Tariffs are a cost problem, not a policy problem
For consumer brands, tariffs are ultimately a cost-of-goods question. Whether rates go up or down, your job is to minimize the impact on your margins while staying compliant. That means understanding how your products are classified, where they’re manufactured, and what programs exist to reduce your duty exposure.
Most brands pay more in tariffs than they need to. The reason is rarely a mistake in the filing; it is that nobody has invested the time to optimize.
Understanding HTS classification
Every product that crosses a border gets classified under the Harmonized Tariff Schedule. The classification determines your duty rate, and it’s not always straightforward. A product that’s classified one way could face a 5% duty, while a slightly different classification might be 15%.
Work with a licensed customs broker to review your classifications. Even established brands often discover their products have been misclassified, sometimes in their favor and sometimes not. Getting this right is the foundation of any tariff strategy.
Duty mitigation strategies
First-sale valuation lets you pay duties on the manufacturer’s price rather than the middleman’s price, which can reduce duty costs by 10–20% for brands using trading companies. Foreign trade zones allow you to defer duties until goods enter US commerce. Duty drawback lets you recover duties on products that are re-exported.
Not every strategy applies to every brand. The right approach depends on your supply chain structure, product mix, and volume.
What to do right now
Start with an audit. Pull your import data for the last 12 months and review: What are you paying in duties? Are your HTS classifications correct? Are there programs you’re eligible for but not using?
If you’re importing more than $500K in goods annually, a tariff optimization review will almost certainly pay for itself. We’ve seen brands save six figures just by getting their classifications right.
Put this into practice.
Book a 30-minute call and we’ll show you where the margin is hiding in your operations.
Book your audit