US Tariffs on Chinese Goods: HS Codes, Section 301 and Calculating True Landed Cost
The number on the factory quotation is not what the product costs you. What it costs is the quotation, plus freight, plus duties — and since 2025, duties on China-origin goods are a stack of several layers that have changed repeatedly. Buyers who build landed cost on last year’s numbers keep discovering the difference at the port, where it is too late to renegotiate.
This guide explains the stack in the order it hits your invoice: classification, the tariff layers on China-origin goods, the end of duty-free small parcels, and the customs-value decisions that quietly change everything.
First, classification: the 10-digit HTS code decides everything
Every product entering the United States is classified under the Harmonized Tariff Schedule, down to a 10-digit HTS code. That code — not the product name, not the material description on the quotation — determines the duty rate that applies.
Similar-looking products can fall under different codes with very different rates. A plastic kitchen utensil and a plastic bathroom organizer may look like neighbours and classify worlds apart. Classification errors are among the most common and most expensive customs mistakes: they surface months later as billbacks or penalties.
Practical discipline: get the HTS code in writing before you calculate landed cost, verify it yourself in the public HTS database, and for borderline cases look at prior rulings in the Customs Rulings Online Search System (CROSS) or ask your broker about a binding ruling. A ruling obtained before the first shipment is cheap insurance.
The tariff stack on China-origin goods
The duty you actually pay on a product from China is the sum of several layers:
- MFN base duty — the normal rate that applies to the HTS code regardless of origin.
- Section 301 — additional duties on China-origin goods from the trade-remedy investigations, historically 7.5% to 25% across the four lists, with exclusions that have expired and been renewed over the years.
- Additional 2025 measures — executive-order tariffs imposed and then adjusted several times during 2025, layered on top of everything above.
The total for any given product has therefore changed multiple times, sometimes by letter of instruction between orders. Two habits keep you safe: check the current rate for your exact HTS code when you budget the order, and check it again before the goods ship. Our compliance checklist folds this into the pre-order routine.
De minimis is gone — small parcels now pay too
For years, parcels worth $800 or less entered the US duty-free under the de minimis exemption, which shaped entire business models built on shipping small direct parcels from China to US customers. That channel closed: duty-free de minimis treatment ended for China and Hong Kong shipments on 2 May 2025, and the elimination extended worldwide on 29 August 2025. US Customs reported collecting over $1 billion in duties on low-value shipments within months.
If your model depends on many small direct parcels, the landed cost per unit now includes duties that did not exist before — and the old advantage of splitting a container into direct parcels may have reversed. Consolidating into bulk shipments and clearing customs properly is usually the better arithmetic now, which is also how our consolidation service is structured.
Customs value: what the duty is calculated on
Duties are charged on the customs value of the goods. For most imports that is the transaction value — the price actually paid for the merchandise — and it includes certain costs that buyers often forget: assists such as tooling you supplied, and commissions. Under-declaring values to save duty is not a strategy; it is fraud, and the importer of record carries it.
There is a legitimate tool called first sale, where multi-tier transactions declare the value at the first sale in the chain rather than the last. It is real and widely used, but it has strict conditions and documentation requirements — discuss it with your customs broker rather than assuming it applies.
DDP or FOB: who stands in front of customs
The Incoterm decides who is the importer of record, and with it who carries the compliance file:
- FOB — you or your broker clears customs under your name. You control the declaration, and you own the responsibility to classify and value correctly.
- DDP — the supplier or its agent delivers with duties paid. Convenient, but for container volumes understand exactly how the customs value is declared and whose name appears as importer. An under-declared DDP shipment puts your company next to the entry regardless of who paid.
For most serious import volumes, FOB with your own forwarder is the default for a reason — you see the real freight and duty numbers instead of a bundled quote. The shipping & costs guide breaks down the full cost stack, and the hidden-costs guide lists the surprises that are not tariff-related at all.
A practical landed-cost checklist
- HTS code in writing, verified in the public tariff database, per SKU.
- Current duty rate checked at budgeting time and again before shipment.
- Freight quoted separately from goods — never as an unexplained bundled number.
- Customs value built from the real transaction, including assists.
- Broker or forwarder identified before the goods are ready, not after.
- A margin buffer for rate changes between order and arrival, because 2025 proved they happen.
Frequently asked questions
How do I find the HTS code for my product?
Start from the product’s material, function and use in the official HTS index, cross-check with prior CROSS rulings on comparable products, and confirm with your customs broker. Ask the supplier for their export declaration code as a reference, but never as the final word — the importer of record owns the classification.
Do Section 301 tariffs apply to everything from China?
No — they apply to the products on the specific lists, which cover a very large share of consumer goods but not all. The classification determines whether your SKU is covered, which is another reason the HTS code comes first.
Is DDP illegal or unsafe?
Neither, when done correctly. It is routine for small parcels. The risk sits in opaque declarations on container volumes: if the customs value is understated under your name, the liability is yours. Insist on knowing the declared value and the importer of record.
What about tariffs changing between order and arrival?
Duties apply at the time of entry, not the time of order. If measures change while your goods are on the water, the new rate can apply at arrival. That is why the buffer in the checklist exists.
If you want landed cost you can defend before you commit money, send us the product, quantity and destination. We quote the goods, freight and duty picture separately, in one page — start on our services page or through the contact form.
