Here is the moment we watch happen from our side of the table, over and over.

A founder nails the product. Approves the sample. Wires the balance.

The container ships. Then a customs invoice lands that nobody budgeted for, and a margin that looked healthy on the FOB price quietly collapses at the border.

Duty is not a fee you can negotiate away. It is a tax set by your government on your import, and it lands on you, the buyer, not on the factory.

The good news: it is completely predictable if you know the handful of things that drive it.

This guide is the version we wish every brand would read before their first bulk order.

We will keep it concrete and current. Rates in 2026 are moving fast, especially in the US, where the entire system was rebuilt twice inside twelve months.

So we teach the mechanics that don’t change first, then give you dated snapshots you can verify yourself on the official tools.

By the end, you will be able to estimate the duty on any order, into any of the three big markets, before you place it.

Read this first

This is a practical guide, not customs, legal, or tax advice. Duty and tariff rates change sometimes with a few days’ notice and depend on the exact garment and its origin. Every number here is a dated example. Confirm the live rate on the official tariff tool for your market, or with a licensed customs broker, before you price an order or quote a client.

What’s inside

  1. How apparel duty is actually calculated
  2. HS codes & country of origin: the two facts that set your rate
  3. The three destinations right now: US vs UK vs EU
  4. The Origin Dividend: one order, three very different bills
  5. Working with a customs broker (and the DDP shortcut)
  6. The documents that clear customs
  7. Budgeting duty into your landed cost
  8. The pre-order customs checklist
  9. Frequently asked questions

Chapter 01

How apparel duty is actually calculated

Strip away the jargon, and import duty is one multiplication:

Duty = Customs Value × Duty Rate

That’s it. The whole game is knowing what goes into each side.

Customs value is how much your goods are worth in the eyes of the border.

The duty rate is what percentage of the border charges on this specific garment from this specific country.

Everything else in this guide is helping you fill in those two numbers correctly.

What counts as “customs value,” and why does it differ by market

This trips up more founders than the rate itself, because the three markets don’t agree on what to tax.

  • The US taxes the FOB value, the transaction value of the goods themselves, leaving out international freight and insurance. Your factory invoice price, essentially.
  • The UK and EU tax the CIF value (Cost + Insurance + Freight). The goods plus what it cost to get them to the border. Higher freight literally raises your duty bill in those markets.

So the same $10,000 order can have two different duty bases: $10,000 in the US, but roughly $10,800 in the UK or EU once you add the sea freight and insurance.

Small difference on one order; real money across a year.

The rate is not one number; it’s a stack

Nobody quotes you a single “clothing rate,” because there isn’t one.

The rate you actually pay is assembled in layers.

This is the single most useful mental model in the whole guide, so we’ve given it a name.

The Duty Stack

Your real duty rate is built bottom-up from three layers. Read them in order, and you’ll never be surprised:

  1. The base rate (MFN). The standard tariff for that garment, from the destination’s tariff schedule. For apparel, this is usually somewhere in the 0–32% band depending on fiber and construction.
  2. The adjustment layer. This either subtracts the base (a trade preference like UK DCTS or EU GSP+ can take it to 0%) or adds to it (a surcharge, like the US measures running through 2026).
  3. The fee layer. Flat processing and handling fees that apply even when duty is zero: the US MPF and HMF, or EU/UK clearance handling.

Two garments with the same base rate can land completely differently once you stack layers 2 and 3. Always build the whole stack; never quote off the base alone.

Then, on top of the stack, the UK and EU add import VAT which is a tax, not a duty, and behaves very differently (more on that in Chapter 7). The US has no VAT. Hold that thought; it changes the maths a lot.

Related guide

What a garment actually costs to make: duty sits on top of your FOB cost, so start from a clean cost breakdown.

Related guide

FOB, CIF & Incoterms are explained because your duty base depends on which Incoterm your invoice uses.

 

Chapter 02

HS codes & country of origin: the two facts that set your rate

People assume duty rates are complicated. They aren’t complicated; they’re just specific. The border doesn’t care that it’s “a hoodie.” It cares about two facts, and those two facts point to exactly one rate in a giant lookup table.

The Two Facts

Every duty rate on earth is a function of exactly two things:

  1. What it is captured by the garment’s HS code (its tariff classification).
  2. Where it’s from: its country of origin (where it was made, not where it shipped from).

Get those two right, and the rate is just a lookup. Get either wrong, and you can overpay, underpay (which brings penalties), or lose a 0% preference you were entitled to. Everything downstream depends on these two.

