Tariffs have become a moving target for US manufacturers that buy imported parts or materials. Rates change, new measures are announced and older ones are adjusted. You cannot control trade policy, but you can understand your exposure and make better decisions about it. This article covers the main options, from simple checks to longer-term sourcing changes.
Step 1: Map your exposure
You cannot reduce what you have not measured. Start by building a simple list of imported purchased parts, including:
- Part number, description and supplier
- Country of origin
- The tariff classification (HTS code) used on entry
- Annual quantity and value
- The duty rate applied, including any additional tariffs
Your customs broker can usually provide entry data, and your ERP holds the purchase volumes. Combining the two shows which parts carry the most duty in total. Often a small number of parts accounts for most of the exposure, which tells you where to focus. Our free tariff cost calculator can help you test scenarios for individual parts.
Step 2: Check classification
Every imported product is classified under the Harmonized Tariff Schedule of the United States, and the classification determines the duty rate. Errors happen, especially when a part was classified years ago or when a supplier’s description is vague. A review with a qualified broker can confirm whether each code is correct. If there is genuine uncertainty, US Customs and Border Protection offers binding rulings that give you a formal answer.
Classification must reflect what the product actually is. The aim is accuracy, not choosing the code with the lowest rate.
Step 3: Understand country of origin
Duty can depend on where a product is considered to originate, and the rules for this are technical. Free trade agreements, such as the United States-Mexico-Canada Agreement, can offer reduced or zero duty for qualifying goods, but only if the origin rules are met and documented. CBP publishes guidance on trade agreements. Ask your suppliers what origin documentation they can provide.
Step 4: Look at duty programs
Some programs can reduce or recover duty in specific situations:
- Duty drawback: in some cases, duty paid on imported goods can be partly recovered when the goods, or products made from them, are exported. See CBP’s drawback overview.
- Foreign-trade zones: FTZs can defer, reduce or in some cases remove duty for goods processed within a zone. See the Foreign-Trade Zones Board.
These programs involve paperwork and compliance costs, so they make sense for some businesses and not for others. Your exposure map helps you judge whether the numbers justify the effort.
Step 5: Review sourcing options
For parts with heavy and lasting exposure, sourcing changes may be worth studying. Options include a supplier in a different country, a domestic supplier or a redesign that uses different materials. Each option has trade-offs in price, quality, lead time and qualification effort. Compare them on total landed cost, not just unit price. Our supplier diversification guide and reshoring vs nearshoring checklist go into more detail.
Step 6: Reflect duty in pricing and planning
Even if you cannot reduce a tariff, you can manage its effect. Make sure your product costs include current duty, review customer pricing where contracts allow, and consider the cash impact of duty paid on inventory that sits for months. Tracking changes in Supply Chain Watch can help you see changes coming.
Prepare for refunds and changes
Trade measures are sometimes challenged or changed, and refunds can depend on good records. Keeping entry data organized makes it easier to act if an opportunity arises. See our tariff refund readiness page.
How we help
We build the exposure map from your purchase and entry data, rank parts by duty impact and single-supplier risk, and model sourcing scenarios. We work alongside your broker or trade attorney, who remain responsible for legal and customs advice. Free call first, scope agreed before we start.
For the wider picture, see our procurement and tariff guide.
Frequently asked questions
Can a consultant tell us which HTS code to use?
No. Classification decisions should be made with a licensed customs broker or trade attorney. We help by organizing the data and showing where the duty exposure is, so your broker can focus on the parts that matter most.
How often should we review tariff exposure?
At least quarterly, and whenever a significant trade measure is announced. Keeping your exposure map current makes those reviews much quicker.
Is moving suppliers always the best response?
No. Moving supply takes time and brings new risks. For many parts, checking classification, documenting origin or adjusting pricing is the more practical first step.
Where can we follow tariff news?
Our weekly Supply Chain Watch summarizes trade and supply news for manufacturers, with links to the original sources.