How Are Tariffs Calculated? The 2026 US Import Duty Formula Explained

The tariff formula is deceptively simple: Customs Value × Duty Rate = Duty Owed. In any other year, that's about all you'd need to know. But 2026 is not a normal year.

Right now, a single import shipment can be hit by up to four separate tariff programs simultaneously. Your MFN base rate, plus a Section 122 global surcharge, plus a Section 301 China tariff, plus a Section 232 metals tariff — all stacking on top of each other. A Chinese steel product that had a 3.8% duty rate in 2024 now faces an effective rate above 88%.

This guide walks through exactly how to calculate your total import duty in 2026, with real HTS codes and real numbers. No abstract examples — just the actual math.

Want to skip the math? Our tariff calculator does this automatically for any HTS code.

By VatCheck Research Team. Sources: USITC Harmonized Tariff Schedule, CBP trade guidance, Presidential Proclamations 10896, 10962, and 11008.

The Basic Formula: Three Types of Duty Rates

Before we get to the 2026 stacking complexity, here's how individual tariff rates work. There are three types:

Ad Valorem (Percentage of Value)

This is the most common type. You pay a percentage of the customs value of your goods.

Formula: Customs Value × Rate % = Duty

Example: Importing ceramic mugs classified under HTS 6912.00 with a customs value of $25,000. The MFN rate is 6%.

$25,000 × 6% = $1,500 in duty

About 70% of all US tariff lines are ad valorem.

Specific (Fixed Amount Per Unit)

You pay a fixed dollar amount per physical unit — per kilogram, per liter, per dozen, regardless of value.

Formula: Quantity × Rate per Unit = Duty

Example: Importing 5,000 liters of certain fruit juices at a specific rate of $0.009/liter.

5,000 × $0.009 = $45 in duty

Specific rates are common on agricultural products, alcohol, and tobacco. They tend to hit lower-value goods harder as a percentage of their worth.

Compound (Both Combined)

Some HTS codes charge both an ad valorem rate and a specific rate.

Formula: (Customs Value × Rate %) + (Quantity × Rate per Unit) = Duty

Example: Importing 2,000 kg of a food product at "10% + $0.25/kg" compound rate, with a customs value of $15,000.

($15,000 × 10%) + (2,000 × $0.25) = $1,500 + $500 = $2,000 in duty

Compound rates show up in about 10% of tariff lines, mostly in agricultural chapters.

What Is "Customs Value"?

This trips up first-time importers constantly. The customs value is not necessarily what you paid the supplier. It's the transaction value of the goods, which includes:

The price paid to the seller (FOB price in most US transactions)
Assists — tooling, molds, dies, artwork, or engineering that you provided to the manufacturer for free or at reduced cost
Royalties or license fees related to the imported goods
Packing costs incurred by the buyer

It does not include international freight and insurance (the US uses FOB valuation, unlike most countries that use CIF). However, certain additions or deductions can apply based on the transaction structure.

Rule of thumb: Start with the invoice price. If you provided anything to the manufacturer beyond money — tooling, design files, packaging materials — talk to your broker about assists. These get added to customs value and people miss them constantly.

The 2026 Tariff Stacking Formula

Here's where 2026 gets complicated. Your total duty isn't just one rate — it's potentially four rates layered on top of each other. Each layer comes from a different legal authority, and they're additive.

Total Duty = MFN Base Rate + Section 122 + Section 301 + Section 232

Let me break down each layer:

Layer 1: MFN Base Rate

This is the "normal" tariff rate assigned to every HTS code in the Harmonized Tariff Schedule. Set by the US International Trade Commission. Ranges from 0% to 50%+ depending on the product.

You find this rate by looking up your HTS code. Every product imported into the US has a 10-digit HTS classification that determines the base rate.

Layer 2: Section 122 (Global Reciprocal Tariff)

After the Supreme Court struck down IEEPA tariffs in February 2026, Congress passed Section 122 of the Trade Act as a replacement. It applies a 10% baseline surcharge on imports from most countries, with some countries facing 15%.

Section 122 is temporary — it expires after 150 days (around July 24, 2026) unless Congress extends it.

Key exception: Section 122 does not apply to products already covered by Section 232 at the 50% tier. If your product faces a 50% Section 232 tariff, Section 122 is waived on that product. Derivative articles at 25% still get Section 122 stacked on top.

Layer 3: Section 301 (Country-Specific Tariffs)

Section 301 tariffs currently target Chinese goods at rates of 7.5% to 100% depending on the product list:

List 1: 25% (machinery, electronics)
List 2: 25% (plastics, chemicals)
List 3: 25% (broad consumer goods)
List 4A: 7.5% (consumer electronics, apparel)
2024 Additions: 50-100% (EVs at 100%, semiconductors at 50%, solar cells at 50%, steel/aluminum at 25%, batteries at 25%)

Section 301 also applies to goods from other countries under active investigation. As of May 2026, 76 economies are under Section 301 review.

