International Trade Terms Glossary

80+ terms every importer needs to know — customs, shipping, tariffs, and trade compliance. Written in plain English, not customs-broker jargon.

A

ACE (Automated Commercial Environment)

The CBP electronic data system used to file customs entries, track shipments, process duties, and communicate with importers, brokers, and other government agencies. ACE replaced the legacy ACS system. All US customs entries are filed through ACE.

AD/CVD (Anti-Dumping / Countervailing Duties)

Additional duties imposed on specific products from specific countries when the US Department of Commerce determines they are being sold below fair market value (dumping) or benefit from unfair government subsidies (countervailing). AD/CVD rates are company-specific — two factories making the same product in the same country can have different rates. These duties are in addition to normal MFN tariffs.

AES (Automated Export System)

The electronic system used to file export information with the US government. Required for shipments valued over $2,500 or requiring an export license.

Air Waybill (AWB)

The air freight equivalent of a Bill of Lading — a contract of carriage between the shipper and the airline. Unlike an ocean B/L, an AWB is non-negotiable (it does not convey title to the goods). Issued by the airline or freight forwarder.

ATA Carnet

An international customs document that allows goods to be temporarily imported duty-free for up to one year — used for trade show exhibits, professional equipment, and commercial samples. Covers 80+ countries.

B

Bill of Lading (B/L)

A legal document issued by a carrier to a shipper that details the type, quantity, and destination of goods being carried. It serves as a shipment receipt, a contract of carriage, and a document of title. The ocean B/L is the most common type in international trade.

Bond (Customs Bond)

A financial guarantee required by CBP that ensures duties, taxes, and fees will be paid. Two types: single-entry bond (covers one shipment) and continuous bond (covers unlimited entries for 12 months). Required for all commercial imports valued over $2,500.

Bonded Warehouse

A secure facility where imported goods can be stored without paying duties — duties are deferred until the goods leave the warehouse for domestic consumption. If goods are re-exported directly from the bonded warehouse, no duties are ever paid.

Broker (Customs Broker)

A licensed professional who prepares and files customs entries on behalf of importers. US customs brokers must pass the CBP broker exam and hold a valid license. Brokers classify goods, calculate duties, file entries, and manage CBP communications.

C

CBP (US Customs and Border Protection)

The federal agency responsible for enforcing US customs laws, collecting duties, and securing the border. CBP processes all imports, inspects cargo, assesses tariffs, and enforces trade regulations (FDA, CPSC, USDA, etc.) at ports of entry.

CIF (Cost, Insurance, Freight)

An Incoterm where the seller pays for the goods, insurance, and freight to the destination port. Risk transfers to the buyer once goods are loaded on the vessel, but the seller pays freight and insurance. CIF is the customs valuation basis for the EU, the UK, Japan, Mexico, and most other markets. The United States, Canada, and Australia instead tax the goods value alone, with international freight and insurance excluded.

Continuous Bond

A customs bond that covers all entries at all US ports for 12 months. Minimum bond amount is 10% of total duties/taxes/fees paid in the prior year, with a $50,000 floor. Annual premium typically $250-$1,200 depending on bond amount.

CSMS (Cargo Systems Messaging Service)

CBP's system for issuing operational updates, system outages, and procedural changes to the trade community. CSMS messages are the primary channel for real-time CBP operational announcements.

C-TPAT (Customs-Trade Partnership Against Terrorism)

A voluntary CBP program where importers agree to enhanced supply chain security standards in exchange for reduced examination rates and front-of-line processing. Certified C-TPAT members face 3-5× fewer inspections than non-members.

D

De Minimis

The value threshold below which imported goods enter duty-free and tax-free. The US de minimis ($800 under Section 321) was suspended on 29 August 2025 for every origin, so duty now runs from the first dollar. The EU's €150 customs duty line was replaced on 1 July 2026 by a flat €3 per item at or below €150. Canada has the lowest threshold of the major markets at CAD $20. De minimis is tested on the goods value only in most jurisdictions — shipping costs are excluded.

