Understanding the Tariffs and Customs Fees of Your Destination Country

Overview of Tariffs and Customs Fees

When moving abroad, it can be difficult to understand all the fees associated with your new destination – but in this article, we’ve made it simple.  

Tariffs and customs fees are charges imposed on goods that are imported or exported from one country to another. These charges are levied by the government and are designed to protect local industries, regulate trade, and generate revenue for the state. Tariffs and customs fees are crucial tools of international trade, and they have a significant impact on the global economy.  

What are Tariffs and Customs Fees?

Tariffs are taxes that are imposed on goods that are imported or exported from one country to another. These taxes are usually charged as a percentage of the value of the goods being imported or exported. The purpose of tariffs is to protect domestic industries and they are used to generate revenue for the government.  

Customs fees, on the other hand, are charges that are imposed by customs authorities when goods cross a border. Customs fees are usually calculated based on the weight, volume or value of the goods being imported or exported.  

Why are Tariffs and Customs Fees Imposed?

Tariffs and customs fees are imposed for a variety of reasons. One of the primary reasons for imposing tariffs is to protect domestic industries. When a country imposes tariffs on imported goods, it makes those goods more expensive, thereby making domestically produced goods more competitive. This can help protect local industries from foreign competition and support domestic employment.  

Tariffs can also be used as a tool to regulate trade. For example, a country might impose a tariff on goods from a particular country in response to trade practices that it considers unfair. This can include practices, such as dumping, where foreign companies sell goods at prices below the cost of production to gain market share.  

Customs fees are imposed to cover the costs of regulating trade and enforcing regulations. Customs authorities are responsible for inspecting goods, enforcing import and export regulations, and collecting taxes and duties. Customs fees are charged to cover the cost of these services.  

Types of Tariffs

There are several types of tariffs that can be imposed on imported or exported goods. These include: 

• Ad Valorem Tariffs: Ad valorem tariffs are based on the value of the goods being imported or exported. For example, a country might impose a 10% ad valorem tariff on all imported cars.  
• Specific Tariffs: Specific tariffs are based on a specific unit of measurement such as weight or volume. For example, a country might impose a specific tariff of $10 per pound on imported coffee.  
• Compound Tariffs: Compound tariffs are a combination of ad valorem and specific tariffs. For example, a country might impose a tariff of 10% ad valorem plus $5 per pound on imported cheese.  
• Tariff Quotas: Tariff quotas are a two-tier system where a lower tariff rate is applied to a certain quantity of imports, after which a higher tariff rate is applied. For example, a country might impose a tariff of 5% on the first 1,000 tons of imported wheat, after which a tariff of 10% is applied to any additional imports.  

Types of Customs Fees

There are several types of customs fees that can be charged when goods cross a border. These include: 

• Import Duty: Import duty is a tax that is charged on imported goods. It is usually based on the value of the goods being imported.  
• Excise Duty: Excise duty is a tax that is charged on specific goods such as alcohol, tobacco, and gasoline.  
• Value-Added Tax (VAT): Value-added tax is a tax that is charged on the value added to a product. 

How Tariffs and Customs Fees Work

Tariffs and customs fees are charges that are imposed on goods that are imported or exported from one country to another. These charges can have a significant impact on the cost of goods and services, as they add to the final price of the product.  

Calculation of Tariffs

Tariffs are calculated based on the value of the goods being imported or exported. The calculation of tariffs can vary depending on the type of tariff being imposed.  

Ad valorem tariffs are calculated as a percentage of the value of the goods being imported or exported. For example, if the ad valorem tariff on imported cars is 10%, and the value of a car being imported is $20,000, the tariff charged would be $2,000.  

Specific tariffs are calculated based on a specific unit of measurement such as weight or volume. For example, if the specific tariff on imported coffee is $10 per pound, and 100 pounds of coffee are being imported; the tariff charged would be $1,000.  

Compound tariffs are a combination of ad valorem and specific tariffs. For example, if the compound tariff on imported cheese is 10% ad valorem plus $5 per pound, and 50 pounds of cheese are being imported with a value of $1,000, the tariff charged would be $550 [($1,000 x 10%) + ($5 x 50 kg)].  

Tariff quotas are a two-tier system where a lower tariff rate is applied to a certain quantity of imports, after which a higher tariff rate is applied. For example, if the tariff quota on imported wheat is 5% on the first 1,000 tons, after which a tariff of 10% is applied to any additional imports, and 1,200 tons of wheat are being imported, the tariff charged would be $55,000 [($1,000 x 5%) + ($200 x 10%)].  

