Understanding what you'll actually pay in import duties when sourcing from China requires navigating two separate tariff systems — and knowing which one applies to your product. This guide focuses on US importers, but the principles apply broadly.
Base MFN Duty Rates
Every country has a base import duty rate for each product category, set under the Most Favoured Nation (MFN) principle. For the US, these rates are set by Congress and published in the Harmonized Tariff Schedule of the United States (HTSUS).
MFN rates for manufactured goods from China typically range from 0% (many electronics components, raw materials) to 25% (some finished goods, apparel). The specific rate depends on the 10-digit HTS code that classifies your product. Misclassifying a product — even accidentally — is a customs violation.
Section 301 Tariffs: The Additional Layer
Since July 2018, the US Trade Representative has imposed additional tariffs on Chinese-origin goods under Section 301 of the Trade Act of 1974. These tariffs are separate from, and additive to, MFN rates.
The 301 tariffs operate in "lists" covering different product categories, with additional rates of 7.5%, 25%, or higher. As of 2025, additional tariffs on many manufactured goods remain at 25%. Some product categories have been excluded temporarily via exclusion orders — these exclusions expire and must be renewed.
A Realistic Example
| Product | HTS Code (example) | MFN Rate | Section 301 | Total Duty |
|---|---|---|---|---|
| Upholstered sofa | 9401.61.60 | Free | 25% | 25% |
| LED commercial fixture | 9405.11.60 | 3.9% | 25% | 28.9% |
| PCB assembly | 8534.00.00 | Free | 0–25%* | 0–25% |
| Acrylic display stand | 3926.90.99 | 5.3% | 25% | 30.3% |
*PCB classification and Section 301 applicability varies by specification. Verify with a licensed customs broker.
Calculating Your Landed Cost
Duty is calculated on the customs value of goods — generally the transaction price (what you paid the factory), plus, in some cases, assists (tooling or materials you provided the factory). Freight and insurance costs are excluded from the dutiable value for US customs purposes under the FOB valuation method.
Your full landed cost formula: Factory price + Freight + Marine insurance + Import duty + Customs broker fee + Inland delivery. Plan this calculation before you place the order. A product that looks profitable at the factory gate can be marginal once duty is applied.
Strategies to Manage Duty Burden
Check for exclusions: Some HTS codes have active Section 301 exclusions — your customs broker or the USTR website can confirm.
Verify classification: Products can sometimes be legitimately classified under alternative HTS codes with lower rates. A licensed customs broker can advise — and will be responsible for the classification they recommend.
Consider first sale valuation: For goods sold through an intermediary, US Customs may allow duty calculation on the first sale price (factory to middleman) rather than the last sale price (middleman to you). This can reduce dutiable value.
Build duty into sourcing decisions: If two comparable products have significantly different duty rates, factor this into your factory selection and pricing negotiations from the start.
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