A tariff on imported goods is paid by the American company bringing them in, at the moment the shipment enters the country. That collection point shapes almost everything about how tariffs work in practice.
The importer of record owes the money
Every shipment entering the United States has an importer of record, the party legally responsible for declaring it accurately and paying whatever duties apply. That party is almost always a domestic business.
Customs and Border Protection collects the duty as a condition of release. The goods cannot legally enter commerce until the entry is filed and the payment is arranged or bonded.
Whether the cost ends up with the importer, the foreign supplier or the American shopper depends on negotiation and market power afterward. The legal obligation, however, sits squarely with the importer.
Classification determines the rate
Rates are set against a lengthy schedule of tariff codes covering every category of goods. A product must be classified into one specific line before any rate can be applied to it.
Distinctions can be extremely fine. Whether a garment is knitted or woven, or whether a footwear upper is mostly leather or textile, can move an item into a different rate entirely.
Importers may request a binding ruling in advance to confirm how a product will be classified, which reduces the risk of an expensive disagreement long after the goods have been sold.
Origin is separate from where it shipped
The country of origin is the country where the goods were produced or substantially transformed, which is not necessarily the port they departed from or the address of the seller.
Substantial transformation is the usual test: the processing must change the article into a new item with a different name, character or use rather than merely assembling parts.
Because rates and trade remedies vary by origin, this determination is frequently contested, and customs devotes considerable enforcement attention to shipments routed to obscure their true source.
Valuation supplies the base
Most duties are calculated as a percentage of the declared value, generally the price actually paid for the goods, with specified additions and exclusions applied to that figure.
Some products carry specific duties instead, charged per unit of weight or quantity, and a few carry compound rates combining both approaches within a single tariff line.
Freight and insurance are typically excluded from the American customs value, which differs from the practice in many other countries and affects how importers structure their contracts.
Programs and exclusions sit on top
Trade agreements and preference programs can reduce or eliminate duties for qualifying goods, but the importer must document that the product meets the specific rules of origin involved.
Foreign trade zones and duty drawback offer other routes, deferring payment until goods leave the zone or refunding duties on merchandise that is subsequently exported again.
These mechanisms carry recordkeeping obligations that only larger importers tend to sustain, which is one reason a tariff change lands differently on small firms than on established ones.