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Tariff Glossary

This glossary defines key terms used in international trade, tariff classification, and customs compliance. These definitions are intended to help you understand the terminology used throughout the TariffBase platform and in tariff-related documents.

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A | B | C | D | F | G | H | I | M | N | P | R | S | T | W

A

Ad Valorem Duty

A tariff rate expressed as a percentage of the customs value of the imported goods. For example, a 10% ad valorem duty on goods valued at $1,000 results in a $100 duty payment. This is the most common type of tariff.

Anti-Dumping Duty

A special tariff imposed on imported goods that are sold at a price below fair market value in the importing country (known as "dumping"). Anti-dumping duties aim to protect domestic industries from unfair price competition. They are typically imposed after an investigation by the importing country's trade authority.

Applied Tariff Rate

The tariff rate that a country actually charges on imports, which may be lower than its bound rate. Countries often apply lower rates than their WTO-bound ceilings to encourage trade while retaining policy flexibility.

B

Bound Tariff Rate

The maximum tariff rate a WTO member has committed not to exceed. Bound rates are negotiated during WTO rounds and recorded in each country's schedule of commitments. A country may apply tariffs at or below the bound rate but cannot exceed it without providing compensation to affected trading partners.

C

Countervailing Duty

A tariff imposed to offset government subsidies that foreign producers receive, which give them an unfair cost advantage. Countervailing duties level the playing field for domestic producers by neutralizing the effect of the subsidy.

Customs Union

A trade arrangement in which member countries eliminate tariffs among themselves and apply a common external tariff (CET) on imports from non-member countries. The European Union is the most well-known example.

Customs Value

The value assigned to imported goods for the purpose of calculating ad valorem duties. Customs value is typically based on the transaction value (the price actually paid or payable for the goods), subject to adjustments specified in the WTO Customs Valuation Agreement.

D

Duty Drawback

A refund of customs duties paid on imported goods that are subsequently re-exported or used in the manufacture of goods for export. Duty drawback programs help exporters avoid the cost burden of import duties on materials they use in export production.

Duty Stacking

The accumulation of multiple tariff rates that apply simultaneously to a single import. For example, a product may be subject to an MFN rate plus a Section 301 additional tariff plus an IEEPA surcharge. TariffBase displays stacked duties clearly in search results so you can see the total duty burden.

F

Free Trade Agreement (FTA)

An agreement between two or more countries to reduce or eliminate tariffs and other trade barriers on goods traded among them. Examples include USMCA (US-Mexico-Canada Agreement), the EU's network of FTAs, and China's RCEP participation. FTA rates are typically lower than MFN rates.

G

GATT (General Agreement on Tariffs and Trade)

The multilateral agreement that governed international trade in goods from 1948 to 1995. GATT was replaced by the World Trade Organization (WTO) in 1995, but its principles remain the foundation of the multilateral trading system.

GSP (Generalized System of Preferences)

A system under which developed countries grant preferential tariff rates (often zero duty) to imports from qualifying developing countries. GSP programs are unilateral and can be modified or revoked by the granting country.

H

Harmonized System (HS)

The internationally standardized nomenclature for classifying traded goods, maintained by the World Customs Organization (WCO). The HS uses a 6-digit code structure that is common across all participating countries. National tariff schedules extend this to 8 or 10 digits for more granular classification.

HS Code

A numeric code from the Harmonized System that identifies a specific category of traded goods. HS codes determine which tariff rates, trade measures, and regulatory requirements apply to a product. In TariffBase, you can look up HS codes using the HS Finder tool or search for tariff rates using the Search tool.

I

IEEPA (International Emergency Economic Powers Act)

A US federal law that grants the President authority to regulate international commerce during a declared national emergency. In the trade context, IEEPA has been used as the legal basis for imposing additional tariffs on imports from specific countries.