Fact one: the HS code

The Harmonized System (HS) is a global product-classification language.

Every garment gets a code.

The first six digits are the same worldwide; each country then adds its own digits for its own tariff schedule:

  • United States: a 10-digit HTS code, looked up on the USITC tariff schedule.
  • United Kingdom: a 10-digit commodity code, on the UK Trade Tariff.
  • The European Union has an 8-digit CN code, extended to 10 in the TARIC database.

For apparel, almost everything lives in two chapters, and the split matters because the rates differ:

  • Chapter 61: Garments that are knitted or crocheted (your jersey tees, French-terry hoodies, sweats, and most streetwear).
  • Chapter 62: Garments that are woven (shirting, denim, woven jackets, workwear).

Within those chapters, the code and therefore the rate is driven by a short list of attributes. Get these onto your tech pack and your commercial invoice and classification becomes routine:

  • Fiber content by weight: cotton vs synthetic vs blend. A cotton hoodie and a poly-blend hoodie can sit at different rates.
  • Knit vs. woven construction.
  • Garment type: sweatshirt, tee, trousers, jacket.
  • Gender/age: men’s, women’s, or children’s.

The fiber-content trap. Because the rate can flip on fiber content, “just under half cotton” and “just over half cotton” can be two different duty numbers. This is exactly why your composition (e.g., 80% cotton / 20% polyester) has to be accurate on the invoice and why it should already be locked on your tech pack. If you import the same style repeatedly, a broker can request a binding ruling so the classification is agreed upon in advance and can’t be second-guessed at the border.

Fact two: country of origin

Origin is where the garment was substantially made, not where it was warehoused or shipped from.

For clothing, the working test most schemes use is where it was cut and sewn.

A hoodie knitted from imported yarn but cut and sewn in Pakistan is, for most purposes, of Pakistani origin.

Origin matters because it decides whether you pay the full base rate or qualify for a trade preference, a reduced or zero rate under a scheme or agreement between the two countries.

And preferences are where the biggest money is. Which brings us to the reason a Sialkot-made order can be a genuine tariff advantage in two of the three big markets.

Rules of origin, briefly. To claim a preference you must prove origin. For apparel that historically meant a “double transformation” (fabric made and cut-and-sewn in the country). Both the UK and EU have relaxed these rules for many developing-country garments, so cut-and-sew in the origin country now qualifies in many cases even when the fabric was sourced elsewhere. The exact rule depends on the garment and scheme confirm it before you promise a client a 0% rate.

Chapter 03

The three destinations right now: US vs UK vs EU

Snapshot verified July 2026; recheck the live rate before quoting.

This is the chapter with a shelf life. The mechanics above are permanent; the numbers below are a photograph of a moving subject. We’ll flag exactly what’s stable and what’s in flux.

United States, the volatile one

The US rebuilt its tariff system twice in a year, so treat every US number as provisional. Here’s the honest state of play in mid-2026:

  • Base apparel rates are high to begin with. US MFN rates on clothing run roughly 0–32% by fiber and construction among the higher apparel tariffs in the developed world. A cotton-knit hoodie sits around 16.5% at the base, before anything is added.
  • The “reciprocal” tariffs were struck down. In February 2026, the Supreme Court struck down the country-by-country IEEPA “reciprocal” tariffs that had ranged as high as 40–50% on major garment-making countries. Duties paid under them are being refunded.
  • A temporary surcharge replaced them, and it’s about to expire. A flat Section 122 surcharge (reported around 10–15%) was put on almost all imports from late February 2026. By law, it lasts only 150 days and lapses around 24 July 2026 unless Congress acts. New Section 301 tariffs with a special mechanism for textiles and apparel have been proposed to take its place.
  • De minimis is gone. The old $800 duty-free threshold was suspended for China and Hong Kong in May 2025 and for all countries by August 2025, and the suspension continues. In plain terms: even samples and small test orders are now dutiable and need a customs entry.

Time-sensitive

The US surcharge picture is expected to change again right around when you’re reading this (the 24 July 2026 cliff). Do not price a US order off any number in this guide. Pull the live rate for your exact HTS code from the USITC tariff tool and confirm current surcharges with your broker on the day.

The United Kingdom is stable and friendly to preferred origins

Post-Brexit, the UK runs its own UK Global Tariff (UKGT).

