A tariff is not charged to the exporting country. It is paid by the importer of record to the customs authority of the importing country, and the amount depends on three separate determinations. Rules and rates vary by jurisdiction and change over time.
Classification decides which rate applies
Every traded good is assigned a code from an internationally harmonised system, and the duty rate attaches to the code rather than to the product description on the invoice.
Classification is often contested, because small differences in composition or intended use can move an item into a category with a materially different rate.
Importers can request a binding ruling in advance, which fixes the classification for future shipments and removes the risk of a reassessment later.
Valuation is a separate exercise
Duty is usually charged on a declared value, and the rules specify what that value includes, typically the transaction price with certain adjustments.
Freight and insurance may or may not be included depending on the jurisdiction, which is why the same shipment can attract different duty in different countries at identical rates.
Related-party transactions receive particular scrutiny, since a price set within a corporate group is not the result of arms-length negotiation.
Origin is determined by rules, not by shipping route
Where goods come from is decided by rules of origin, which look at where substantial transformation occurred rather than at the last port of departure.
Those rules matter most where preferential rates exist under a trade agreement, since claiming a preference requires documentation demonstrating the origin criteria are met.
Goods assembled from components made in several countries are the difficult case, and the rules set thresholds for how much processing confers origin.
Payment happens before release
An entry is filed, duty is calculated and payment or a bond is provided before the goods are released, which is why customs delays translate directly into inventory sitting at a port.
Brokers file on behalf of most importers, but liability remains with the importer of record, who carries responsibility for the accuracy of the declaration.
Authorities audit after release rather than checking everything at the frontier, and an audit can reassess entries going back years, with interest and penalties attached.
The cost travels down the chain
Because the importer pays, the duty enters the landed cost of the goods and is then reflected in wholesale and retail prices to whatever extent the market allows.
Where competition is intense, part of the increase is absorbed in margins instead, so the distribution of the burden depends on conditions rather than on the rate alone.
Firms also respond by changing where they source or how they process goods, which is why the pattern of trade shifts even when the volumes involved appear stable.