How common are compound duties?

Compound duties appear on a relatively small percentage of HTS codes, mostly in agricultural and chemical products. The majority of tariff lines use pure ad valorem rates.

How is the refund calculated on a compound duty?

Both the ad valorem and specific components are recalculated at the new rate. The refund is the difference between what was paid and what would have been owed under the reduced tariff.

Duty Types

What is Compound Duty?

A tariff combining both an ad valorem percentage and a specific per-unit amount on the same import. In the context of U.S. customs and tariff recovery, understanding compound duty is essential for navigating the CAPE refund process and ensuring accurate duty assessment.

Definition

A compound duty combines an ad valorem component (percentage of value) with a specific component (fixed amount per unit). For example, a compound duty might be '10% ad valorem plus $0.50 per kilogram.' This structure is used for products where both the value and quantity are relevant to the tariff's protective intent. Compound duties are less common than pure ad valorem or specific duties but appear throughout the HTS, particularly on agricultural products, chemicals, and certain manufactured goods.

How Compound Duty Relates to Tariff Refunds

When a compound duty entry qualifies for an IEEPA or Section 301 refund, the overpayment calculation must account for both components. Tariffi's analysis separates the ad valorem and specific portions to accurately compute the refund amount due.

Example

Imported cheese is subject to a compound duty of 15% ad valorem plus $1.20 per kilogram. A 10,000 kg shipment valued at $80,000 owes $12,000 (ad valorem) + $12,000 (specific) = $24,000 total duty.

Frequently Asked Questions

How common are compound duties?: Compound duties appear on a relatively small percentage of HTS codes, mostly in agricultural and chemical products. The majority of tariff lines use pure ad valorem rates.
How is the refund calculated on a compound duty?: Both the ad valorem and specific components are recalculated at the new rate. The refund is the difference between what was paid and what would have been owed under the reduced tariff.

Legal References

19 U.S.C. § 1202 — Harmonized Tariff Schedule

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