M

MFN Rate (Most Favored Nation)

The standard, non-discriminatory tariff rate that a WTO member applies to imports from all other WTO members. Under the MFN principle, a country must grant the same favorable terms to all WTO members equally, unless a specific preferential arrangement (such as an FTA) applies. The MFN rate serves as the baseline rate in TariffBase search results.

N

Non-Ad Valorem Duty

A tariff rate that is not expressed as a percentage of the goods' value. Types include:

  • Specific duty -- a fixed amount per unit of quantity (e.g., $0.05 per kilogram)
  • Compound duty -- a combination of ad valorem and specific rates (e.g., 5% + $0.02/kg)
  • Mixed duty -- the higher or lower of an ad valorem rate or a specific rate

Non-Tariff Measures (NTMs)

Trade restrictions that affect imports without using tariffs. Common NTMs include:

  • Import quotas and licensing requirements
  • Sanitary and phytosanitary (SPS) measures
  • Technical barriers to trade (TBT)
  • Rules of origin requirements
  • Anti-dumping and countervailing investigations

P

Preferential Tariff

A tariff rate that is lower than the MFN rate, granted to specific countries under trade agreements, preference programs (like GSP), or customs unions. Preferential tariffs are designed to foster closer economic ties, support development goals, or implement reciprocal trade liberalization.

R

Rules of Origin

Criteria used to determine the country of origin of a product for customs and trade purposes. Rules of origin are particularly important for determining eligibility for preferential tariff rates under FTAs and other trade agreements.

Retaliatory Tariff

A tariff imposed by one country in response to tariff actions by another country. Retaliatory tariffs are common in trade disputes and can escalate as countries respond to each other's measures. The TariffBase Regulatory Tracker chronicles these actions chronologically.

S

Safeguard Duty

A temporary tariff increase (or import quota) designed to protect a domestic industry from serious injury or threat of injury caused by a surge in imports. Safeguard measures are authorized under WTO rules (Article XIX of GATT) and are typically time-limited.

Section 301 (US)

A provision of the US Trade Act of 1974 that authorizes the President to take trade-restrictive actions against countries engaged in unfair trade practices. Section 301 tariffs on Chinese goods have been a significant feature of recent US trade policy and are tracked in TariffBase.

T

Tariff

A tax or duty imposed by a government on goods crossing a national border, most commonly on imports. Tariffs serve as a source of government revenue and/or as a protective measure for domestic industries.

Tariff Escalation

A tariff structure in which duty rates increase with the level of processing. Raw materials face low or zero tariffs, semi-processed goods face moderate tariffs, and finished products face the highest tariffs. Tariff escalation can discourage manufacturing in exporting countries.

Tariff Line

A specific product classification in a national tariff schedule, identified by its full national HS code (typically 8 or 10 digits). Each tariff line has its own set of applicable duty rates.

Tariff Rate

The rate at which a customs duty is charged, typically expressed as a percentage of value (ad valorem) or as a specific amount per unit. In TariffBase, tariff rates are displayed with their associated regime, effective dates, and source references.

Tariff Rate Quota (TRQ)

A two-tier tariff system that allows a specified quantity of goods to be imported at a lower in-quota rate, while imports exceeding the quota face a higher out-of-quota rate. TRQs are common in agricultural trade.

Tariff Regime

The overall framework of tariff rules that a country applies, encompassing MFN rates, preferential arrangements, additional duties, trade defense measures, and other policies. In TariffBase, the Schedule Browser's Show Schemes feature displays all regimes applicable to a country's schedule.

TARIC (Integrated Tariff of the European Communities)

The EU's integrated tariff database, which combines the Common Customs Tariff with all applicable trade measures, preferences, quotas, and suspensions. TariffBase sources EU data from the TARIC system.

W

WTO (World Trade Organization)

The international organization that oversees multilateral trade rules, provides a forum for trade negotiations, and adjudicates trade disputes between member countries. The WTO's rules, including the MFN principle and bound tariff commitments, form the foundation of the global trading system.