Tariffs & Duties

The government-imposed import taxes that sit inside Landed Cost and therefore feed Cost of Goods Sold (COGS) and Gross Margin. A duty is the standard tax levied on a good when it crosses a border, set by its HS Code Classification and country of origin; a tariff is the broader term, often used for additional or policy-driven import taxes layered on top of the base duty. This page is the volatile macro layer that runs 124–126 (Cost of Goods Sold (COGS), Landed Cost, Incoterms) repeatedly flagged could only be sourced from vendors — this run prioritised primary trade-authority sources (CBP, USTR/USITC, gov.uk, EU Taxation & Customs, WTO).

Firewall: every claim below is what a source reports. See ../../CONTEXT.md Rule 1. Tariff figures and legal status in 2025–2026 are exceptionally volatile and several are in active litigation — treat all as (as-of YYYY-MM-DD) and re-verify before relying on them.

How duties are determined

A good's duty rate is a function of three things, as reflected in the official tariff schedules: its commodity code (HS Code Classification — apparel sits in HS Chapters 61 knitted / 62 not-knitted), its country of origin (which determines whether a preferential/FTA rate or the standard "third-country" MFN rate applies), and its customs value (typically the CIF or transaction value the duty percentage is applied to). The authoritative per-country reference is the WTO World Tariff Profiles 2025 (data as of end-2024), which the source notes is the single best primary replacement for vendor-sourced average-duty figures — WTO, primary (as-of 2026-06-28).

Key terms

Term	Meaning (per sources)
Duty	Standard border tax on a good, set by HS code + origin (USITC HTS / UK Trade Tariff / EU TARIC)
MFN / third-country rate	The default applied rate when no preferential trade agreement covers the origin (WTO; UK Global Tariff)
De minimis	Value threshold below which a shipment enters duty-free (and sometimes tax-free) (CBP; EU; gov.uk)
Ad valorem duty	Duty charged as a % of customs value, vs a "specific" per-item flat charge (CBP)
Reciprocal tariff	Country-specific surcharge above a baseline rate, used in the 2025 US IEEPA actions (Congress.gov CRS)

Standard (base) apparel duty rates — line-level, verified

These are the standard MFN/third-country duty rates before any 2025–26 policy surcharges:

UK — a cotton T-shirt (commodity 6109100010) carries a 12.00% UK Global Tariff third-country (MFN) duty; FTA partners may qualify for 0% under rules of origin — gov.uk UK Integrated Online Tariff, primary, line-level (as-of 2026-06-28). This confirms the "~12% UK" figure carried unverified from runs 125–126.
EU — apparel is classified under Combined Nomenclature Ch 61/62 (T-shirts under CN 6109); each CN-8 code carries its own rate via TARIC. The carried "~12% cotton" figure is consistent with WTO EU clothing averages but was not confirmed at the CN line level this run — EU Taxation & Customs, primary (definition); rate unverified at line level.
US — apparel sits in HTS Chapters 61/62, with Chapter 62 lines including rates such as 6.2%, 8.5% and 9.4% by garment/material; cotton knit T-shirts fall under heading 6109 — USITC HTS, primary. The carried "0–32%" upper bound was NOT confirmed; base apparel duties typically sit in the ~6–17% band, but a specific 32% line could not be pulled this run — flag as unverified ceiling.

US effective apparel tariff (base duty + 2025–26 surcharges)

Distinct from the base MFN duty above, the effective average tariff actually paid on US apparel imports (HS 61+62) climbed sharply through the 2025 policy actions:

Jan 2025 14.7% → Apr 20.2% → May 23.8% → Jun 25.4% → Jul 2025 26.4% → Dec 2025 35.1% (a multi-decade high) — Sheng Lu / FASH455 (University of Delaware, academic, citing USITC trade data), secondary/academic (as-of 2026-06-28).
Even traditional US FTA partners are affected: CAFTA-DR members now face ~10% applied tariffs, while Mexico still enjoyed ~1.6% in Jul 2025 — Sheng Lu / FASH455 (as-of 2026-06-28).

Base MFN apparel duties are ~6–17% (USITC HTS / WTO, primary) but the effective average paid on US apparel reached 26.4–35.1% in H2 2025 (Sheng Lu / FASH455, academic) once the IEEPA "reciprocal" and later surcharges are stacked on top. Not a true source disagreement — it is the difference between the schedule rate and the all-in rate after 2025–26 policy tariffs.

