Import basics: duties, HS codes and landed cost for activewear

HS codes: the number that sets the rate

Every garment imports under a Harmonized System classification, determined by real attributes: knit vs woven, fiber content, gender, garment type. Duty rates differ meaningfully between codes — synthetic knit activewear typically carries double-digit duty rates in the US, while some destinations and trade agreements sit far lower.

Fiber content drives classification, which is one more reason the label, the invoice and the actual fabric must agree. Misclassification — accidental or 'optimistic' — invites reassessment, penalties and shipment holds.

How the landed cost actually stacks

Landed cost = goods + freight + insurance + duty (calculated on customs value, in the US typically the goods' transaction value) + destination fees: brokerage, port and handling charges, possible additional tariffs by origin, and in many markets import VAT/GST — often reclaimable for registered businesses, but real for cash flow.

Build the model once per product in a spreadsheet: at typical activewear duty rates plus freight and fees, a rough planning multiplier of 1.2–1.4× ex-factory is common — verify your own lanes and rates rather than borrowing anyone's number, including that one.

Paperwork that keeps customs boring

The set: commercial invoice (accurate values and full product descriptions), packing list, bill of lading, and origin documentation where preferences apply. Consistency is the whole art — quantities, values, fiber contents identical across documents and physical labels.

Undervaluing invoices to save duty is the oldest bad idea in importing: penalties, seizure risk, and a poisoned importer record. Brands that intend to scale — or ever be acquired — keep this clean from order one.

Where your supplier helps, and where they cannot

A competent supplier produces clean, consistent export documents, correct labeling (fiber content, origin, care), and consolidated shipments that clear as one entry — SEAMDANCE programs ship with the document set matched to the destination's needs. What a supplier should not be, if you want control of your customs record, is your importer of record: duty planning and final classification live with you and your broker.

The efficient division: we make the paperwork boring, your broker makes the classification binding, and your spreadsheet knows the landed cost before you approve the program — not after the container lands.

Importer of record: who it is and what it answers for

The importer of record (IOR) makes customs entry in its own name and answers for it. US law has the IOR file, with reasonable care, the declared value, classification and rate of duty [3], and treats the duty as the importer's personal debt, which paying a broker does not clear if the broker fails to pay CBP [4]. CBP defines the IOR as the owner or purchaser of the goods, or a licensed customs broker designated by the owner, purchaser or consignee, liable for all duties and import requirements [5].

So the IOR need not own the goods: a designated broker can make entry without title [3]. Nor must it be a US company: a corporation incorporated abroad may enter goods if it has a resident agent authorized to accept service of process in the port's state and a bond backed by a resident corporate surety [4], which is how a foreign seller can deliver duty paid. Whoever makes entry must also show its right to do so, for example as holder of the bill of lading [4].

The IOR is identified by a number filed on CBP Form 5106 with its first formal entry: the IRS employer identification number (EIN), otherwise a Social Security number, otherwise a number CBP assigns [6]. To see who the IOR is on a shipment, ask your broker for the entry summary, CBP Form 7501: it identifies the IOR, the ultimate consignee and any Form 4811 party receiving refunds, and an IOR named on the commercial invoice should match it unless a broker is the IOR [5].

To change the IOR for future shipments, the new party files its own Form 5106 [6] and authorizes a broker in writing [3] before the goods arrive. A consignee that is not the actual owner can also say so on the entry and file the owner's declaration and bond within 90 days, moving liability for increased or additional duties to the owner [4].

Incoterms and DDP: who clears the goods, and who is the importer

Incoterms rules never name an importer of record; they set who clears import and pays duty. ICC's decision guide puts import clearance on the buyer under every rule except DDP, and warns that practical realities may stop a DDP seller from handling it [7]. In the US, a foreign DDP seller must meet the nonresident-importer conditions or designate a licensed broker as IOR [3][4]. Export clearance is the seller's job except under EXW [7]; whether a forwarder may be the exporter is for the export country's rules.

DDP shipping from China means the supplier, or a logistics provider it uses, quotes a delivered price with import clearance and duty included [7]. Get in writing whose name and importer number will be on the US entry and who keeps the records: as checked on 22 September 2026, CBP pays IEEPA duty refunds only to the importer of record or a party it designated on Form 4811 [8].

In Canada, the CBSA's importer of record is the party named as importer on the declaration, identified by its nine-digit Canada Revenue Agency business number plus a six-character RM import-export account. A broker may declare its client or itself as IOR; each importation has one IOR, jointly liable for duty with the owner and the importer [9].

Customs duty, tariffs and import tax: what each is and how the bill is worked out

Customs duty and import duty are the same tax on imported goods; 'tariff' means the rate schedule, such as the US Harmonized Tariff Schedule [1] or the UK Trade Tariff [2], and loosely the duty itself. Duty raises revenue and serves trade policy; duties from specific trade actions, such as Section 301, sit on top of the base rate under a separate Chapter 99 number [10]. Import VAT or GST is a separate tax on top.

The US working formula is duty = customs value × rate, plus any additional duties. Rates can be free, ad valorem (a percentage of value), specific (per unit) or compound [5]. Customs value is normally the price paid or payable plus packing, selling commissions, assists, royalties and resale proceeds where they apply, excluding international freight and insurance [11]. The entry adds the merchandise processing fee, a percentage of value with a floor and cap subject to annual adjustment, and for sea freight the harbor maintenance fee [6]. CBP sets the final rate; for certainty on a style, request a binding ruling [12]. The UK instead counts freight, insurance and handling to the border in customs value [13] and charges import VAT on customs value plus duty [14].

