 seconds.