U.S. Tariff & Trade Term Glossary
Clear, actionable explanations of tariff terms and trade policy concepts. Updated with 2025 tariff changes and policy developments.
Browse by Category
Tariff Policy & Law
Legal and political structure behind tariffs, including trade laws and international commitments.
Browse termsTrade Compliance & Customs
Essential for importers/exporters managing CBP, forms, fees, and duty calculations.
Browse termsTrade Strategy & Risk Mitigation
How businesses respond to tariffs to reduce exposure and optimize costs.
Browse termsInternational Trade Agreements
Terms related to trade liberalization, international rules, and multilateral agreements.
Browse termsTariff Types & Structures
Specific forms and mechanisms of tariffs.
Browse termsEconomic Indicators
Common economic terms associated with trade and tariff impact analysis.
Browse termsAll Glossary Terms
Tariff Policy & Law
Tariff
A tax imposed by a government on imported or exported goods.
Import Duty
A tax collected on imports by the customs authorities of a country.
Export Duty
A tax imposed on goods being exported from a country.
Most Favored Nation (MFN) Status
A level of treatment accorded by one state to another in international trade, ensuring non-discriminatory trade advantages.
Section 301 Tariffs
Tariffs imposed by the U.S. in response to unfair trade practices by other countries, under Section 301 of the Trade Act of 1974.
Section 232 Tariffs
Tariffs imposed to protect U.S. national security, notably used for steel and aluminum imports.
Section 201 Safeguards
Temporary tariff protections for U.S. industries harmed by a surge in imports.
Generalized System of Preferences (GSP)
A U.S. trade program designed to promote economic growth in developing countries by providing preferential duty-free entry for thousands of products.
Trade Promotion Authority (TPA)
A legislative procedure in which Congress grants the President the authority to negotiate international trade agreements.
Retaliatory Tariffs
Tariffs imposed by a country in response to tariffs levied against it.
Tariff Binding
A commitment made by a country not to increase a tariff above an agreed level.
Tariff Concession
A reduction in the usual rate of a tariff, often granted during trade negotiations.
Preferential Tariff
A lower tariff rate applied to imports from certain countries, often under trade agreements.
Tariff Escalation
A situation where tariffs increase with the level of processing of products, discouraging the export of processed goods.
WTO Bound Tariff
The maximum tariff rate a WTO member can impose on a product, agreed upon in international negotiations.
Trade Adjustment Assistance (TAA)
A federal program that provides aid to workers and firms negatively affected by imports.
Trade Compliance & Customs
Import Compliance
The process of ensuring imported goods meet all regulatory requirements and trade laws of the destination country, including proper classification, valuation, origin determination, and payment of applicable duties and fees.
Customs Declaration
An official document that lists and provides details about goods being imported or exported, filed with customs authorities to determine applicable duties, taxes, and ensure regulatory compliance.
Binding Tariff Information
An official ruling issued by customs authorities that provides a legally binding classification decision for specific goods, valid for a set period and ensuring consistent treatment at all ports of entry.
Advance Electronic Manifest
A security requirement mandating that carriers electronically submit cargo and conveyance information to customs authorities before arrival, enabling risk assessment and facilitating legitimate trade.
Harmonized Tariff Schedule (HTS)
An internationally standardized system of names and numbers for classifying traded products.
Customs Valuation
The process of determining the economic value of goods declared for importation.
De Minimis Rule
A threshold below which goods can be imported without incurring customs duties or taxes.
U.S. Customs and Border Protection (CBP)
The agency responsible for enforcing U.S. customs regulations, including tariff collection.
Entry Summary (CBP Form 7501)
A required form for declaring the classification and value of goods entering the U.S.
Merchandise Processing Fee (MPF)
A fee imposed on most imports into the United States, in addition to tariffs.
Harbor Maintenance Fee (HMF)
A U.S. federal tax imposed on commercial cargo imported through or transported through certain U.S. ports, collected to fund the maintenance and operation of U.S. harbors and waterways.
Customs Broker
A professional who assists importers and exporters in meeting federal requirements for international shipments.
Broker License
A license required for individuals or companies to act as customs brokers.
Import Compliance Procedures
The process of adhering to all customs laws and regulations for imported goods.
Customs Documentation
Documents that list and give details of goods that are being imported or exported.
Country of Origin Labeling
Regulations requiring that products be labeled with their country of origin, informing consumers about where goods are manufactured, produced, or grown.
