As global trade dynamics evolve, understanding tariffs has become vital for businesses engaged in international commerce. Recent policy changes have introduced a baseline tariff on imports from most countries, with higher rates for specific nations and products. Tariffs and EDI are closely linked, making it essential to stay current with changes and ensure your EDI processes remain compliant to support business success.
Failing to include accurate tariff information in EDI documents can result in:
- Customs delays
- Penalties or fines
- Reduced shipments
- Disrupted trading partner relationships
Understanding Tariff Classification
Every imported product must be accurately described and valued for customs duties. The product’s Harmonized System code (International) or Harmonized Trade Schedule (HTS) code (U.S.) dictates the applicable tariff rate, making it paramount to have a correct HTS. For instance, distinguishing between electronic and non-electronic toys (like a battery-operated Barbie car versus a standard Barbie doll) can result in different tariff rates.
At a high level, tariffs are calculated based on the HTS code of the product code and total value. Accurate core data and proper transmission in EDI documents are imperative to ensure tariffs are neither overpaid nor underpaid.
How Are Tariffs Represented in EDI?
Tariff-related data appears in order-to-cash (OTC), customs and logistics EDI transaction sets. Here are some of the most relevant:
| EDI Transaction Set | Purpose | Tariff Usage |
| EDI 850 (Purchase Order) | Order goods internationally | May include HTS codes to indicate product classification |
| EDI 856 (Advanced Ship Notice) | Inform reciever of shipment | Can include country of origin and HTS codes |
| EDI 810 (Invoice) | Bill for goods/services | May reflect tariff and other duty charges |
| EDI 857 (Customs Manifest) | Provide customs info | Explicit tariff/duty data for customs agents |
| EDI 309 / 310 / 315 | U.S. Customs documentation | Required for customs clearance, includes tariff codes, duties, and taxes |
Key Data Elements Related to Tariffs
- Harmonized Tariff Schedule (HTS) Code: Classifies the product for customs. Example: 9403.20.00 for metal furniture. List of HTS codes.
- Country of Origin (COO): Indicates where the product was made.
- Duty Amount: Specific dollar amount or percentage charged.
- Total Declared Value: Used to calculate tariffs based on value.
These elements are typically found in the LIN, PID, SAC, and N9 segments of EDI documents, depending on the standard (X12 or EDIFACT) and transaction type. Review your EDI specifications and documents carefully to identify all tariff-related values.
Stay Informed and Compliant
With the current average effective tariff rate reaching 17.8% (the highest since 1934) it’s critical for businesses to stay informed and adapt to the evolving trade landscape. Implementing efficient systems and processes can mitigate risks and ensure compliance. Review your EDI data to confirm you are sending comprehensive and accurate information so tariffs can be calculated correctly. Do not allow bad data to create an even greater tariff impact, accurate data is critical for your bottom line.
Data Communication Solutions – Your Partner in EDI Optimization
DCS specializes in optimizing EDI for supply chain integration. When it comes to tariffs, our results offer greater control over the import process, facilitate timely and accurate tariff payments, and improve compliance. We can help identify and correct problems to ensure that you get the best possible value from your EDI. If you’re concerned about the effects of tariffs on your business, we can help you minimize the impact so you can thrive in the current environment. Contact us today to ease your tariff concerns.
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