Import duties on Chinese goods are the single largest controllable cost for most US importers right now.

The effective duty rate on Chinese-origin goods — combining base MFN rates, Section 301 surcharges and the current Section 122 import surcharge — ranges from 22.5% to over 60% depending on your product category.

For a company importing $1 million of Chinese goods annually at a 35% effective rate — that is $350,000 per year in duty costs.

Most importers accept this number as fixed. It is not.

Here are six specific actions that can reduce it.

Action 1 — Verify your HS codes are correct

Every product you import is classified under a 10-digit Harmonized System code. That code determines your duty rate. If the code is wrong, your duty rate is wrong — and almost always higher than it should be.

HS code misclassifications are more common than most importers realize. Suppliers in China classify products for Chinese export schedules, not US import schedules. The codes they put on commercial invoices are frequently incorrect for US tariff purposes.

We find HS code misclassifications in approximately 40% of product lists we review. Each misclassification is either costing you money or creating a compliance risk.

Check your HS codes against the US HTS Schedule at hts.usitc.gov. Look up each product description and compare the result to what appears on your import entries. Any discrepancy is worth investigating.

Action 2 — Check your Section 301 exclusion eligibility

USTR has granted product-specific exclusions from Section 301 surcharges since the tariffs were first imposed. 178 China Section 301 exclusions were extended through November 10, 2026 as of December 2025.

If your product is covered by an active exclusion, you pay only the base MFN duty rate — not the 7.5% to 100% Section 301 surcharge.

Search the USTR exclusion database at ustr.gov for your HS codes. This search is free and takes approximately 2 minutes per product. If your product is covered and you have not claimed the exclusion — contact your customs broker immediately.

Action 3 — Apply for a new Section 301 exclusion

If your product is not covered by an existing exclusion, you may be able to apply for one.

The USTR exclusion portal accepts applications from importers who can demonstrate that no comparable US domestic supplier exists and that the Section 301 surcharge causes economic harm. Filing is free. If approved, the exclusion removes the Section 301 surcharge and applies retroactively from your application date.

An active exclusion on a single high-volume product can be worth $50,000 to $200,000 per year in recovered costs.

Action 4 — Evaluate first sale valuation

US import duties are calculated on the value of the goods. If you buy goods through a middleman or trading company, you are paying duties on the marked-up price — not the original factory price.

If your supply chain has multiple tiers, you may qualify for first sale valuation — calculating duties on the factory price rather than the middleman price. For companies with two-tier supply chains, this can reduce dutiable value by 15% to 30%.

Discuss first sale valuation with your licensed customs broker. It requires documentation of the factory transaction but can produce significant ongoing savings.

Action 5 — Review your country of origin documentation

Not all goods from China are Chinese-origin for tariff purposes. If substantial transformation occurs in a third country, the goods may be classifiable as originating from that country — potentially at a much lower duty rate.

This applies particularly to goods with complex manufacturing processes that cross multiple countries. Review your supply chain documentation with your customs broker to determine whether any of your products may qualify for alternative origin determination.

Action 6 — Model alternative sourcing routes

For products where the Section 301 surcharge is the dominant cost driver — and where no exclusion is available — the most effective long-term reduction is a sourcing shift.

Vietnam, India, Bangladesh and Mexico each carry different effective duty rates on different product categories. The question is not simply which country is cheapest — it is which country is cheapest after all applicable duties, freight differentials, lead time costs and quality considerations.

Do this analysis now — before July 24, 2026. After that date, new permanent Section 301 tariffs are expected to change the rate differentials across all sourcing countries significantly.

Getting a complete picture

Running through all six actions across a full product range takes time and technical knowledge. Customs databases are complex. USTR exclusion searches are technical. Origin analysis requires legal input.

Domshark Raqam does this analysis for importers. We take your product list, map every current rate, identify every applicable exclusion, and deliver three specific cost-reduction actions with estimated annual savings.

Fixed price from $1,800. Delivered in 10 business days. Written report with a 45-minute debrief call.

Email saiju@domshark.co with subject line ANALYSIS to start.