All merchandise arriving in the United States must clear Customs and is subject to a Customs duty unless specifically exempted by law. Clearance involves a number of steps: entry, inspection, appraisement, classification and liquidation.
The dutiable value of the merchandise must be declared. The final appraisement is fixed by Customs. Several different appraisement methods may be used to arrive at this value. Transaction value, the most common method, is the price actually paid or payable by the buyer to the seller for the goods imported. Other charges may also add to the dutiable value of merchandise, such as packing costs, selling commissions, royalty or licensing fees, etc.
The classification number of the merchandise being imported must be determined. The Harmonized Tariff Schedule of the United States (HTSUS), issued by the United States International Trade Commission, prescribes the classification of merchandise by type of product; e.g., animal and vegetable products, textile fibers and textile products.
Estimated duties and processing fees if applicable must be paid. Customs makes the final determination of the correct rate of duty. The duty rate of an item is tied to its classification number. The HTSUS provides several rates of duty for each item: general rates for countries with which the U.S. maintains normal trade relations (NTR); special rates for special programs (free, or lower than the rates currently accorded NTR countries); and column 2 rates for imports not eligible for either general or special rates.