“ Customs value is more than just a price tag— it includes freight, insurance, royalties, and resale proceeds.”
Who pays the tariff? The importer of record (IOR) is statutorily liable for tariffs on imported goods at the time the goods pass through CBP. However, the economic burden of the tariffs may not necessarily rest solely on the IOR. Example: A customs broker can pay duties on behalf of the IOR and then invoice the actual payer (i.e., a consignee or financing partner). An IOR can authorize another party to pay tariff costs via commercial agreement or a written power of attorney. An IOR can also use a customs bond to defer payment, and a third party may reimburse or fund that payment depending on agreement terms. Note : Even if another party is financially responsible for the tariff, CBP still holds the IOR legally responsible. If I am the IOR and am responsible for tariff payments, how can I best manage increased costs? If you are the IOR and financially responsible for tariff payments, such expense usually cascades down to consumers via increased pricing. If you do not want to pass costs down to consumers, one option is to execute contractual arrangements with your foreign manufacturers and stipulate that they are responsible for the tariffs. Example: Using International Commercial Terms (also known as “Intercoms”) outlined by the International Chamber of Commerce, a vendor and its foreign manufacturer can arrange for shipping to be Delivered Duty Paid (DDP). DDP means that the foreign manufacturer is responsible for all costs, including duties and tariffs, until the goods are transported to the vendor at an agreed-upon location in the United States. Note : In any event, tariffs are paid to CBP before the goods are cleared and released for transportation from the US port of entry to the final US destination.
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