{"id":15301,"date":"2023-11-20T05:57:48","date_gmt":"2023-11-20T13:57:48","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dcl-v3\/?p=15301"},"modified":"2024-07-19T03:58:55","modified_gmt":"2024-07-19T10:58:55","slug":"navigative-tariffs","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dcl-v3\/blog\/supply-chain\/navigative-tariffs\/","title":{"rendered":"Navigating Tariffs and International Shipping Costs for Ecommerce Businesses Going Global"},"content":{"rendered":"

If your brand is <\/span>gaining interest from consumers<\/span><\/a> in other countries it may be a sign that you should <\/span>start shipping internationally<\/span><\/a>. It can be a very lucrative point of growth, but one that requires rigorous planning to execute smoothly. <\/span>International shipping is complex<\/span><\/a> and it\u2019s a big step for any ecommerce brand. <\/span>\u00a0<\/span><\/p>\n

Whether you’re completely new to global shipping or you’re adding a new country to your international shipping mix, it’s important to first fully understand the tariffs, customs fees, and international shipping costs required. Accurate comprehension of these costs can substantially lessen any issues with <\/span>budgeting and resource allocation<\/span><\/a>. <\/span><\/p>\n

What’s the Difference Between Tariffs and Taxes? <\/span><\/b>\u00a0<\/span><\/p>\n

Tariffs are fees paid at customs when goods are imported from another country. They give a price advantage to locally produced goods over similar goods which are imported. They contribute to the revenue stream of the local government. Tariffs are also known as customs duties; the words tariff and duty can be used interchangeably. <\/span>\u00a0<\/span><\/p>\n

For example, there is a current trade agreement between the US, Canada, and Mexico that there will be no tariffs on imports from any of the three countries\u2014it\u2019s called the <\/span>USMCA trade agreement<\/span><\/a>. Alternatively, with China there is a blanket 25% tariff (on top of any duties) given to any products imported into the US.<\/span>\u00a0<\/span><\/p>\n

Here are the current US tariffs according to the <\/span>Harmonized Tariffs Schedule (HTS)<\/span><\/a>. <\/span>\u00a0<\/span><\/p>\n

Taxes are a separate (and often additional) fee defined and collected by the government or state where goods are being imported into. <\/span>Import taxes<\/span><\/a>\u00a0are based on a standard percentage of the value of the imported product coming into the country. <\/span>\u00a0<\/span><\/p>\n

There are various names for import taxes based on the country of import: Value-Added Tax (VAT) or Goods and Services Tax (GST). For example, The UK has a VAT rate of 20% and Australia has a GST rate of 10%. All VAT\/GST are a flat percentage rate applied to all products being imported. <\/span>\u00a0<\/span><\/p>\n

How are Tariffs Calculated?<\/span><\/b>\u00a0<\/span><\/p>\n

All products will have different tariffs that depend on a combination of product classification, country of origin, and the country where the goods are being shipped. All tariffs are based on two main factors: \u00a0<\/span>\u00a0<\/span><\/p>\n

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  1. The type of goods being imported, as classified by the correct HS Code. <\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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    1. The international trade agreements between the country of origin and the country of import.<\/span>\u00a0<\/span><\/li>\n<\/ol>\n

      To determine the tariffs you\u2019ll incur when shipping abroad, the first step is to accurately classify your products. The Harmonized System is a globally recognized standard of classification; every material has a corresponding code that can be identified. This code is an important part of <\/span>customs documentation<\/span><\/a> and labeling\u2014HS codes help CBA (Customs and Border Patrol Agency) properly identify the customs process needed, tax and tariff rates, and any special shipping or handling that may be necessary. <\/span>\u00a0<\/span><\/p>\n

      Once you know the <\/span>HS Code<\/span><\/a> for your products, you can look up the corresponding tariff (duty) rate. <\/span>\u00a0<\/span><\/p>\n

      More resources for finding the tariffs specific to your products and country of import: <\/span>\u00a0<\/span><\/p>\n