Duty Drawback

A CBP program that refunds 99% of duties paid on imported goods that are subsequently exported or destroyed. If you import components, assemble them into finished goods, and export those goods, you can recover nearly all the duties you paid on the components. One of the most under-claimed benefits in US trade.

DDP (Delivered Duty Paid)

An Incoterm where the seller assumes all costs, risks, and responsibilities — including import duties and customs clearance — until the goods are delivered to the buyer's door. The most seller-heavy Incoterm.

E

Entry (Customs Entry)

The formal process of filing import documentation with CBP to bring goods into US commerce. Types include: Type 01 (formal consumption entry), Type 06 (FTZ admission), Type 11 (informal entry, ≤$2,500), Type 86 (Section 321 de minimis electronic entry).

Entry Summary (CBP Form 7501)

The document that reports the final classification, valuation, and duty calculation for an import entry. Must be filed within 10 working days of goods' arrival. Duties are payable at the time the entry summary is filed.

EUSt (Einfuhrumsatzsteuer)

The German import turnover tax — effectively VAT on imports. 19% standard rate, calculated on CIF + customs duty. Other EU countries use different names (TVA in France, IVA in Italy, BTW in Netherlands) but the mechanism is identical across the EU customs union.

EXW (Ex Works)

An Incoterm where the seller makes goods available at their premises (factory, warehouse). The buyer bears all costs and risks from that point — loading, freight, insurance, export clearance, and import clearance. The most buyer-heavy Incoterm. Often used when the buyer has their own freight forwarder and wants full control of the logistics chain.

Excise Tax

A separate tax on specific products — alcohol, tobacco, fuel, firearms, and certain luxury goods — that applies in addition to customs duties and VAT. Not modeled by DutyCalc calculators.

F

FCL (Full Container Load)

Ocean freight where your cargo fills an entire container — you pay a flat rate for the box regardless of weight (within limits). More economical than LCL for shipments over ~15 CBM. Standard containers: 20ft (~33 CBM), 40ft (~67 CBM), 40ft High Cube (~76 CBM).

FOB (Free On Board)

An Incoterm where the seller delivers goods to the vessel at the port of origin. The seller pays all costs up to loading; the buyer pays ocean freight, insurance, and all destination costs. FOB is the most common Incoterm for containerized ocean freight. Customs valuation in the US starts from the FOB value — unlike most countries that use CIF.

FTA (Free Trade Agreement)

A treaty between two or more countries that reduces or eliminates tariffs on goods meeting origin requirements. Key US FTAs: USMCA (Canada/Mexico), KORUS (Korea), AUSFTA (Australia). FTAs don't mean zero paperwork — importers must file a claim and maintain origin documentation to benefit.

FTZ (Foreign Trade Zone)

A designated area within the US where foreign goods can be stored, processed, or manufactured without paying duties. Duties are deferred until goods leave the FTZ and enter US commerce. If goods are re-exported from the FTZ, no duties are ever paid. FTZs also allow importers to pay duties on the finished good's rate rather than component rates — potentially a lower duty.

G

GSP (Generalized System of Preferences)

A US program allowing duty-free entry for thousands of products from designated developing countries. GSP periodically expires and must be renewed by Congress — there have been multiple multi-year lapses. Not all developing countries are GSP-eligible, and not all products from eligible countries qualify.

GST (Goods and Services Tax)

The consumption tax applied in Canada, Australia, and several other countries — equivalent to VAT. In Canada, GST is 5% federal; provinces may add PST/HST on top. In Australia, GST is 10% and applies to imports above AUD $1,000. In Australia, GST is calculated on CIF + duty. In Canada it is calculated on the value for duty plus duty, with international freight excluded.

