Tariffs get announced in headlines as a percentage — "25% on steel," "10% on electronics" — but that percentage doesn't tell you what actually happens at the border, or who ends up paying it. Here's the mechanical version.
A tariff is a tax on the importer, not the exporter
When a tariff is applied to a product category, it's charged to the company or person importing the goods into the country, calculated as a percentage of the goods' value. The foreign exporter doesn't pay it directly — though tariffs often lead exporters to lower their prices to stay competitive, effectively splitting the cost, or importers pass it straight through to consumers instead.
What "value" actually means
Tariffs are usually calculated on either:
- FOB (Free on Board) value — the price of the goods themselves, not including shipping and insurance to get them to your country
- CIF (Cost, Insurance, and Freight) value — the goods' price plus shipping and insurance combined
Which one applies depends on the country and product — this single distinction can change the tariff amount by a meaningful margin, since CIF is always a bigger number than FOB for the same shipment.
A simple example
A $10,000 shipment with a 15% tariff on FOB value owes $1,500 in duty. The same shipment calculated on CIF value — say $10,800 once shipping and insurance are added — owes $1,620 instead. Small percentage differences in the base compound at scale.
Tariffs change more often than people expect
Tariff schedules aren't static — governments adjust them in response to trade negotiations, retaliation measures, and policy shifts, sometimes with very little notice. A rate that applied last quarter isn't guaranteed to apply today.
Check current rates and calculate your own
The Tariff Tracker follows official government trade notices as they're published, and the Tariff Calculator lets you work out the landed cost for a specific shipment using either FOB or CIF value, so you're not guessing at the math.