For most clothing, the standard rate is around 12%. On top of duty, the UK charges import VAT at 20%, calculated on the customs value plus the duty.

But this is the important part: for anyone sourcing from a developing country, the UK’s Developing Countries Trading Scheme (DCTS) gives many origins a reduced or 0% rate.

Pakistan sits in the DCTS Enhanced Preferences tier, which means a large share of Pakistani-made apparel enters the UK duty-free, provided the rules of origin are met, and you hold proof of origin.

The UK relaxed those origin rules for garments in 2025, making them easier to satisfy.

European Union stable, with VAT that varies by country

The EU’s Common Customs Tariff sets apparel (Chapters 61/62) at roughly 12% MFN.

Imported VAT is then added, but the VAT rate depends on the member state you import from: 17% to 27% (Germany 19%, France 20%, Spain/Netherlands 21%, Italy 22%). Remember the EU taxes on CIF, so freight is inside the duty base.

And again, origin can wipe the duty out. Under the EU’s GSP+ arrangement, most textiles and clothing from Pakistan enter duty-free; the great majority of Pakistani apparel exports to the EU go in at a preferential rate.

GSP+ is conditional (it depends on Pakistan maintaining a set of international conventions) and is reviewed periodically, so it’s a genuine advantage but not a permanent guarantee.

Market Standard apparel duty Import tax on top Duty base Pakistan-origin
United States ~0–32% base
+ surcharge (in flux)		 None (no VAT) FOB No preference full stack
United Kingdom ~12% (UKGT) VAT 20% CIF 0% via DCTS Enhanced*
European Union ~12% (MFN) VAT ~17–27% CIF 0% via GSP+*
*Subject to rules of origin and valid proof of origin. Preference schemes are reviewed periodically and can change.
Figures are July-2026 snapshots for illustration verify the live rate for your specific code.

Chapter 04

The Origin Dividend: one order, three very different bills

Abstract percentages don’t land until you run one order through all three. So let’s take a real streetwear scenario and follow it across the borders.

The order

500 heavyweight cotton hoodies, cut and sewn in Sialkot, Pakistan. FOB value: $10,000 ($20/unit). Sea freight + insurance to the destination: ~$800. Cotton-knit garment, so it classifies in Chapter 61.

Into… Duty base Duty rate applied Duty owed Import VAT
United States $10,000 (FOB) ~16.5% base + surcharge ~$1,650 + surcharge + MPF & HMF fees —
United Kingdom $10,800 (CIF) 0% (DCTS Enhanced) $0 20% (recoverable*)
European Union $10,800 (CIF) 0% (GSP+) $0 ~21% (recoverable*)
*If you’re VAT-registered, import VAT is generally recoverable on your return, so its real cost is cash-flow timing, not margin. US surcharge deliberately left un-numbered because it’s mid-change (see Chapter 3). Illustrative only.

Read that table twice. The same garment, the same factory, and the same invoice value carry meaningful duty into the US and, for a VAT-registered importer, an effective duty cost of essentially zero into the UK and EU. That gap is what we call the origin dividend.

The Origin Dividend. When your goods are made in a preference-origin country, the duty line can go to 0% in markets that honor that preference. For a UK or EU brand, sourcing from a DCTS/GSP+ origin like Pakistan isn’t just a labor-cost decision; it can remove the tariff entirely. That’s a structural pricing advantage, not a discount.

The other side of the coin

The Origin Dividend does not apply to the US, which has no equivalent preference for Pakistan. Pakistani goods pay the full US tariff. If your main market is the US, the tariff maths is genuinely tougher right now regardless of where you make; plan for it rather than around it, and lean on the Chapter 7 landed-cost method so it’s never a surprise.

Chapter 05

Working with a customs broker (and the DDP shortcut)

You can, in theory, clear customs yourself. Almost no growing brand should.

A customs broker (often bundled with your freight forwarder) is a licensed specialist who files your entry, classifies your goods, calculates duty, and gets your shipment released.

For a modest per-entry fee, they remove the part of importing that is most likely to go expensively wrong.

What a broker actually does for you

  • Classifies your garments to the correct HTS/commodity/CN code and defends that classification if the border queries it.
  • Files the customs entry in the destination’s electronic system and calculates the duty, taxes, and fees owed.
  • Applies any preference you qualify for (DCTS, GSP+) so you don’t accidentally pay a rate you didn’t owe.
  • Arranges the customs bond where one is required (in the US, effectively any commercial shipment worth $2,500+).
  • Flags compliance requirements, labelling, fibre content, and any product rules before they become a hold at the port.