Trade Strategy & Risk Mitigation
Tariff Engineering
The legal practice of designing, configuring, or manufacturing products in a way that allows them to qualify for lower duty rates while maintaining their essential functionality and market appeal.
Duty Drawback
A refund of customs duties, certain taxes, and fees collected upon importation when the imported goods or materials derived from them are subsequently exported.
Free Trade Zone
A designated geographic area where goods may be landed, stored, handled, manufactured, or reconfigured without being subject to import duties. Duties are only paid when goods leave the zone for domestic consumption.
Bonded Warehouse
A secure facility where imported goods can be stored without payment of duty until they are released.
Transshipment
The practice of shipping goods through a third country to avoid tariffs or trade restrictions.
Tariff Rate Quota (TRQ)
A trade policy tool that combines two policy instruments: quotas and tariffs, allowing a set quantity of specific products to be imported at a lower tariff rate.
Quota System
A system that limits the quantity of certain imports allowed into the country within a time period.
Origin Criteria
The conditions that a product must fulfill to be considered as originating in a particular country.
Rules of Origin
Criteria used to define where a product was made and are important for implementing trade measures such as tariffs and quotas.
Tariff Quota
A two-tiered tariff system that imposes a lower tariff rate on imports up to a certain quantity and a higher rate on quantities that exceed the quota.
Country of Origin Labeling (COOL)
Requirements for labeling the origin of products for compliance with trade regulations.
Supply Chain Diversification
The practice of sourcing goods from multiple countries to mitigate tariff and geopolitical risks.
Friendshoring
The practice of relocating supply chains to countries with shared values and political alignment.
Nearshoring
Moving production or sourcing closer to a company's primary market to reduce costs and risks.
Reshoring
Bringing manufacturing and production back to the domestic market from overseas.
Decoupling (Trade)
The deliberate reduction of economic interdependence between countries, often through tariffs or bans.
International Trade Agreements
Free Trade Agreement (FTA)
A pact between two or more nations to reduce barriers to imports and exports among them.
Trade War
A situation where countries impose tariffs or other trade barriers against each other in response to trade disputes.
Trade Facilitation
The simplification and harmonization of international trade procedures.
Trade Liberalization
The removal or reduction of restrictions or barriers on the free exchange of goods between nations.
Customs Union
A group of countries that have agreed to charge the same import duties and usually to allow free trade between themselves.
Digital Services Tax (DST)
A tax on digital companies often targeted in trade disputes (e.g., U.S. vs. France).
U.S. International Trade Commission (USITC)
An independent, quasi-judicial agency that provides trade expertise to Congress and the President.
Tariff Types & Structures
Tariff Quota
A two-tiered import restriction system that allows a specified quantity of a product to enter at a reduced tariff rate, while quantities exceeding the quota face higher rates.
Ad Valorem Tariff
A tariff based on a percentage of the value of the imported goods.
Specific Tariff
A tariff charged as a fixed amount per unit of imported goods.
Compound Tariff
A tariff that combines both ad valorem and specific tariffs.
Anti-Dumping Duty
A protectionist tariff imposed on foreign imports believed to be priced below fair market value.
Countervailing Duty
Additional tariffs imposed to offset subsidies provided to producers or exporters in the exporting country.
Non-Tariff Barriers (NTBs)
Trade barriers that restrict imports or exports through mechanisms other than the simple imposition of tariffs.
Tariff Peak
Exceptionally high tariffs, usually on sensitive products, in comparison to the average tariff rates.
Tariff Schedule
A comprehensive list of tariffs imposed by a country on imports and exports.
Safeguard Measures
Temporary restrictions on imports of a product to protect a specific domestic industry from an increase in imports causing or threatening to cause serious injury.
Tariff Preference Level (TPL)
A mechanism that allows a certain quantity of goods to enter a country at a reduced tariff rate.
Trade Remedy
Measures such as anti-dumping duties, countervailing duties, and safeguards applied to protect domestic industries from unfair trade practices.
Tariff Reclassification
Changing the HTS code used for an imported product to qualify for a different duty rate.
Exclusion Requests
Requests submitted by importers to avoid paying Section 301 or 232 tariffs for specific goods.
Economic Indicators
Trade Deficit
A situation where a country's imports exceed its exports.
Trade Surplus
A situation where a country's exports exceed its imports.
Import Quota
A limit on the quantity of a specific product that can be imported into a country.
Export Subsidy
Government financial assistance to domestic producers to encourage exports.