Calculation of Customs Fees

Customs fees are calculated based on the services provided by customs authorities when goods cross a border. These fees can vary depending on the country and the specific services being provided. Import duty is a tax that is charged on imported goods, and it is usually based on the value of the goods being imported. Excise duty is a tax that is charged on specific goods such as alcohol, tobacco, and gasoline. Value-added tax (VAT) is a tax that is charged on the value added to a product at each stage of production and distribution.  

The Impact of Tariffs and Customs Fees 

Tariffs and customs fees can have a significant impact on the cost of goods and services. When tariffs are imposed on imported goods, it makes those goods more expensive, which can result in higher prices for consumers. This can be particularly challenging for low-income consumers who may struggle to afford basic goods. Customs fees can also add to the cost of goods and services. When goods are imported or exported, customs authorities charge fees for services such as processing paperwork, inspecting goods, and enforcing regulations. These fees can add up quickly, especially for businesses that import or export large quantities of goods.  

Tariffs and customs fees can also have an impact on international trade. When countries impose tariffs on goods from other countries, it can lead to trade disputes and retaliation. This can result in higher prices for consumers, reduced competition, and a slowdown in global economic growth.  

Therefore, it is always positive to have a forward-thinking process – check with your designated country and gather information on if their customs or tariffs fees will remain the same for the near future. For further information on customs regulations for specific countries, please visit our Moving Guides section.   

Exemptions and Waivers

While tariffs and customs fees can add to the cost of goods and services for travelers, there are exemptions and waivers available that can reduce or eliminate these charges.  

Duty-Free Allowances

Duty-free allowances allow travelers to bring a certain amount of goods into a country without having to pay tariffs or customs fees. These allowances vary depending on the country, the mode of transportation, and the type of goods being imported. Duty-free allowances can also vary depending on the type of goods being imported. For example, many countries have higher duty-free allowances for alcohol and tobacco products.  

Temporary Imports

Temporary imports allow travelers to bring goods into a country for a limited period without having to pay tariffs or customs fees. These types of imports are often used for goods such as exhibition materials, professional equipment, or personal items that will be used during a short-term stay. Temporary imports usually require a deposit or guarantee to ensure that the goods will be exported within the designated timeframe. If the goods are not exported within the specified time, the deposit or guarantee will be forfeited, and the traveler will be required to pay tariffs and customs fees.  

Special Exemptions

Special exemptions may be available for certain types of goods, such as cultural artifacts, endangered species, or medical equipment. These exemptions are designed to promote certain cultural, scientific, or humanitarian objectives. For example, many countries have special exemptions for cultural artifacts that are being brought into the country for exhibition or research purposes. These exemptions may require specific documentation or permits, and travelers should be aware of the regulations in the country they are visiting before attempting to import these types of goods.  

Resources for Travelers

Navigating the world of tariffs and customs fees can be complicated for travelers, but there are many resources available to help.  

Government Websites

One of the best resources for information about tariffs and customs fees is the government website of the country you are visiting. These websites will have information about the regulations and requirements for importing goods into the country, including the tariffs and customs fees that may be charged. For example, in the United States, the U.S. Customs and Border Protection website has detailed information about tariffs, duty rates, and customs procedures.  

Travel Guides

Travel guides can also be a useful resource for information about tariffs and customs fees. Many travel guides include sections on customs regulations and duty-free allowances for different countries. These guides can be especially helpful for travelers who are planning to bring back souvenirs or other goods from their travels.  

Customs Brokers

Customs brokers are professionals who specialize in customs regulations and procedures. They can help travelers navigate the customs process and ensure that they are complying with all the regulations and requirements for importing goods into a foreign country. Customs brokers can also help travelers calculate the tariffs and customs fees that they will be required to pay.  

Online Resources

In addition to government websites, travel guides, and customs brokers, there are many online resources that can help travelers learn more about tariffs and customs fees. Websites like Travel.gc.ca provide information about customs regulations and duties for different countries around the world. There are also forums and discussion boards where travelers can share information and advice about navigating the customs process in different countries.  

Allow Atlas International to Move You New Places

At Atlas International, we provide full-service moving, expert international knowledge, and supportive customer service. Our professional moving experts can help make your international move seamless and stress-free. We offer a range of services, including packing, loading, transportation, and delivery, as well as customs clearance and insurance options.  

Trust Atlas International to handle your move with care and efficiency. With moving companies in all 50 U.S. states, over 130 movers across Canada, and 400+ Atlas-preferred moving companies in every country worldwide, you can rest assured that you’re in capable hands. We provide competitive rates, expert packing services, and timely delivery. Get your free quote today and see the Atlas difference.