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Understanding how to calculate duties and tariffs is essential for businesses involved in cross-border shipping. These costs directly impact your bottom line and can be the difference between profitability and unexpected expenses. This guide provides a step-by-step breakdown to help you accurately estimate duties and tariffs when shipping goods across borders.

Step 1: Identify the Correct HTS Code

The Harmonized Tariff Schedule (HTS) code is a classification system that determines the duty rate for your product. Make sure you use the correct code—errors can lead to delays, penalties, or overpaying duties.

Step 2: Determine the Country of Origin

The country of origin affects the duty rate due to free trade agreements like USMCA. Products from Mexico or Canada might qualify for reduced or zero tariffs under this agreement.

Step 3: Calculate the Customs Value

This is typically the transaction value or the amount paid for the goods. Additional charges like shipping, insurance, and handling may or may not be included depending on the country’s regulations.

Step 4: Apply the Duty Rate

Once you know the HTS code and customs value, multiply them by the applicable duty rate. For example, a product with a 5% duty rate and a $10,000 customs value would incur $500 in duties.

Step 5: Include Additional Taxes or Fees

Some countries impose additional charges such as VAT, excise taxes, or customs processing fees. Make sure these are factored into your landed cost calculation.

Bonus Tip: Use a Customs Broker or Freight Forwarder

Experts like Novic Logistics can help ensure that you’re applying the correct codes, taking advantage of trade agreements, and minimizing unnecessary costs. We provide full support with customs clearance and duty estimation so your shipments move smoothly and cost-effectively.

Don’t let duties and tariffs catch you off guard. Work with a trusted logistics partner like Novic Logistics to navigate international shipping confidently and compliantly.