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U.S. Tariff Rate Application Order


[U.S. Tariff Rate Application Order]






Tariff rates are determined relatively by the type of product and by the trade country and by the type of tax rates. Thereby any hasty conclusion to the tariff rate of a product should be refrained.


Adoption of tariff rates, and payment of taxes of any country serve the principles of report. Thereby, it is possible that the duty-payer can waive the lower tariff rate that is advantageous to the one, and then pay the duty of higher tariff rate. (For example, if to acquire a certificate of origin is complicated, then waive the conventional tariff to adopt the basic tariff rate, or etc.)

Similar tariff rates are generally designated with each HS code, but each same code is not always applied to the tariff rates. (It is not few that more than 2 tariff rates are applied to the same HD code by the product type.

Various types of tariff rates can be adopted to a certain product, but only one type of tariff rate would be applied in the end. The finally adopted tariff rate should be judged by the consideration of legal priority, international treaty, trade country, import and/or export requirements of each country, and etc.




U.S. import tariff rate adoption priority


There is no export tariff rate in U.S., but only import tariffs are imposed.


Import tariffs (ad valorem tax among them) are estimated by multiplying a tariff rate by a customs value, thus, the customs value of a product imported into U.S. is based on its FOB price


Upon the tariff rate adopted to a certain country, such country is given the right to adopt such tariff rate when the import from it is being.


If several tariff rates are competed upon a certain product, its priority order is the following(an actual calculation of a tariff amount should through several complicated procedures of the exchange, fractional treatment, specific duty and others of a nation):


Priority 1 : Flexible tariff system


Flexible tariff system means the tariff system that increases and/or decreases flexible tariff rates within a certain range by the fluctuation of domestic and foreign economic environment for the protection of domestic industries, price stabilization and etc.

U.S. also serve the flexible tariff system such as the anti-dumping duty, retaliatory duty, quota tariff and etc, as other countries do so. To adopt the system is generally commenced by specifying a country, company, product and etc.

Once the flexible tariff is effective, it is adopted to a product as the most priority rather than other tariff rates.



Priority 2 : Statutory tax (Column 2)


Statutory tax means the high tariff rate established under the U.S. tariff act of 1930.

This tariff rate was the tariff rate to the communist countries, but the targets were gradually decreased and, by the end of 2001, Afghanistan and Vietnam were excluded and Laos was excluded in 2005, and the only adopted countries are North Korea and Cuba.

That is, meaning that any product imported from Cuba and North Korea would be imposed with very high tariff rates, making such import is extremely difficult.



Priority 3 : Special tax (Special - Column 1)


Special tax means the tax rate to the countries that are given the preference system for the generalized system of preference and the free trade agreement(FTA) with U.S.. However, even countries with the FTA are not always given this special tax and, if a trade party waive the special tax and/or not eligible for the certificate of origin and others to acquire the tax, are given the general tariff rate.



Priority 4 : General tax (General - Column 1)


General tax means the tax rate that is generally adopted unless a product is subject to the special tax or statutory tax. The tax is widely adopted to the countries with the respect of WTO member state and/or most favvored nation treatment. (however, North Korea and Cuba are excluded from this)






The Tax Consultancy Service(TCS) provides the guideline upon applicable tariff rates under the premise that duty-payers would generally adopt the lowest tariff rate.


The TSC system guides applicable tax rates under the premise that duty-payers would adopt the tax rate that would east business inconveniences when there are more than 2 tax rates applicable and/or applied to a certain product. (For example, if the FTA tax rate and general tax rate are both at 0%, the general tax rate is adopted in the end, for there is no need to acquire the certificate of origin.)



The TCS system principally guides lower tariff rates and tariff amounts under the premise that duty-payers would be adopted to the lower tariff rate, when a tariff rate is differed by commencing a certain requirement, by doing so.


However, some duty-payers might not given this tariff rate for an unreasonable condition to commence, thereof a mini-simulation is prepared to inform such duty-payers in case of insufficient fulfillment of the condition.

(For example, it simulates the affecting cases if no certificate of origin is acquired for the preferential tax rate of the most poor countries, and/or no quota received from the quota tariff. However, such mini simulation button is only visible to the directly related products and areas.)


The TCS system is automatic for calculating the tariff application priority, selection of the finally adopted tariff, tariff amount calculation, by scrutinized analysis upon the laws and others from each nation. However, the system doesn't reflect the certain tax rates such as retaliatory tariff, countervailing tariff, anti-dumping tariff and others to certain nations and/or companies.


The TCS system guides as the chart of the finally adopted tariff rate and tax amount, and the tax amount of the types of applicable tariff rate to certain products. (Please click the competition tax rate button.)

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