De minimis — the 2025–26 sea change

De minimis thresholds (below which low-value parcels historically entered duty-free) were a core enabler of cross-border DTC and are being dismantled across all three jurisdictions:

United States — the $800 de minimis was suspended:

First closed for China-origin goods in April 2025 — White House fact sheet, primary (as-of 2026-06-28).
Then suspended for ALL countries via Executive Order 14324 (signed 30 Jul 2025), with CBP enforcement from 29 Aug 2025 — CBP + Federal Register (2025-08-05), primary. Shipments ≤$800 are now subject to applicable duties rather than entering free.
Continued by a further presidential action in Feb 2026; from 28 Feb 2026 only the ad valorem duty methodology may be used for international postal shipments (the flat per-item "specific duty" postal option was phased out) — White House + Federal Register (2026-04-09) + CBP FAQ, primary (as-of 2026-06-28).

Runs 125–126 carried the claim that US de minimis "ended 29 Aug 2025." CBP/White House language is consistently "suspending duty-free de minimis treatment" — a suspension of the duty-free benefit, not a repeal of the $800 statutory threshold itself Federal Register 2025-08-05. The date is correct; the word "ended" is imprecise.

European Union — the €150 customs-duty exemption is being abolished:

Historically, parcels under €150 from a third country were exempt from duty but VAT was always due (plus a customs declaration) — EU Taxation & Customs, primary. This confirms the carried "€150 duty-free but VAT always due" claim as the historical rule.
From 1 Jul 2026, the €150 duty exemption is abolished; a temporary EUR 3 flat customs duty per item applies to distance-sale imports in consignments ≤ €150, in force until 1 Jul 2028, after which normal duties apply by product type — EU Taxation & Customs (2025-11-13 / 2026-06-08), primary (as-of 2026-06-28). The IOSS VAT regime is unchanged.

Effective 1 Jul 2026 (≈3 days after this page was written), the €150 duty exemption is removed. Any reliance on "EU parcels under €150 are duty-free" must be hard-dated to before 2026-07-01.

United Kingdom — duty is relieved on commercial consignments ≤ £135 (excl. excise); since the 2021 reform, import VAT on ≤£135 consignments is collected at point of sale by the seller/marketplace rather than at the border; gift relief up to £39 remains — gov.uk, primary. At Autumn Budget 2025 the UK announced removal of the £135 low-value import duty relief by March 2029 at the latest (consultation Nov 2025) — gov.uk, primary (as-of 2026-06-28).

The 2025–26 US tariff legal saga (highly volatile — in active litigation)

They are two distinct legal bases, not one instrument:

The "10% baseline" originated as an IEEPA measure (April 2025): tariffs of at least 10% on almost all partners plus higher country-specific "reciprocal" rates — Congress.gov CRS R48549, secondary/quasi-primary.
The Supreme Court ruled IEEPA did not authorise these tariffs (major-questions doctrine); they were replaced by a 10% surcharge under Section 122 of the Trade Act of 1974, effective 24 Feb 2026 — Congress.gov CRS LSB11398 (quasi-primary) + White & Case (secondary).

Section 122 details (secondary sources, verify against primary EO/Federal Register before relying):

Statutorily capped at 150 days → set to terminate 24 Jul 2026; applies uniformly to all countries with a USMCA exception — White & Case, secondary (as-of 2026-06-28).
A 7 May 2026 Court of International Trade decision held the 10% Section 122 global tariffs unlawful (no qualifying balance-of-payments deficit) — Global Trade Alert, secondary. Whether it is stayed/appealed/still collected as of 2026-06-28 is unclear and changing fast.

What this means for landed cost

Tariffs and duties are the most volatile component of Landed Cost; the 2025–26 actions raised the effective US apparel rate from ~14.7% to ~35.1% in under a year (Sheng Lu / FASH455) and removed the de minimis channel that previously let low-value parcels bypass duty in the US (from Aug 2025) and the EU (from Jul 2026). The base-rate schedule lookups (HS Code Classification → USITC HTS / UK Trade Tariff / EU TARIC) remain the starting point, but the surcharge layer on top is now the dominant swing factor in apparel import economics.

Gaps / open items

Exact WTO clothing-average percentages not pulled — the US_e.pdf / CE_e.pdf WTO profiles and the EU CN 6109 / US HTS 32% line were identified but not fetched at figure level (PDF + JS-rendered tools returned empty to WebFetch). UK 6109 (12.00%) is the only line-level rate verified this run.
Section 122 primary text not fetched — 10% / 24-Feb / 24-Jul / CIT-ruling details are from White & Case + Global Trade Alert (secondary); the underlying proclamation/Federal Register notice should be confirmed before relying.
Country-specific "reciprocal" rates (the above-10% IEEPA per-country rates) not enumerated.
Practitioner streams down — Reddit MCP and YouTube/Apify actor not connected, so no operator counter-narrative on surprise duty bills, tariff engineering, or DDP gotchas.
Running UNIQLO-Europe gap: UK/EU coverage is method-level (de minimis, VAT mechanics, UK 12% line) but no EU/UK fashion-primary effective-rate benchmark equivalent to the US FASH455 series.