Will Your Customs Duties Drop Under TPP?
By: Steve Craven
You have likely seen that foreign tariffs for U.S. products will drop, many going to zero, for 18,000 different American products if the Trans Pacific Partnership is implemented by the United States and its TPP negotiating partners. That’s great, but what will it do for the products that your company sells? It just became easy to find out.
When the TPP was first brought back last fall, you had to wade through hundreds of pages of tariff reductions to find out what it meant for your product. Now there is an easy way – at least for non-agricultural products. The U.S. Department of Commerce has created a marvelous searchable database that shows current and pending customs duties for individual products in each of the TPP member countries. You can find the Free Trade Agreement (FTA) Tariff Tool at www.export.gov/fta/ftatarifftool/TariffSearch.aspx. Use a dropdown menu to select the country you want to know about and then add your product’s Harmonized System (HS) number (or Schedule B number), and you have everything you need. (If you don’t know your HS numbers, go to uscensus.prod.3ceonline.com to figure them out.)
As an example, I checked New Zealand’s tariff for U.S.-built surfboards. First I had to identify the HS number (95062900) which took a couple minutes. Then I plugged that into the FTA Tariff Tool with New Zealand, and instantly discovered that New Zealand’s current customs duty is 5%. But I also see that New Zealand will gradually cut that duty once TPP is implemented, taking seven years to bring it down to zero.
The U.S. Department of Agriculture is working on a parallel tool that will cover agricultural and food products, but they are not as far along yet. They call it the Agricultural Tariff Tracker and it can be found at apps.fas.usda.gov/agtarifftracker/Home/Search. Right now, it only seems to have tariff data for some Latin American countries and South Korea. I hear that the TPP countries will be added shortly, so it will be worth checking back. Seems to work the same way as Commerce’s FTA Tariff Tool.
Both tariff databases address more than just the duties faced by U.S. products overseas. A U.S. importer can use them, for instance, to check U.S. customs duties on products being brought in from countries with which we have FTAs.
And both databases cover (or will cover) customs duties from all of the FTAs to which we are a party – not just the coming cuts that result from the TPP. That means you can find out the duties you can expect to face when shipping to places like South Korea, Morocco or Israel – not just the 12 TPP countries.
Steve Craven advises companies on international business strategies and how to overcome problems encountered in foreign markets. He is a former consultant, American diplomat and a U.S. trade negotiator. He served as a Career Diplomat and Senior Foreign Service Officer, member of the U.S. Commercial Service, U.S. Department of Commerce. Mr. Craven also previously served as Chair of the Hawaii Pacific Export Council.