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What are the Custom Duties when Importing Clothes from Asia?

Get to know and understand custom duties of clothes for popular importing countries. This info is necessary to make sure your import clothes passes through customs office smoothly and reach your warehouse destination legally.


What are the Custom Duties when Importing Clothes from Asia

Understanding custom duties is the most complicated part of a clothes importing business due to the fact each country has a different set of rules, regulations and fees which you need to know of. If you aren’t knowledgeable with custom duties then chances are, your clothing products will not get through the customs office and could be held hostage by the country where you are about to import clothes. This problem could be detrimental to your company and may affect your business’ financial flow.

When working with clothing manufacturers in China, you need to be aware of custom duties so you can apply the rates and work on necessary papers once you start importing to certain countries. Here are vital information any importer needs to know on custom duties for importing clothes to usual countries being imported to:

custom duties for importing clothes to US

1. USA

All import clothes are charged with custom duties if they are valued at $200 and above. The duty rate for regular clothing products is at 16.5% while this number could be a bit more expensive for authentic clothing which are made of wool and fur such as coats and jackets. The US do not have VAT which means you cannot expect additional taxes aside from custom duties. However, they have the Federal Excise Tax charged on luxury products and fortunately, it does not cover clothing and garments.

All imported products to the US are subject to Merchandise Processing Fee (MPF) which is based on the value of the order and is divided into a couple of categories:

  1. Imported products with value less than $2500: MPF tax is at $2, $6 or $9 per shipment depending on the type of product/s.
  2. Imported products with value $2500 or more: MPF tax is 0.3464% of total value.

(Minimum MPF: $25, Maximum MPF: $485)

The MPF tax is almost negligible when it comes to import clothes and garments since they only accumulate for a small amount with this type of product.

For import clothes transported by sea, Harbor Maintenance Fee (HMF) is applied as a custom duty but much like the MPF, the tax value is close to negligible since the current rate is only 0.125% of the product value.

All custom duties and tariffs with clothes in the US are calculated based on the Free on Board (FOB) value of the import clothes which covers the following factors;

  • Product cost
  • Transportation cost (from Port of Loading in China)
  • Export clearance (China)

custom duties for importing clothes to EU

2. European Union

The European Union is an economic group consisting of 28 states all located within Europe. All of these states follow the same custom duties for importing clothes coming from non-European Union countries. In this scenario, tariffs with clothes will only take its toll once and are no longer added to the prices of the import clothes once they enter European Union territory. Clothing products which are not manufactured in Europe have low customs charges and are usually even as low as 0% for standard garments.

However, the EU is strict with products belonging under industries which are strengths of the EU. For example, garments like bags and shoes have customs duties of 10%-12% since EU countries are known producers of such garments. Furthermore, most countries have VAT rates applied to import products as well which includes clothing. But the VAT rate is often reduced to a minimum and is added to the customs duty which makes it close to negligible. It is only for goods above a certain value of around 10-22 euros so that it doesn’t apply to small quantity deliveries or prototype manufacturing when samples are sent.

All custom duties and tariffs in EU are calculated based on the Cost Insurance Freight (CIF) value of the import clothes which covers the following factors:

  • Product price
  • Shipping fees and logistics costs
  • Product development expenses
  • Insurance
  • Tooling fees

The custom duties and tariffs in EU do not cover the following expenses;

  • Sourcing fees
  • Transportation costs (from Port of Loading in China)
  • Port of Destination costs
  • Bill of Lading’s declared value

custom duties for importing clothes to Canada

3. Canada

Canada has arguably the most complex custom duties and tariff system because there are 3 different sales taxes to monitor aside from the import duties.

  1. Goods and Services Tax (GST)
  2. Harmonized Sales Tax (HST)
  3. Provincial Sales Tax (PST)

At least one of the sales taxes apply in Canadian states but none of the states cover all three sales taxes. These sales taxes are charged based on the location of the importer instead of import clothes’ origin.

Alberta: GST only

Ontario: HST only

Prince Edward Island: GST & PST

custom duties for importing clothes to Australia

4. Australia

Australia has a fairly similar or lower custom duties and tariffs compared to the US and EU mainly because it is a smaller market with an isolated geographical location. Regular import clothing products are charged at 10% while authentic garments can be charged with a slightly higher custom tax. Products from China also get to enjoy a minimum threshold since products valued up to AU$1000 are exempted from custom duties, tariff rates and Import Processing Charge.

The lone relevant custom tax in AU is known as the Goods and Services Tax (GST) which currently sits at 10% and is added on top of the customs value of the products, transportation and insurance fees. On the other hand, the Import Processing Charge (IPC) only applies if the total value of the import clothing is more than AU$1000 and is dependent on the following factors;

  • Mode of transportation (air or sea freight)
  • Customs value (import clothing valued from AU$1000-AU$10,000 and clothing products exceeding AU$10,000)

(Minimum IPC: AU$40, Maximum IPC: AU$50)

All custom duties and tariffs with clothes in the US are calculated based on the Free on Board (FOB) value of the import clothes which covers the following factors;

  • Product cost
  • Transportation cost (from Port of Loading in China)
  • Export clearance (China)

custom duties for importing clothes

Anti-Dumping Duties

China has provided specific industries and domestic manufacturers with subsidies which means these relevant Chinese manufacturers can sell their products below the standard market value for a price dump. Other countries such as the US and EU do not agree with these privilege resulting to anti-Dumping custom duties. They target these Chinese manufacturers and may sometimes cover an entire industry. Affected manufacturers should be avoided form the beginning for the product development process.

As a clothing manufacturer, you must be wary of anti-dumping custom duties since they could charge you for as much as 40%-60% more expensive than your average custom duties for importing clothes. If you are involved with a domestic manufacturer or supplier covered by anti-dumping duties, then might as well consider working with different partners to avoid the anti-dumping custom duties.

return policy on custom duties for importing clothes

Are Custom Duties for Importing Clothes Refundable?

Custom duties and tariff rates are never refundable in all type of imported products and not only in import clothing. This is the reason why manufacturers include customs charges as a factor to product costing. This is also evident when purchasing branded clothes which are made in China, some import clothing products are more expensive when bought in the US compared to Australia. It is because the customs charges are taking its toll.

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