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Duty Types

What is Duty?

A tax imposed by the government on imported goods, based on the HTS classification and country of origin. In the context of U.S. customs and tariff recovery, understanding duty is essential for navigating the CAPE refund process and ensuring accurate duty assessment.

Definition

A duty (also called a customs duty or tariff) is a tax imposed by the government on imported goods. Duties serve multiple purposes: raising government revenue, protecting domestic industries from foreign competition, and implementing trade policy objectives. In the U.S., duties are assessed based on the HTS classification of the goods, their customs value, and their country of origin. The duty rate can be ad valorem (percentage of value), specific (fixed amount per unit), or compound (combination of both). Additional duties may apply under trade remedy programs (antidumping, countervailing) or special tariff actions (Section 201, 232, 301, IEEPA).

How Duty Relates to Tariff Refunds

The duty overpayment is the core of every CAPE refund claim. When IEEPA or Section 301 tariff rates are reduced or eliminated, the difference between the duty paid at importation and the duty that would have been owed at the new rate is the refundable amount. Tariffi's analysis calculates this differential for every qualifying entry in your ES-003 data.

Example

An importer pays a total duty of 30% on Chinese electronics: 5% base MFN rate + 25% Section 301 tariff. When the Section 301 rate drops to 10%, the duty overpayment is 15% of the customs value — the amount eligible for CAPE refund.

Frequently Asked Questions

What is the difference between a duty and a tariff?
In practice, the terms are used interchangeably. 'Tariff' can also refer to the overall schedule of rates (the Harmonized Tariff Schedule), while 'duty' typically refers to the specific tax owed on a particular import.
Who pays the duty?
The Importer of Record is legally responsible for paying duties to CBP. In practice, the importer's customs broker often pays on their behalf and then invoices the importer.

Related Terms

Ad Valorem DutyA tariff calculated as a percentage of the imported goods' declared customs value.Specific DutyA fixed-amount tariff per unit of imported goods (e.g., cents per kilogram), regardless of the goods' value.Compound DutyA tariff combining both an ad valorem percentage and a specific per-unit amount on the same import.TariffA tax imposed on imported goods, used to protect domestic industries, raise revenue, or enforce trade policy.HTS CodeHarmonized Tariff Schedule code — the 10-digit number that determines the duty rate on imported goods in the U.S.Customs ValueThe declared value of imported goods used as the basis for calculating ad valorem duties, per 19 U.S.C. section 1401a.

Legal References

  • 19 U.S.C. § 1202 — Harmonized Tariff Schedule
  • 19 U.S.C. § 1500 — Duty Assessment

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