Tariffs are back in the headlines, and if your eCommerce business ships across borders, that word will likely make you pay attention. However, tariffs are just one piece of a bigger, often confusing puzzle. Duties, tariffs, taxes: Many sellers use these terms interchangeably, but that mistake can cost you.
Have you ever had a customer abandon their cart due to unexpected fees? Did you get burned on your margins because you didn’t budget for a customs duty? You’re not alone. Understanding the difference between duties and tariffs is about protecting your bottom line and delivering a better customer experience.
In this post, we’ll break down the difference, show you real-world examples, and explain how getting it right can give your business a serious edge in the world of international shipping.
Why Understanding These Terms Matters More Than Ever
Global trade seems to be shifting under our feet. Recent tariff battles, trade disputes, and supply chain disruptions have shown how quickly things can escalate. One policy change or one new regulation, and suddenly, your shipping costs skyrocket or your products sit stuck at the border.
If you’re running an eCommerce business, you can’t afford to treat duties, tariffs, and import taxes as vague or interchangeable fees. Each serves a different purpose—and understanding how they affect your shipments is essential to protecting your margins and delivering a reliable customer experience.
If you overlook how these costs work, you risk:
- Surprise fees that eat into your profit margins
- Customs clearance delays that frustrate your customers
- Compliance mistakes that damage your brand’s reputation
But when you understand the full picture—how duties are applied, how tariffs shape sourcing decisions, and how tools like de minimis thresholds and trade agreements work—you gain real leverage. You can make smarter pricing decisions, streamline your shipping workflows, and build trust with your customers.
In global eCommerce, this isn’t just about getting the terminology right. It’s about staying competitive in a world where cross-border shipping rules change constantly.
What Is a Duty?
A duty is a fee that your customer or your business might owe when importing goods into a country. It’s calculated by customs authorities and typically depends on what you’re shipping, where it’s coming from, and how it’s classified.
If you’ve ever looked at a shipping invoice and seen a charge that seemed to appear out of nowhere, there’s a good chance it was a customs duty.
Here’s how it works:
- Every product you ship internationally is assigned an HTS code (Harmonized Tariff Schedule code).
- That code identifies the type of product and helps customs determine the duty rate.
- Then, based on the country of origin and applicable trade agreements with the destination country as well as the product type, a percentage or fixed fee is applied to the value of the goods.
There are different types of duties:
- Ad valorem duties (charged as a percentage of the product’s value)
- Specific duties (flat fees based on quantity, weight, or volume)
- Excise duties (applied to specific goods such as alcohol, tobacco, and fuel—typically items considered harmful, regulated, or luxury products)
- Anti-dumping duties (used to protect domestic industries from unfair pricing by foreign competition)
Let’s say you’re an eCommerce seller in the U.S. shipping leather handbags to the European Union. Depending on how those bags are classified, the duty rate might be 5%-10% of the declared value. If you don’t calculate that up front or clarify it during checkout, your buyer gets hit with an unexpected charge—and now you’ve got an angry customer and possibly a return request.
Duties are transactional, tied to individual shipments. They are part of the customs clearance process and should always be factored into your landed cost.
What Is a Tariff?
A tariff is a broader concept. It refers to the policy behind duties. Think of a duty as the fee on a specific shipment and the tariff as the rule that created it.
In practice, the word tariff can show up in two ways:
- Tariff schedule—the full list of duty rates set by a government for all import categories
- Trade tool—tariffs used by governments to protect domestic producers, retaliate in trade disputes, or encourage local sourcing
Tariffs can be specific (flat amount per unit) or ad valorem (based on product value), and they can change fast—especially during political or economic shifts. You’ve probably seen this play out in recent years: U.S. tariffs on Chinese electronics. Steel tariffs. Retaliatory tariffs from Canada or the EU.
If your product suddenly ends up on a new tariff list, your shipment could face a 25% increase in import fees overnight.
Say you sell electronics online, sourcing components from China and fulfilling orders from a U.S. warehouse. A newly imposed specific tariff could raise the cost of each component you import. Even if you have margin room or a pricing strategy, you still have to decide whether to absorb the cost or pass it on to the customer. The difference is, you’re not scrambling—you’ve planned for it.
For eCommerce sellers, tariffs affect:
- Sourcing decisions (where you buy from)
- Pricing (how much buffer you build in)
- Profit margins (especially when tariffs change midyear)
Tariffs are less about individual shipments and more about policy, but they have direct consequences for every box you ship.
Duties vs. Tariffs: Which Impacts Your Business More?
If you’re shipping internationally, both duties and tariffs affect your business, but in different ways.
Duties hit your pricing directly—especially when product classification isn’t accurate. A single HTS code error or overlooked duty rate update can eat into your margins without warning. That’s why it’s critical to monitor changes, classify products carefully, and build a buffer into your pricing strategy whenever possible.
Tariffs, on the other hand, shape the rules you’re playing by. They determine which products will cost more to import and which are eligible for lower- or zero-duty treatment based on trade agreements. You might think your product is safe until it ends up on a new tariff list and your import fees spike overnight.