Section 301 stacks with everything. It's additive to the MFN rate, to Section 122, and to Section 232.

Layer 4: Section 232 (Metals Tariffs)

Section 232 applies specifically to steel, aluminum, and (since April 6, 2026) copper products. The rates as of the April 2 restructuring:

50% on articles made entirely or primarily of steel, aluminum, or copper
25% on derivative articles (finished goods containing substantial metal content)
15% on electrical grid and industrial equipment (transitional, through December 2027)
0% on articles where the covered metal is less than 15% of total weight (the de minimis exception)

Section 232 tariffs apply on full customs value — not just the metal content. See our full Section 232 breakdown.

Five Worked Examples With Real HTS Codes

This is the part no other guide provides. Let's calculate actual duty for five common import scenarios:

Example 1: Chinese Steel Rebar

| Item | Value | |---|---| | Product | Hot-rolled steel rebar | | HTS Code | 7213.10.00 | | Customs Value | $50,000 | | Country | China |

| Tariff Layer | Rate | Duty | |---|---|---| | MFN Base | 3.8% | $1,900 | | Section 122 | 0% (waived — covered by 232 at 50%) | $0 | | Section 301 (List 1) | 25% | $12,500 | | Section 232 | 50% | $25,000 | | Total | 78.8% | $39,400 |

That same rebar had an effective rate of about 28.8% in early 2024 (3.8% MFN + 25% Section 301). The rate nearly tripled.

Example 2: Taiwanese Computer Monitors

| Item | Value | |---|---| | Product | LCD monitors, 22 inches | | HTS Code | 8528.52.00 | | Customs Value | $100,000 | | Country | Taiwan |

| Tariff Layer | Rate | Duty | |---|---|---| | MFN Base | 3.9% | $3,900 | | Section 122 | 10% | $10,000 | | Section 301 | 0% (Taiwan not covered) | $0 | | Section 232 | 0% (not a metal article) | $0 | | Total | 13.9% | $13,900 |

Taiwan benefits from the US-Taiwan Agreement on Reciprocal Trade, but Section 122 still applies.

Example 3: Mexican Auto Parts (USMCA-Eligible)

| Item | Value | |---|---| | Product | Brake pads, qualifying under USMCA rules of origin | | HTS Code | 8708.30.50 | | Customs Value | $75,000 | | Country | Mexico |

| Tariff Layer | Rate | Duty | |---|---|---| | MFN Base | 2.5% → 0% under USMCA | $0 | | Section 122 | 10% | $7,500 | | Section 301 | 0% | $0 | | Section 232 | 0% (not a metal article) | $0 | | Total | 10% | $7,500 |

USMCA zeroes out the MFN rate if the part meets rules of origin (75% regional value content for autos). But Section 122 applies regardless of trade agreements.

Example 4: Indian Cotton T-Shirts

| Item | Value | |---|---| | Product | Men's cotton knit T-shirts | | HTS Code | 6109.10.00 | | Customs Value | $40,000 | | Country | India |

| Tariff Layer | Rate | Duty | |---|---|---| | MFN Base | 16.5% | $6,600 | | Section 122 | 10% | $4,000 | | Section 301 | 0% (India not on List 1-4A) | $0 | | Section 232 | 0% (not metal) | $0 | | Total | 26.5% | $10,600 |

India is one of the 76 economies under active Section 301 investigation. If a tariff action results from the Section 301 hearings, this rate could increase significantly.

Example 5: German Industrial Machinery With Steel Frame

| Item | Value | |---|---| | Product | CNC milling machine with steel structural frame | | HTS Code | 8459.61.00 | | Customs Value | $250,000 | | Country | Germany | | Steel weight | 18% of total weight |

| Tariff Layer | Rate | Duty | |---|---|---| | MFN Base | 4.4% | $11,000 | | Section 122 | 10% | $25,000 | | Section 301 | 0% | $0 | | Section 232 (derivative) | 25% on full value (steel >15% by weight) | $62,500 | | Total | 39.4% | $98,500 |

This is the scenario that catches people off guard. The machine isn't "made of steel" — it's a precision machine tool that happens to have a steel frame. But because steel exceeds 15% of total weight, it's classified as a Section 232 derivative article at 25% on the entire customs value, not just the steel portion.

If the steel frame were only 12% of total weight, the de minimis exception would apply: no Section 232 duty, dropping the total rate to 14.4% ($36,000). That 3-percentage-point difference in steel weight costs an extra $62,500.

The Decision Flowchart: Which Tariffs Apply to My Product?