The importer of record pays, directly to CBP or through its broker [4]. Commercial entries can be paid electronically by ACH through statement processing on CBP's Automated Broker Interface, the method the regulations prefer; card payment is limited to non-commercial entries [6]. A broker's or carrier's disbursement fee for advancing your duty is a private charge, not duty; US rules even let an importer pay a broker's fees and the duties with separate checks [4].

Getting duty back: drawback, refunds and bonded warehouses

Duty paid correctly on goods sold in the US stays paid. Drawback refunds certain duties, taxes and fees when imported goods are exported or destroyed [15]. For finished garments, look first at unused merchandise and rejected merchandise drawback; claims are filed in ACE by the claimant or a licensed broker, CBP is notified on Form 7553 before export or destruction, and exports to Canada and Mexico are restricted [15]. Most claims must be filed within five years of import [10].

As checked on 22 September 2026, CBP's trade-remedy drawback FAQ says Section 301 duties are eligible for drawback, and that Section 301 duties paid on products later excluded can be recovered by post-summary correction or, after that window, by protest [10]. CBP was also refunding duties imposed under the International Emergency Economic Powers Act (IEEPA) through a process called CAPE, filed only by the importer of record or its filing broker, with no CBP fee [8].

A bonded warehouse defers duty rather than removing it. Goods can be stored or manipulated there without paying duty for up to five years; duty is paid on withdrawal for consumption, and goods exported instead never pay US duty [16]. Duty is charged at the rate in force on the day of withdrawal [17], so a tariff change while stock waits cuts both ways.

Importing clothing from China: labels, admissibility and the order of work

Clothing can be imported from China commercially; beyond classification and duty, two checks matter before the first order ships. In the US, CBP enforces a rebuttable presumption that goods made wholly or partly in Xinjiang, or by an entity on the UFLPA Entity List, are prohibited [18], so keep records tracing fiber and fabric to source. And labels must meet the destination's rules.

US rules require generic fiber names and percentages by weight, the manufacturer's or handler's name or RN, and the country of origin, placed at the inside center of the neck on garments with one [19], plus a permanent care label legible for the garment's life [20]. The EU's Regulation 1007/2011 requires fiber names and percentages by weight in descending order on a durable label, normally in the language of the country of sale and visible before purchase, online too; the importer answers for it when the manufacturer is outside the EU, and it does not cover care labels [21]. The UK enforces the same regulation under a 2012 statutory instrument that makes breaches an offense [22].

Sourcing from China means finding and qualifying manufacturers, then managing samples, production, inspection and shipping. Suppliers are found on B2B platforms such as Alibaba, at trade fairs, or through a supply-chain company that places each style with a factory in its network; no route is best for every brand, and buying direct leaves checks and inspection to you. The usual case for China is fabric, trim and technical range; the case against is duty exposure and traceability work. Either way: set up the IOR, classify each style, approve labels at sample stage, and agree the Incoterms rule and inspection standard in writing.

Dresses, shirts, kids' and baby clothes: where each sits in the tariff

Importing dresses, shirts or children's clothing from China follows the same order of work as activewear; what changes first is the classification. The six-digit Harmonized System code is shared internationally and underpins national customs tariffs [24], while each market adds its own digits and sets its own rates, so look up the full code and rate in your destination's tariff [1][2]. The first split is construction: knitted or crocheted garments sit in chapter 61, other garments, woven ones included, in chapter 62 [25][26].

Two chapter notes settle many children's and unisex styles. Babies' garments are articles for young children up to 86 cm in body height, and a garment that could also fall under another heading goes to the babies' heading [25][26]. Older children's clothes share the adult headings, boys' with men's and girls' with women's. A garment that closes left over right counts as men's or boys', right over left as women's or girls', unless the cut clearly shows otherwise; one that cannot be identified goes to the women's or girls' heading [25][26].

Kids' and baby clothes: the extra safety rules by market

Children's clothing carries safety rules that adult activewear does not. In the US, a children's product is one designed or intended primarily for children 12 or younger, and it needs third-party testing and a written Children's Product Certificate [27]. For apparel, the importer or domestic manufacturer issues that certificate based on tests by a CPSC-accepted laboratory, and the garment and its packaging carry permanent tracking marks [28]. As checked on 22 September 2026, CPSC limits total lead to 100 ppm in any accessible part and lead in paint or surface coatings to 90 ppm; fabric colored only with dyes need not be tested for total lead, but textiles with other treatments or applications fall outside that exemption [28].

Sleepwear and drawstrings have rules of their own. US children's sleepwear must meet 16 CFR 1615 or 1616 unless it is an infant garment or tight-fitting [28], and children's upper outerwear in sizes 2T to 16 with drawstrings that fail ASTM F1816-97 is deemed a substantial product hazard and refused entry [29]. Health Canada treats drawstrings on children's upper outerwear that do not conform to ASTM F1816-18 as a danger [35]. The European standard for cords and drawstrings on children's clothing is EN 14682; in 2011 the Commission found the edition then current met the general safety requirement of EU product-safety law [31]. An OEKO-TEX STANDARD 100 certificate in product class I, the class for babies, does not settle any of this: OEKO-TEX states that the mark declares nothing about product safety or drawstrings [36].