Imports and exports form the basis of all international trade. These transactions make it possible to start global eCommerce businesses and to ship goods around the world. They even have non-business uses, like moving all of your personal effects abroad during an overseas move. Still, if you’re new to the world of global trade, you may need a quick lesson on how imports and exports work.
Imports are goods that are shipped into the country from abroad while exports are goods shipped out of the country. In the U.S., imports and exports are overseen by Customs and Border Protection (CBP) which enforces the regulations and tariffs associated with all products shipped into or out of the country.
Our guide below covers the basics of importing and exporting, like the primary government agencies involved, whether or not you need a license, and how to get started.
Imports and exports as a concept are pretty simple to understand. Imports are goods entered into the country from abroad, whereas exports are shipped out of the country to another nation or territory.
Importing can be beneficial for a number of reasons. The foremost being that imports give countries access to goods that they normally would not be able to produce on their own. By importing goods, not only are you receiving goods that you need or want, but you’re forming a positive trade relationship with the country that you’re importing from.
The same goes for exports. By exporting goods that your country specializes in or has an abundance of, you can provide goods to another country that needs them, thereby helping another nation and profiting in return.
In the U.S., various government agencies oversee nearly every aspect of everyday life, so it stands to reason that there would be at least a few involved in determining what goods are allowed to be shipped in or out of the country.
Depending on what you plan to import or export, where you plan to ship it, and how, there are a number of rules and regulations you’ll be required to abide by. We’ll detail some of the most common agencies responsible for overseeing imports and exports.
There are numerous U.S. agencies involved in international trade, but almost none are more concerned with the import/export process than the CBP.
CBP oversees all aspects of the import/export process, like ensuring that the goods you enter into the country are legal and compliant for Customs clearance, collecting import duties and tariffs, and managing much of the documentation that allows goods in or out of the country. In total, CBP enforces rules and regulations for 47 other government agencies.
The CBP will also help you during the import process. You can contact a CBP specialist before your import arrives at its port of entry and they will help you by providing import classification, applicable duty rates, and answers to any other questions you might have.
It’s highly recommended that new importers familiarize themselves with all aspects of the CBP and their involvement in both import and exports. You can even find tips for new importers on the CBP website.
The FDA is another government agency commonly involved with the importing process. The goal of the FDA is to check the safety of products intended for animal and human use. The products they regulate include:
The FDA has different rules regarding different products. Because of this, you need to check if your product falls under one of these categories. From there you can consult the FDA’s website for further importing requirements for that product.
The FDA regulates exports that fall under their jurisdiction as well. They do this because countries who are trading partners with the U.S. have their own guidelines for imports. The FDA ensures that our exports meet the standards of other countries.
The EPA monitors the foreign trade of products that may cause harm to the environment. The categories of products they regulate are:
The EPA regulates other products that would be considered “other requirements.” These include coatings used in architecture, products used for personal care/cleaning, and plumbing products. Just like with the FDA, the EPA’s regulations differ depending on the product being imported.
Another regulation of the EPA that importers and exporters must follow is the Greenhouse Gas Reporting Program (GHGRP). This regulation applies to exporters and importers of the following products:
There are specific requirements for each of these products that would necessitate reporting to the EPA. The specific requirements state that if someone exports or imports an equivalent of 25,000 metric tons of coal-based liquid fuels, petroleum products, industrial gasses, carbon dioxide, or fluorinated GHG, then it must be reported to the GHGRP.
The CDC may not be considered a trade agency, but they do pay close attention to imports coming into the country. Specifically, the CDC watches out for imports that could potentially cause disease among humans.
The CDC mainly focuses on animal imports, biological materials, or the importation of human remains for burial, entombment, or cremation. CDC regulations differ depending on the animal and from what country the animal is coming from.
For example, dogs imported into the U.S. must appear to be healthy in order to be allowed entry. However, a dog coming from a country that has a high risk for rabies will face a temporary suspension.
If you want to transport biological material, then you will need an Import Permit Program (IPP). The IPP regulates biological materials that could cause a human to become ill with an infectious disease.
The CDC has various requirements for the importation of a human body. The requirements change depending on the circumstances. These circumstances can range from:
APHIS, a branch of the U.S. Department of Agriculture (USDA) performs a similar role to the CDC when it comes to animal imports and exports. When animals arrive at the border APHIS ensures that they are healthy and can make entry. Like the CDC, APHIS enforces restrictions on animals coming from regions that have health issues.
