What is Tariff Stacking, and How Does it Affect Importers?

Due to a number of executive actions from the White House, one word has been on everyone’s mind lately: tariff. More specifically, businesses and personal importers in the United States have both been confronted by the development of stacking tariffs. 

Key Takeaways

• Tariffs on goods imported into the United States can stack based on the commodity and country of origin.
• Some types of tariffs that stack on one another are from executive orders and sections of the 1974 Trade Act and the Trade Expansion Act of 1962.
• Passenger vehicles, steel, and aluminum are among the commodities most prone to tariff stacking.
• The majority of imports from China to the U.S. are subject to multiple tariffs, resulting in an effective rate of up to 245% on certain goods.

In this article, I’ll explain how tariff stacking works, some scenarios in which stacking may apply, and legal methods of mitigating the issue. 

Tariff Stacking: Key Terms and Definitions

Tariff stacking refers to multiple tariffs simultaneously being applied to a single commodity. When several of these levies are stacked together, they are often referred to as a cumulative tariff. 

In early 2025, the executive branch of the United States federal government began levying multiple types of tariffs specific to factors like country of origin, commodity classification, and calculations based on trade deficits with other countries.

To gain a more complete understanding of how tariffs can stack, let’s look at some of the different types of import taxes countries use.

• Duties: These are technically separate from tariffs, but the terms are often used interchangeably. Duties are usually assessed based on the value or weight of goods imported. They are less subject to fluctuation than tariffs. 
• Anti Dumping/Countervailing Duties (AD/CVD): Tariffs imposed by the U.S. on goods from countries or suppliers who are suspected of selling products under market value to damage the domestic economy. 
• Ad Valorem Tariff: Meaning “according to value”, it describes a tariff or duty that is assessed as a percentage of an item’s cost.
• Specific Tariff: Tariffs expressed as a set monetary value per unit, contrasting with ad valorem’s percentage-based determination.
• Compound Tariff: A combination of ad valorem and specific tariffs.
• Reciprocal Tariffs: This type of tariff is applied to imports from a country that has already imposed tariffs on the exporting country’s goods.
• Section 301 Tariffs: Additional trade levies imposed in accordance with Section 301 of the Trade Act of 1974.
• Section 232 Tariffs: These can be applied according to rules set forth in Section 232 of the Trade Expansion Act of 1962. Along with the previously mentioned Section 301 tariffs, these are examples of AD/CVDs.

Now that we’ve defined these different types of tariffs, let’s look at some examples of how they might stack on top of each other.

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How Tariff Stacking Works: Examples and Scenarios

To illustrate how multiple tariffs can stack on a single commodity, let’s look at automobile imports from Japan. Personal and commercial importers have brought Japanese vehicles into the US for decades. There is no free trade agreement between the two countries when it comes to vehicles, so importers are charged an ad valorem duty rate of 2.5%. 

As of this writing, cars imported from Japan into the US are subject to two additional tariffs, which are:

• The flat 10% rate applied to imports across the board
• A 25% Section 232 tariff that applies specifically to automobiles of non-USMCA origin

For simplicity’s sake, let’s say you want to import a small car from Japan to the United States. The car is valued at $10,000. The following table will show you how the duty and tariff calculations would work on such a transaction.

Between tariffs and duties, the original cost of the vehicle jumps almost 36%.

I can’t discuss tariff stacking without also mentioning another Asian trade partner: China. Between reciprocal and commodity-specific tariffs, commercial importers in the US have seen tariff rates of 145% or more on Chinese imports.

My previous example was based on a personal transaction. Now let’s take a look at a commercial shipment of blenders to see what import businesses in the US can expect to pay on goods from China.

In China’s case, the 10% flat fee mentioned in the first graphic is superseded by the reciprocal rate.

This amounts to an increase of almost 175% over initial costs. Keep in mind that these rates can change quickly during times of high tension in international trade.

Given the sharp rise in the overall cost of popular consumer goods, it’s no wonder importers are looking for ways to eliminate or mitigate these tariffs. There are some options available to do so.

Related: How to Import Vehicle to the USA

Can I Avoid Tariff Stacking?

With the 10% flat tariff in effect on all goods imported to the USA, regardless of country of origin, tariff stacking can be difficult to avoid. However, it can be mitigated by sourcing your products from countries with whom the USA shares a free trade agreement (FTA).

Free trade partners with the U.S. receive preferential rates of duty, which usually amount to no duty at all. Just realize that this is only likely to apply to the general rate of duty assigned to the product by its HTS code, not the flat tariff. 

In theory, a product with a 5% ad valorem duty assigned by an HTS code could be reduced to 0% when imported from a nation with an FTA. In which case, only the reciprocal tariff of 10% would apply upon entry. The same product imported from a non-FTA nation would result in a 15% tariff.

So, if you have a choice of sourcing goods from an FTA partner and a country subject to the general rate of duty, assuming product costs are the same, you’ll pay less overall in import taxes from the FTA country.

The best way to make sure you don’t pay more in import fees than necessary is to have a licensed customs broker handle the clearance process on your behalf. 

Related: How Reciprocal Tariffs Impact Global Trade

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