The importer of record and why it’s you

Whoever is the importer of record (IOR) is legally responsible for the duty, the accuracy of the declaration, and any penalties.

On standard terms, importing into your own country, that’s you even though the broker does the paperwork.

This is why “the factory said it was fine” is not a defense at your border. Know that you’re the IOR and you’ll take the documents seriously.

The shortcut: let the factory deliver duty-paid (DDP)

There’s one Incoterm that changes this entire conversation. Under DDP (Delivered Duty Paid), the seller, the factory, handles export clearance, freight, and the destination duty and clearance and delivers to your door as a seller, all-in, factory.

No customs account of your own, no surprise invoice, and no separate broker relationship to manage on your first orders.

DDP isn’t magic; someone still pays the duty, and it’s built into the quoted price, but it converts a variable, easy-to-miss cost into a single fixed number you can plan around.

For a brand doing its first few imports, that predictability is often worth more than shaving a few points off the FOB.

Rule of thumb. If you understand your codes and your volume is growing, build your own broker relationship it’s cheaper at scale and gives you control. If you’re on your first one to three orders and want zero border surprises, ask your factory for a DDP quote and compare the all-in numbers.

Chapter 06

The documents that clear customs

Customs delays are rarely about the goods.

They’re about paperwork that’s missing, inconsistent, or vague.

The border reads your documents, not your intentions, so the numbers have to match across every page.

Here’s the standard set for an apparel import.

The core documents (every shipment)

  • Commercial invoice. The most important single document. It states the buyer and seller, a clear description of each garment, the fiber content, quantities, unit and total value, currency, country of origin, and the Incoterm. This is what duty is calculated from; vague descriptions (“garments”) invite delays and misclassification.
  • Packing list. What’s physically in the shipment cartons, quantities, weights, and dimensions. It has to reconcile exactly with the invoice.
  • Bill of lading (sea) or air waybill (air). The transport contract and proof of shipment from the carrier.
  • Proof of origin. The document that unlocks a preference. Depending on the scheme and value, this is a certificate or a statement/declaration of origin from the supplier. No proof, no 0% rate; the border will simply charge the full rate.

Situational documents

  • Customs bond (US). Required for effectively any US commercial import of $2,500 or more. Your broker arranges it as a single-entry bond for one shipment or a continuous bond if you import regularly.
  • Importer Security Filing / “ISF 10+2” (US ocean). Advance cargo data that must be filed before a sea shipment leaves for the US. Late filing carries penalties, so your broker needs your details early.
  • Compliance documents. Anything your market requires for clothing, accurate fiber-clothing, and care labeling being the usual ones. Get these right at the factory, not at the port.

The rule that prevents most holds

One number, everywhere.

The fastest way to clear customs is boring: make every figure match across every document. The value, quantity, weight, description, and origin on the commercial invoice, packing list, transport document, and origin proof must all agree. A single mismatched carton count or a description that reads “apparel” instead of “men’s knitted cotton hooded sweatshirts, 80% cotton / 20% polyester” is what turns a two-day clearance into a two-week one.

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Chapter 07

Budgeting duty into your landed cost

Duty only hurts when it’s a surprise. Fold it into your landed cost from the start, and it becomes just another line you priced around.

Landed cost is the true, all-in cost of getting one unit to your warehouse, and it, not the FOB price, is the number your retail price should be built on.

The number that matters

The Landed Line

Never price off the FOB quote. Price off the Landed Line:

Landed cost = FOB + freight + insurance + duty + fees + clearance

Then, if you’re VAT-registered, treat import VAT separately; it’s usually reclaimable, so it’s a cash-flow item, not a margin item. Duty is the one that permanently eats margin, so it’s the one to nail before you set a price.

The US fee-people-people-forget

Into the US, two small fees ride along with almost every formal entry, and they apply even if your duty were zero:

  • Merchandise Processing Fee (MPF). 0.3464% of the goods’ value on formal entries, with an FY2026 floor of $33.58 and a cap of $651.50 per entry. On our $10,000 example, that’s about $34.64.
  • Harbor Maintenance Fee (HMF). 0.125% of the value on ocean shipments only; no minimum, no maximum. On $10,000, minimum and 12.50. Air and trucks are exempt.

Small on one order, but they’re part of the honest landed number and post-de-minimis; they now apply to the small parcels that used to skip them entirely.

