How to Determine If Your Product Qualifies for Lower Tariffs

Duty rates aren’t set in stone. They’re set in law. Like most legal frameworks, they come with nuance, exceptions, and opportunities. Understanding how those rates are calculated (and how they can be lowered) is less about beating the system and more about understanding it better than the next importer.

If your duty rates seem higher than they should be, or something in the fine print feels off, you’re not wrong to question it. Here’s how duty rates work, where the breaks are, and what to look for before you overpay again.

First Things First: Classification Drives Everything

Duty rates are determined by the Harmonized Tariff Schedule of the United States (HTSUS). Specifically, by the 10-digit classification assigned to your product. That number doesn’t just describe what you’re importing, it also determines what you owe.

That makes classification more than a box on a form. It’s the legal foundation for what CBP collects from you. If the classification is wrong, everything downstream from the duty rate, free trade agreement eligibility, and admissibility, could be wrong too.

So before looking for savings, the first step is making sure your classification is accurate. (Hint: if it hasn’t been reviewed since your last supplier change, packaging change, or tariff spike… it’s time to revisit it.)

General, Special, and Column 2: What Duty Rates Are You Actually Looking At?

Each HTSUS classification can include up to three duty rates:

• General Rate – The standard rate for goods from countries with normal trade relations (NTR) with the U.S.

• Special Rate – A reduced or zero rate that applies if your product qualifies under a free trade agreement or special trade program.

• Column 2 Rate – Significantly higher rates for goods from countries without NTR status (currently limited Russia, Belarus, North Korea and Cuba).

The rate you pay depends on classification and origin. Which brings us to…

Country of Origin: Not Where It Ships From, but Where It’s Born

You don’t get FTA benefits just because a product was packed and shipped from Canada or Mexico. It must qualify under the specific rules of origin in the agreement (USMCA, KORUS, CAFTA, etc.) and meet value thresholds or specific manufacturing steps to count.

Origin planning matters. Small changes in production location or materials sourcing can determine whether your goods qualify for 0% duty or the full general rate. We’ve seen plenty of companies miss opportunities because they didn’t coordinate with suppliers upstream.

FTA Eligibility: Check the Rules, Not the Marketing Brochure

Just because a supplier tells you a product is “duty-free under USMCA” doesn’t make it true. The origin requirements are specific, often product-by-product, and sometimes contain exceptions that affect eligibility.

If you’re relying on a supplier’s word alone, or you haven’t reviewed the rules of origin against your actual product data, it’s worth confirming. (And documenting.)

Duty Reduction Strategies That Actually Work

Here are a few practical ways to reduce duties legally and defensibly:

• Revisit Your Classifications: Many importers use codes that haven’t been reviewed in years. A small change in classification, if justified, can result in significant savings.

• Review FTA Eligibility: Work with suppliers to verify origin, ensure certificates are accurate, and identify areas where minor changes could meet thresholds.

• Use Chapter 98 Programs: Certain HTSUS provisions (like 9801 or 9802) allow for duty relief on goods that meet specific criteria, such as U.S. goods returned or certain processing abroad.

• Tariff Engineering: Design products so they meet the legal criteria for a more favorable classification before importation. (We wrote a whole blog on this.)

Avoid the Shortcut That Becomes a Fine

One word of caution: attempting to qualify for lower duties through post-import alterations, relabeling, or massaging descriptions on paperwork is not duty optimization. It’s a compliance issue. CBP is less interested in what your product becomes later, and very focused on what it is at the time of entry.

If you’re unsure, get it reviewed. CBP penalties for misclassification or false origin claims can be substantial, not to mention the costs of retroactive duties and delayed shipments.

Ready to Take a Second Look? That’s What We Do. 

O’Meara & Associates helps companies cut through the complexity and spot the savings opportunities buried in the tariff schedule. We evaluate classifications, review origin claims, and help build duty strategies that are both defensible and efficient.

If your landed costs are climbing or if your classification has gone untouched for years, we’re ready when you are.
Contact us to see if your product qualifies for lower tariffs. We’ll help you find out before CBP does.