Mistakes with either can cause real damage. If you report the wrong rate or fail to understand how duties apply to your product, you can face customs clearance delays that hold up deliveries and frustrate your customers. For eCommerce sellers, where speed is everything, that delay can mean canceled orders and lost repeat business.
And just to make things trickier, these rates and rules change constantly. Different countries maintain entirely separate tariff schedules, and two neighboring nations might apply completely different trade policies to the exact same product.
Other Terms You Should Know
If you’re digging into duties and tariffs, you’ll run into a few other terms that can impact your shipping costs and compliance.
Here’s a quick glossary, so you’re not caught off guard:
Country of Origin
It’s not where your business is based; it’s where the product was made. This determines whether your goods qualify for special treatment under trade agreements or get hit with additional import duties. Don’t guess; it matters.
De Minimis Threshold
If your shipment is under a certain value, it may be exempt from duties or taxes. That threshold varies by country, and understanding it can help you lower costs or make shipping cheaper for your customers.
Free Trade Agreement (FTA)
These agreements between countries can lower or eliminate tariffs on qualifying goods. If you’re shipping from the U.S. to Canada or Mexico, for example, USMCA might allow you to skip duties altogether for certain goods.
Importer of Record
This is the person or business responsible for ensuring compliance with customs laws. If that’s you, you’re on the hook for filing paperwork, paying duties, and dealing with customs authorities. Know what you’re signing up for.
Landed Cost
This is the total cost to get your product to the buyer’s doorstep—including product cost, shipping, duties, taxes, insurance, and handling fees. If you’re not calculating this, your pricing strategy might already be off.
Tariff Schedule
Every country has one. It’s a list of duty rates applied to all imported goods. Understanding your destination country’s tariff schedule can help you forecast costs and make better sourcing decisions.
Pro Tips to Manage Duties, Tariffs, and Shipping Costs Like a Pro
Understanding the difference between duties and tariffs is important, but knowing what to do with that knowledge is what protects your business. Use this checklist to stay compliant, reduce friction, and keep your profit margins in check.
Classify Every Product with the Correct HTS Code
Your product’s HTS code determines the duty rate—get it wrong, and you risk overpaying or triggering a delay at customs. Use classification tools or work with a customs broker to avoid errors.
Know the Country of Origin for Every Product
Where your product is made (not sold) impacts duties and tariffs. It also determines if it is covered by free trade agreements such as the United States-Mexico-Canada Agreement (USMCA).
Check the Tariff Schedule Before You Ship
Every country has a tariff schedule, and rates can change frequently. Some goods are subject to specific tariffs—a fixed amount charged per unit (like $2 per item), while others are subject to ad valorem tariffs. Some products also fall under tariff-rate quotas, where a lower tariff applies to a limited quantity of imports, and a higher tariff kicks in once that quota is exceeded.
Offer Landed Cost Transparency
Use a landed cost calculator to show customers the full price—product, shipping, import fees, duties, and taxes included. Surprises at delivery lead to abandoned carts and refund requests.
Understand the De Minimis Thresholds
If your shipment is less than a country’s de minimis value, it may be exempt from duties or import taxes. Knowing these thresholds can help you design smarter pricing and packaging strategies.
Use DDP Over DDU Whenever Possible
Delivered Duty Paid (DDP) means you cover all duties and taxes before the shipment reaches your customer—so there are no surprise charges to the consignee on delivery. Delivered Duty Unpaid (DDU) puts that responsibility on the customer, which can lead to confusion, delays, or returned packages. With DDP, you control the full delivery process, avoid friction at the doorstep, and create a smoother customer experience.
Track Tariffs Like They Affect You—Because They Do
A tariff isn’t just a technicality. It’s a tool governments use to control foreign goods, protect local industries, or engage in global trade disputes. If your product ends up on a new tariff list, you could see a significant cost increase overnight.
Work with a Trusted Importer or Logistics Partner
A reliable importer of record or cross-border logistics partner can handle compliance, navigate customs clearance, and keep up with shifting trade policies so you don’t have to. Companies such as ePost Global specialize in helping eCommerce businesses avoid costly mistakes.
Factor It All into Your Pricing Strategy
Tariffs, duties, taxes, and fees aren’t optional; they’re part of your cost structure. If you don’t account for them up front, you’re setting yourself up for higher prices, thinner margins, or unhappy customers.
Don’t Let Tariff Confusion Derail Your Global Strategy
Expanding your eCommerce business across borders means entering a world of duties, tariffs, and complex international trade rules.
When tariff schedules shift, duty rates can spike overnight. If you’re not paying attention, that could mean big surprises in your business. For both you and your customers.
Need a partner that understands how tariffs and duties impact your international shipments? ePost Global helps eCommerce businesses simplify cross-border shipping, optimize customs compliance, and protect profitability. Let us handle the complexity, so you can focus on scaling your brand.