A worked landed cost (US, per unit)

500 hoodies, $20 FOB each, into the US by sea (surcharge shown as a placeholder rate insert the live one):

  • FOB: $20.00
  • Freight + insurance (allocated): ~$1.60
  • Duty @ ~16.5% base (on FOB): ~$3.30
  • Surcharge @ [live rate]% (on FOB): verify & add
  • MPF + HMF (allocated): ~$0.09
  • Broker/clearance (allocated): ~$0.30
  • Landed cost ≈ $25.29 + surcharge per unit

That $20 hoodie is really a $25-plus hoodie before it earns a cent. Build your wholesale and retail prices off that number, and duty stops being the thing that wrecks a season.

Chapter 08

The pre-order customs checklist

Run this before you place any bulk order that crosses a border. Ten minutes here saves the customs-invoice ambush later.

  • Confirmed the garment’s HS/HTS/commodity code for my market.
  • Confirmed the country of origin (where it’s cut and sewn).
  • Checked whether a preference (DCTS, GSP+, or an FTA) applies and whether I’ll have valid proof of origin.
  • Pulled the live duty rate from the official tariff tool, plus any current surcharge (critical for the US, mid-2026).
  • Know my duty base: FOB for the US, CIF for the UK/EU.
  • Added import VAT (UK/EU) and confirmed whether I can reclaim it.
  • Added fees: MPF + HMF (US), or clearance/handling (UK/EU).
  • Decided who clears it: my own broker or a DDP quote from the factory.
  • Confirmed the documents invoice, packing list, transport doc, and origin proof will all show matching figures.
  • Rebuilt my wholesale/retail price off the Landed Line, not the FOB quote.

The one-line summary. Your duty is set by two facts (what it is + where it’s from), assembled as a stack (base ± preference/surcharge + fees), on a base that’s FOB or CIF depending on the market and the only number you should ever price from is the landed cost with all of that already in it.

Frequently asked questions

There’s no single figure it depends on the garment’s HS code and its country of origin. Standard apparel rates run roughly 0–32% in the US and around 12% in the UK and EU. But trade preferences can take that to 0% (for example, Pakistani-made apparel into the UK under DCTS or the EU under GSP+), while surcharges can push the US figure higher. Always look up the live rate for your specific code and origin before pricing.

Into the US, yes the old $800 duty-free “de minimis” threshold was suspended in 2025 for all countries, so even samples and small test orders now need a customs entry and are dutiable. The UK and EU still have low-value thresholds (the EU exempts duty, though not necessarily VAT, on consignments under €150), but these are for genuinely low-value shipments, not a way around duty on commercial orders. Check the current rule for your market.

Duty is a tariff on the goods, set by the garment’s code and origin it’s a permanent cost that eats your margin. Import VAT (in the UK and EU; the US has none) is a consumption tax charged on the customs value plus duty. The key difference: if you’re VAT-registered, you can usually reclaim import VAT on your return, so its real impact is cash-flow timing rather than lost margin. Duty is the one to plan hardest around.

In the UK and EU, often yes, significantly. Pakistan sits in the UK’s DCTS Enhanced Preferences tier and holds EU GSP+ status, and most Pakistani-made apparel enters both markets duty-free when the rules of origin are met and valid proof of origin is provided. In the US, it’s different: there’s no equivalent preference, so Pakistani goods pay the full US rate. Preference schemes are reviewed periodically, so confirm current status before relying on it.

For any commercial import, effectively yes a broker (often via your freight forwarder) classifies your goods, files the entry, calculates duty and taxes, applies any preference, and arranges a customs bond where one’s required. The alternative is asking your factory for a DDP (Delivered Duty Paid) quote, where they handle clearance and duty and deliver to your door for one all-in price. That’s often the simpler route for your first few orders.

DDP (Delivered Duty Paid) is an Incoterm where the seller handles export, freight, and the destination duty and clearance, delivering finished goods to your address as a single fixed price. You don’t pay the duty separately it’s inside the quote but you get total cost certainty and no surprise border invoice. For brands on their first one to three imports, DDP removes the part of importing most likely to go wrong. As you scale and understand your codes, running your own broker relationship usually becomes cheaper.

Disclaimer

This article is general information for apparel founders, not customs, legal, tax or financial advice. Duty and tariff rates change frequently and depend on your exact goods and origin. Confirm current rates on your market’s official tariff tool or with a licensed customs broker before placing an order or setting a price.