Tariff Engineering and Product Redesign
Redesign products to qualify for lower tariff classifications — legal, effective, and widely practiced
- Tariff Engineering and Product Redesign
- Legal Boundaries of Tariff Engineering
- Case Studies in Successful Tariff Engineering
Tariff Engineering and Product Redesign#
Tariff engineering means modifying a product's design, material composition, or assembly sequence to qualify for a lower-duty HTS classification. Example: a polyester jacket with a cotton lining might face 27% duty; add enough cotton to the outer shell and it reclassifies as cotton (16% duty). Savings: 11% on every unit.
Legal Boundaries of Tariff Engineering#
Tariff engineering is legal when the product genuinely changes classification through material modification. It becomes illegal when changes are cosmetic or reversed after importation. The test: would a customs officer examining the product agree it belongs in the claimed classification? If the modification is genuine and permanent, it's legitimate.
Converse moved shoe eyelets to the sole, reclassifying shoes from 37.5% to 8.5% duty.
Case Studies in Successful Tariff Engineering#
Converse moved shoe eyelets to the sole, reclassifying shoes from 37.5% to 8.5% duty. Peanut butter imported with sugar content above 65% classifies as confectionery (5%) rather than peanut preparation (17%). A lighting company added a timer, reclassifying from 3.9% to 2.8%. Small design changes, massive duty savings.
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- Redesign products to qualify for lower tariff classifications — legal, effective, and widely practiced
People also ask
What is the business impact of tariff engineering and product redesign?
Redesign products to qualify for lower tariff classifications — legal, effective, and widely practiced
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