H

Harmonized System (HS)

The global product classification system maintained by the World Customs Organization (WCO). Every product traded internationally has a 6-digit HS code — countries then add 2-10 more digits for national specificity (HTS in the US, TARIC in the EU, Commodity Code in the UK). The first 6 digits are universal. Misclassification is the #1 source of customs penalties.

HMF (Harbor Maintenance Fee)

A US fee of 0.125% of the cargo value assessed on ocean imports. Collected by CBP at the time of entry. Applies to shipments entering through US seaports. Air and land shipments are exempt.

HMRC (His Majesty's Revenue and Customs)

The UK's customs and tax authority. Responsible for collecting customs duties, VAT on imports, and enforcing UK trade regulations since Brexit. HMRC publishes the UK Global Tariff.

HTS (Harmonized Tariff Schedule of the United States)

The US-specific tariff schedule — takes the international 6-digit HS code and extends it to 10 digits for US customs purposes. Each HTS number has a duty rate associated with it. The HTS is published by the USITC and updated regularly. HTS classification determines your duty rate.

I

IMMEX (Industria Manufacturera, Maquiladora y de Servicios de Exportación)

Mexico's program allowing duty-free temporary import of raw materials, components, and machinery for manufacturing goods that will be exported. Similar to the US FTZ program but for Mexican manufacturing. IMMEX goods that stay in Mexico pay full duties.

Incoterms

A set of 11 standardized three-letter trade terms published by the International Chamber of Commerce (ICC) that define buyer/seller responsibilities for delivery, insurance, and customs clearance. The 2020 edition is current. Key terms for importers: EXW (Ex Works), FOB (Free On Board), CIF (Cost Insurance Freight), DDP (Delivered Duty Paid).

IOSS (Import One-Stop Shop)

The EU's electronic system for collecting VAT on e-commerce imports ≤€150. Non-EU sellers register in one EU country and remit VAT for all EU sales through a single return. Eliminates the need for consumers to pay VAT at delivery. For imports above €150, standard customs procedures and VAT collection apply.

ITA (Information Technology Agreement)

A WTO plurilateral agreement that eliminates duties on IT products — semiconductors, computers, telecom equipment, software media, and some electronic components. Signed by 82 countries covering ~97% of world IT trade. Most consumer electronics from any origin benefit from ITA zero rates.

J

JCT (Japanese Consumption Tax)

Japan's version of VAT. 10% standard rate, calculated on CIF + customs duty. ¥10,000 de minimis threshold applies. Collected by Japan Customs at the time of import.

K

KORUS FTA

The US-Korea Free Trade Agreement (entered force 2012). Eliminates duties on virtually all Korean electronics, semiconductors, and most manufactured goods entering the US. Origin certification is required. One of the most comprehensive US FTAs.

L

Landed Cost

The total cost of goods delivered to the buyer's door — FOB price + freight + insurance (CIF) + customs duties + VAT/GST + customs broker fees + port charges + inland delivery. The number that matters for your P&L. DutyCalc's core metric.

LCL (Less than Container Load)

Ocean freight where your cargo shares a container with other shippers' goods. You pay by cubic meter or weight, not for the whole container. Economical for shipments under ~15 CBM.

M

MFN (Most-Favored Nation)

A WTO principle requiring countries to apply the same tariff rate to all WTO members (with exceptions for FTAs, GSP, and preferential schemes). The MFN rate is the default rate for goods from a country with no special trade arrangement. "Most favored" is a misnomer — it means "nobody gets worse than this rate." Section 301 tariffs are on top of MFN.

MPF (Merchandise Processing Fee)

A CBP fee assessed on formal entries: 0.3464% of the entered value, with a minimum of $34.58 and a maximum of $670.86 per entry (FY2027 rates, from 1 October 2026). Informal entries (≤$2,500) and Type 86 (Section 321) entries are exempt from MPF. MPF is in addition to duty.

N

NACCS (Nippon Automated Cargo and Port Consolidated System)

Japan's electronic customs clearance system. All Japanese import and export declarations are processed through NACCS.