The goal of APHIS is to continue the flow of agricultural trade. They do this by making sure that exported agricultural products meet the importing country’s guidelines. APHIS also ensures that imported agricultural products meet its requirements.
One of the foremost duties of the ITA is to ensure that U.S. trade laws are not broken. These rules are enforced by the Bureau of Industry and Security (BIS) which plays a large role in the export process by administering laws and regulations regarding products leaving the country.
The primary responsibility of the BIS is to enforce the Export Administration Regulations, or EAR. EAR is used to regulate items for military use or dual-use items that can have both military and civilian uses.
The ITA also states that importers and exporters must follow the procedures of the International Trade in Arms Program (ITAR). This program is enforced by the U.S. Department of State. ITAR regulates goods and services that have been designed, modified or can be upgraded for military use.
The ITA suggests that you research the country you plan on exporting your product to in order to ensure that all regulations are met. Many countries have their own import regulations that must be followed so that they know your product is safe.
According to CBP standards, an importer doesn’t need to have a license. However, other government agencies might require one depending on what you import. The CBP only acts as an administrator for these government agencies.
The CBP also plays a part in the export process. Some of the laws they follow are the same as other agencies. Exports don’t usually require permits or licenses and the process is typically much shorter.
If you do not need a license or permit for an import, you will still have to complete CBP document forms. Likewise, you should research your export to make sure that it doesn’t require a permit or license as well.
The Department of Homeland Security (DHS) is the parent agency to the CBP. On the DHS’s site, you can find more information necessary for importing. This includes necessary forms to fill out and each step of the import process.
You will need a customs bond under two circumstances.
The first is if you are importing commercial goods that have a value of over $2,500. Commercial goods are goods and services that are made available for purchase. The second circumstance is if the goods you are importing are regulated by another federal agency.
If you need a customs bond, there are two different types that you can obtain. The first is a continuous bond. This bond will cover you for any number of imports for the entirety of a year.
When you only import items on a less random basis you should use a single transaction bond. This bond is good for one time use only.
There are many different documents that are needed for importing and exporting. However, there are two documents that you can count on needing for both. These are the bill of lading and the commercial invoice/packing list.
The bill of lading is an extremely important document that both importers and exporters need. This document is signed by both the exporter and the importer. The document also contains important information regarding the import.
The second document that both importers and exporters will need is the commercial invoice and packing list. While these documents might seem different since they each have different names, the two are grouped together because they contain roughly the same information.
The only real difference between the two is that the packing list requires a more detailed summary of the goods. When you fill out these documents, you need to make sure that the information on each document matches one another.
The following information that will need to be included on the commercial invoice is the:
For the packing list, you will have to include the following information regarding the goods that are being shipped:
There are many more documents used in the import/export process depending on what you plan on shipping, where you’re shipping it to and a variety of other circumstances. Make sure to familiarize yourself with all of the documents needed for imports and exports.
In addition to the documents you'll need to get started, there's many steps involved in starting an import export business. To learn more, check out our article How to Start an Import Export Business: A Guide for Entreprenuers.
When you import items into the U.S., you will likely have to pay a tariff on them. The CBP collects tariffs on behalf of the Department of Commerce or DOC.
The rates of tariffs can vary depending on what item you are importing and from what country it is coming from. Tariff rates are determined by an item’s HTSUS code — a 10-digit code used for tariff and product classification. Every internationally traded product falls under a specific HTS code which you can find by using an HTS code lookup tool.
This code will let you know the duty owed on a product depending on which country it’s being imported from and whether or not the U.S. has a free trade agreement (FTA) with said country. If there is an FTA in place, tariff rates will either be reduced or free. Otherwise, you’ll likely owe some form of duty on your import.
Be sure to research the goods you want to import to ensure that you’re using the correct HTS code and know the amount of duty you will owe on your import.
The whole process of importing and exporting can be a real hassle. Between all of the government agencies and their regulations, it’s hard to know if you’re following the right steps. A customs broker can help take on this burden of responsibility.
Customs Brokers are tested and licensed by the CBP. Therefore, you can always trust that your customs broker is up to date on all of the current federal regulations. Customs brokers can even oversee your transactions.
Here at USA Customs Clearance, we can provide all of these services for you. Our experts know the protocols of the CBP and any other government agencies that regulate your imports or exports. The combined experience of our costume brokers is 100 years.
If you're just looking for some answers to questions you're not clear about then you can still contact us. Our licensed customs brokers can give you clarity on anything you might be unsure of during a consulting session. Contact us today and let us take care of all of your import and export needs.