Use this step-by-step to figure out your total rate:

Step 1 — Find your HTS code Search our HTS database or use the tariff calculator. Your 10-digit HTS code determines your MFN base rate.

Step 2 — What country is it from? Check if the country faces Section 122 surcharges (currently 10% for most countries). A few exemptions exist for specific trade agreement categories.

Step 3 — Is it from China or a Section 301 country? If from China, identify which Section 301 list your product falls under (7.5% to 100%). Other Section 301 actions may apply to additional countries after pending investigations.

Step 4 — Is it steel, aluminum, or copper? If yes → 50% Section 232 (waives Section 122). If it contains these metals → check the 15% weight threshold for derivative article classification at 25%.

Step 5 — Does a trade agreement apply? USMCA (Mexico/Canada), US-Taiwan ART, US-Korea FTA, and others can reduce or eliminate the MFN base rate. But Section 122, 301, and 232 surcharges generally still apply.

Step 6 — Add all applicable rates Total Effective Rate = MFN + Section 122 + Section 301 + Section 232

Beyond Tariffs: The Full Landed Cost

Your tariff bill is the biggest line item, but it's not the only one. Total landed cost includes:

Merchandise Processing Fee (MPF): 0.3464% of customs value, with a minimum of $31.67 and maximum of $614.35 per entry. Every commercial import pays this.
Harbor Maintenance Fee (HMF): 0.125% of customs value for ocean freight shipments. Air freight is exempt.
Customs broker fee: Typically $150-250 per entry summary. Some brokers charge more for entries with Section 232 or Section 301 complications.
Customs bond: Required for all commercial imports. Single-entry bonds cost $50-100; continuous bonds run $400-700/year.
Anti-dumping/countervailing duties (AD/CVD): Product-specific and country-specific. These can add 20-300%+ on top of everything else. Check USITC AD/CVD orders for your product.

Total Landed Cost = Product Cost + Shipping + Insurance + All Tariffs + MPF + HMF + Bond + Broker Fee + AD/CVD (if applicable)

Use our calculator to estimate the tariff portion, then add fees separately.

Can You Reduce Your Tariff Bill?

A few legitimate strategies exist:

Trade agreement benefits. If your supplier qualifies under USMCA, KORUS, or another FTA, you may get a reduced or zero MFN rate. Your supplier must provide a certificate of origin.
Tariff engineering. Sometimes reclassifying a product under a different (legitimate) HTS code yields a lower rate. This requires a CBP binding ruling — don't guess.
Foreign Trade Zones (FTZ). Importing into an FTZ and manufacturing there can reduce duty to the rate on the finished product rather than the components.
Duty drawback. If you re-export imported goods, you can recover up to 99% of duties paid.
IEEPA refund. If you paid IEEPA tariffs between February 2025 and February 2026, you're owed a refund. File through the CAPE portal or check your eligibility.

Section 122 Expiration: What Happens July 24?

Section 122 tariffs are temporary — authorized for 150 days. The current authorization expires around July 24, 2026. Three scenarios:

Congress extends Section 122. Most likely outcome. The 10% rate continues.
Congress replaces with permanent tariff legislation. Possible but slower to implement.
Section 122 expires without replacement. Tariff rates drop by 10-15% overnight.

Track this development at our Section 301 investigation page, which covers the broader trade policy landscape.

Frequently Asked Questions

How do you calculate tariffs on imports?

Multiply your customs value (typically the FOB price) by the applicable duty rate from the HTS Schedule. In 2026, you must also add any Section 122 (10%), Section 301 (7.5-100%), and Section 232 (25-50%) surcharges. Use our calculator for instant results.

Do tariffs stack on top of each other?

Yes. Multiple tariff authorities apply simultaneously and are additive. A Chinese steel product can face MFN + Section 122 + Section 301 + Section 232 for an effective rate above 80%.

What is the average US tariff rate in 2026?

The simple average MFN rate is about 5.6%. But the trade-weighted average — accounting for actual import volumes and surcharges — is significantly higher, estimated at 15-25% depending on which countries you trade with.

How do I find the tariff rate for my product?

Look up your product's HTS code in our database, then check the rate in our calculator. You need the 10-digit HTS code plus the country of origin to get the full stacked rate.

Can I get a tariff refund?

If you paid IEEPA tariffs (February 2025 to February 2026), yes — file through the CAPE portal. For other tariff types, look into duty drawback (for re-exports) or tariff reclassification.

What's the difference between a tariff and a duty?

They're the same thing. "Tariff" refers to the rate schedule; "duty" refers to the actual payment. In practice, everyone uses the terms interchangeably.

Last updated: May 2026. Tariff rates change frequently. Always verify current rates with our calculator before making import decisions. For official HTS rates, see USITC.gov.