NTB (Non-Tariff Barrier)

Any restriction on trade that isn't a tariff — quotas, licensing requirements, technical standards, sanitary/phytosanitary regulations, forced labor laws (UFLPA), and labeling rules. NTBs are often more trade-restrictive than tariffs and harder to quantify.

O

Origin (Rules of Origin)

The criteria used to determine the "nationality" of a product for customs purposes. Under FTAs, products must meet specific origin rules — typically a percentage of regional value content (RVC) or a tariff shift — to qualify for preferential duty rates. Non-originating inputs can disqualify an entire finished good from FTA preference.

P

PGA (Partner Government Agency)

Any US government agency other than CBP that regulates imports: FDA (food, drugs, medical devices), CPSC (consumer products), USDA (agriculture), EPA (vehicles, chemicals), DOT (vehicles), ATF (firearms, alcohol), Fish & Wildlife, and ~40 others. PGA requirements are enforced by CBP at the border but the rules come from the PGA.

Preferential Tariff

A reduced or zero duty rate that applies only to goods meeting specific origin or eligibility criteria — typically under an FTA, GSP, or other preference program. The importer must claim the preference and maintain documentation supporting the claim.

Q

Quota (Tariff-Rate Quota / TRQ)

A two-tier tariff: a lower rate applies up to a specified quantity, and a higher rate applies to quantities above that threshold. Used for sensitive agricultural products (sugar, dairy, textiles). Some quotas are absolute — once the quantity cap is reached, no more imports are allowed until the next quota period.

R

RCEP (Regional Comprehensive Economic Partnership)

The world's largest free trade agreement — 15 Asia-Pacific countries including China, Japan, South Korea, Australia, New Zealand, and all 10 ASEAN members. Entered force January 2022. Creates the first China-Japan FTA. Tariff reductions phase in over 20 years across thousands of product lines.

Reasonable Care

The legal standard under 19 USC §1484: importers must exercise care in classifying goods, valuing goods, and providing information to CBP. Failure to exercise reasonable care can result in penalties — even if the error was unintentional. "I didn't know" is not a defense. Your customs broker can file entries on your behalf, but ultimate liability for errors rests with you, the importer of record.

S

Section 232 Tariffs

Tariffs imposed under Section 232 of the Trade Expansion Act of 1962 on imports that threaten US national security. Since April 2026: 50% on articles wholly or nearly wholly of steel, aluminum or copper, and 25% on derivatives whose metal content exceeds 15% by value, both charged on the full customs value. The country exemptions and tariff-rate quotas were revoked in March 2025; the UK rates and the 200% rate on Russian aluminum are the remaining exceptions. See the Section 232 guide.

Section 301 Tariffs

Tariffs imposed under Section 301 of the Trade Act of 1974. Two separate actions now run under this authority. The original, aimed at Chinese goods in response to unfair trade practices, remains structured in four lists (List 1, 2, 3, 4A, 4B): 25% on Lists 1–3 and 7.5% on List 4A, stacked on top of MFN duties. A second action — the forced-labour measure in force since 24 July 2026, covering 60 economies — adds 12.5% for Chinese goods, 10% for many others, and tops the rest up to a 10% or 12.5% floor; it stacks with the China lists but not with Section 232. A good with a 5% MFN rate and a 25% Section 301 surcharge pays 30% total duty.

Section 321 (De Minimis)

The US statute that allowed goods valued at $800 or less per person per day to enter duty-free and tax-free. Executive action suspended that treatment with effect from 29 August 2025, and CBP's June 2026 rulemaking writes the suspension up as indefinite, so duty now runs from the first dollar. Type 86 was the electronic entry type built for Section 321 clearance; with the exemption suspended, there is no duty-free lane left for it to serve.

Single-Entry Bond

A customs bond covering one shipment at one port. Bond amount must equal at least the entered value. Premium is typically 0.5-1.5% of the bond amount with a minimum of ~$65 per bond. Used by infrequent importers.

