If you’re importing goods into the United States, you’ve probably heard the terms “duties” and “tariffs” used interchangeably. While they’re related, there’s a difference worth understanding.

When your products arrive in the U.S., they’re subject to various taxes and fees known as “duties.” These are collected by U.S. Customs and Border Protection (CBP) to regulate trade, protect American industries, and generate revenue.

Think of duties as the umbrella term for all taxes charged on imported goods. This includes:

Tariffs are the most common type. They’re the fees the government charges when products cross the border. These fees can make your products more expensive, which is why understanding them matters for your bottom line.

Since duties include tariffs and other fees, let’s walk through what you need to know about how they work.

What Changed in 2025: The New Tariff Reality

The trade landscape shifted dramatically in 2025. If you’ve noticed your import costs rising, you’re not alone. The U.S. average tariff rate hit about 16.8% – the highest it’s been since 1935.

Here’s what happened and what it means for your business:

How the New Tariffs Work

The government used two main legal tools to impose these new tariffs:

1. IEEPA (International Emergency Economic Powers Act) – This allowed “reciprocal tariffs” ranging from 10% to 50%, depending on the country.
2. Section 232 – This targets products considered threats to national security, including steel, aluminum, cars, copper, and timber.

What Does It Mean by Country

Not all countries face the same rates. Here’s the current landscape:

A Big Change for Small Shipments

Here’s something that affects many small businesses: The $800 de minimis exemption is gone for all countries as of August 2025.

How Are Duties Calculated?

Think of duty calculation like a recipe – several ingredients go into determining what you’ll pay. The main factors are the type of product, where it comes from, and what trade agreements apply.

Every product has a code in something called the Harmonized Tariff Schedule (HTSUS). It’s basically a massive catalog of products with their assigned duty rates. When your shipment arrives, you’ll need to declare what you’re importing and its value. CBP uses this information to calculate what you owe.

The Main Factors That Affect Your Duty Bill:

1. Transaction Value: This is what you actually paid for the goods when they were sold for export to the U.S. It’s usually your invoice price and serves as the starting point for calculating duties.

2. Tariff Classification: Every product gets a specific code that determines its duty rate. Getting the right code matters – a lot. Different codes can mean vastly different rates, so accurate classification is crucial.

3. Country of Origin: Where your goods come from makes a big difference. Products from countries with free trade agreements (like Canada, Mexico, or Central America) might qualify for reduced or zero tariffs. Products from countries without these agreements typically face higher rates.

4. Additional Tariffs: Some products face extra charges on top of the standard rate. These might come from trade disputes or special protections for U.S. industries.

5. Tariff Stacking (New in 2025): Here’s where it gets tricky. Sometimes multiple tariffs can apply to the same shipment. For example, you might pay tariffs on the steel content in your product, plus tariffs on the overall product, plus tariffs based on the country of origin. These can stack up quickly and catch importers off guard.

Who Actually Pays These Duties?

You do. As the importer of record (the business or person bringing goods into the U.S.), you’re responsible for paying the duties.

Important: Despite what you might hear, tariffs aren’t paid by foreign countries – they’re fees that U.S. businesses pay to the U.S. government. Usually, you’ll pass these costs along to your customers through higher prices, but you’re the one writing the check to Customs.

You pay duties when your goods clear customs. The easiest way is to set up an ACH account that pays Customs directly.

New Requirement: Starting February 6, 2026, all customs refunds are electronic-only. You’ll need to enroll through the ACE Portal and keep your CBP Form 5106 up to date.

Free Trade Agreements: Your Potential Savings

Free trade agreements (FTAs) can save you significant money – sometimes eliminating duties. But you have to follow the rules exactly.

USMCA (United States-Mexico-Canada Agreement)

Many products from Mexico and Canada come in duty-free under USMCA. But there’s a catch:

CAFTA-DR (Central America-Dominican Republic)

Qualifying goods from Central America and the Dominican Republic can enter duty-free. The keyword is “qualifying” – the products must actually meet the agreement’s requirements.

Making FTAs Work for You:

1. Know the rules for your specific products.
2. Keep detailed records – you may need to prove origin later.
3. Work with experts who understand the fine print.
4. Stay updated – rules and interpretations change.

The savings can be substantial, but one mistake can wipe them out. This is where having a knowledgeable customs broker really pays off.

Figuring Out What You’ll Pay

Here’s the basic process for estimating your duties:

1. Find the correct product code (HTSUS) for what you’re importing.
2. Determine where it’s actually made (country of origin).
3. Check if any special tariffs apply (Section 301, Section 232, reciprocal tariffs).
4. See if you qualify for any breaks (FTAs, exemptions).
5. Add it all up, remembering that tariffs can stack.

Our Recommendation: Don’t go it alone. A licensed customs broker can:

Think of it this way: you could spend hours trying to determine whether your product is classified as 8481.80.90 or 8481.80.50 (and get it wrong), or you could have an expert who handles this task daily handle it for you.

How Promptus Can Help

Here in Florida, we work with small and medium-sized businesses every day to navigate customs challenges. As a licensed, C-TPAT certified customs broker, we handle all the details so you don’t have to.

We can help you with:

We stay on top of the constant changes – new tariffs, CBP rulings, and regulation updates. While you focus on running your business, we’re monitoring developments in Washington and at the ports to help you avoid surprises.

Whether you’re just starting to import or you’ve been doing it for years, the 2025 tariff changes have made things more complicated. Having someone in your corner who knows the system inside and out can save you real money and headaches.

Give us a call at 1-877-776-6799. Let’s talk about your specific situation and figure out the best way to handle your imports in this new environment.