T

TARIC (Tarif Intégré de la Communauté)

The EU's integrated tariff database — takes the 6-digit international HS code and extends it to 10 digits for EU-specific customs classifications. TARIC codes determine the duty rate, any anti-dumping measures, tariff suspensions, and import/export restrictions that apply. Updated daily.

TCA (Trade and Cooperation Agreement)

The post-Brexit trade agreement between the UK and EU (effective May 2021). Provides zero-tariff, zero-quota access for goods meeting TCA rules of origin. Customs declarations and regulatory checks are still required — TCA doesn't eliminate border friction, only tariffs.

Telex Release

A method of releasing cargo without the original physical Bill of Lading. The shipper surrenders the original B/L at the origin port and the carrier transmits an electronic release to the destination port. Faster than couriering original documents and eliminates the risk of lost documents. Standard practice for most containerized ocean freight today.

Type 86 Entry

The electronic CBP entry type CBP created in 2019 for Section 321 de minimis shipments ($800 or less). It requires manifest-level data only — no formal entry summary (7501), no bond, no broker — and is processed through ACE. With Section 321 suspended since 29 August 2025 there is no duty-free lane left for it to serve.

U

UFLPA (Uyghur Forced Labor Prevention Act)

US law (effective June 2022) that presumes goods made wholly or in part in Xinjiang are produced with forced labor and are therefore banned from import. Importers must prove goods are not produced with forced labor — the burden of proof is on the importer, not CBP. CBP has detained thousands of shipments under UFLPA across electronics, textiles, solar panels, and automotive supply chains.

UKGT (UK Global Tariff)

The UK's post-Brexit tariff schedule — replaced the EU Common External Tariff for goods entering the UK. Generally simpler and lower than the EU's TARIC, but still contains thousands of product-specific rates. Published by HMRC.

USITC (US International Trade Commission)

The independent federal agency that publishes the HTS, conducts injury investigations for AD/CVD cases, and provides trade analysis to Congress. The HTS on the USITC website is the official version.

USMCA (US-Mexico-Canada Agreement)

The FTA replacing NAFTA (effective July 2020). Eliminates duties on most goods traded between the US, Mexico, and Canada. Stricter rules of origin than NAFTA — particularly for autos (75% RVC, up from 62.5%) and textiles. CBP actively audits USMCA origin claims.

USTR (US Trade Representative)

The executive branch agency responsible for US trade policy, FTA negotiations, Section 301 tariff decisions, and trade enforcement. USTR publishes exclusion lists, conducts reviews, and determines which countries and products face additional tariffs.

V

VAT (Value Added Tax)

A consumption tax applied to imports in virtually every country except the US. VAT is calculated on CIF + customs duty (tax-on-tax). Rates range from 5% (Canada GST) to 22% (Italy IVA). In the EU there is no VAT floor at all — VAT runs from the first euro — and consignments at or below €150 pay a flat €3 per item instead of duty, with VAT on e-commerce sales collected at the point of sale via IOSS. Unlike duty, VAT applies regardless of the goods' origin — FTA preferences don't exempt you from VAT.

W

WCO (World Customs Organization)

The intergovernmental organization that maintains the Harmonized System (HS) and sets global customs standards. 185 member countries. HS changes are decided at the WCO level — typically every 5 years.

Withhold Release Order (WRO)

A CBP order directing ports to detain goods from a specific foreign producer or region suspected of using forced labor. Unlike UFLPA (which creates a blanket presumption for Xinjiang), WROs target specific companies. Once a WRO is issued, that producer's goods are detained at all US ports until the producer proves the goods are not made with forced labor.

WTO (World Trade Organization)

The 164-member international body that sets global trade rules, adjudicates disputes, and maintains the MFN principle. The WTO's ITA eliminates duties on tech products. Its dispute settlement system is currently paralyzed at the Appellate Body level.

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