Overview of Shipping Duty Rates Across the World
Duties
Duties are calculated by using the following formula:
Duties= Import Rate*(Product Cost+Shipping Cost per Unit)
The shipping cost was based on the Transportation/Insurance Rate (T/I) of the unit’s weight.
Option 1: Assembly in New Orleans
Of the potential assembly sites, the New Orleans site is the one not in a Free Trade Zone (FTZ). While the gadgets are made in New Orleans and are assessed no import duty, the gidgets, which are made in Brussels, Belgium, must be taxed at a 7% rate duty coming into the United States at a $25 dutiable value. After assembly in New Orleans, the window units will be distributed to the target markets, where a duty and drawback will be applied. Because the gidget came from the European Union (EU) to the US and then back to the 3 EU countries, the dutiable value is only assessed to the “total assembly cost minus gidget cost” at the 3 EU distribution sites. For this option, the total assembly cost was $91.48, and the gidget cost was $25, creating a dutiable value of $66.48. The duty applied from the US to the EU is 10%, and 18% to Istanbul. The duty is calculated using the formula shown above with the T/I rate added on. The duty drawback is 99% of the original duty rate (gidgets imported from Brussels to New Orleans), then multiplied by the demand to have the total drawback cost for each location.
Option 2: Assembly in Istanbul, Turkey
The option to produce the window units in Istanbul, Turkey requires gidgets and gadgets to be imported. Because the gidgets and gadgets are entering the Turkey’s FTZ, there is no import duty applied to the products. After the window units are assembled, an import duty will only be applied to the goods sent to the countries within the EU (Spain/Portugal, Italy, and France). The import duty is applied to those countries because they lie in a different zone than the production site in Turkey. Even though the EU is a FTZ, only transactions made within that zone are beneficiaries of the rule. The
Duties are calculated by using the following formula:
Duties= Import Rate*(Product Cost+Shipping Cost per Unit)
The shipping cost was based on the Transportation/Insurance Rate (T/I) of the unit’s weight.
Option 1: Assembly in New Orleans
Of the potential assembly sites, the New Orleans site is the one not in a Free Trade Zone (FTZ). While the gadgets are made in New Orleans and are assessed no import duty, the gidgets, which are made in Brussels, Belgium, must be taxed at a 7% rate duty coming into the United States at a $25 dutiable value. After assembly in New Orleans, the window units will be distributed to the target markets, where a duty and drawback will be applied. Because the gidget came from the European Union (EU) to the US and then back to the 3 EU countries, the dutiable value is only assessed to the “total assembly cost minus gidget cost” at the 3 EU distribution sites. For this option, the total assembly cost was $91.48, and the gidget cost was $25, creating a dutiable value of $66.48. The duty applied from the US to the EU is 10%, and 18% to Istanbul. The duty is calculated using the formula shown above with the T/I rate added on. The duty drawback is 99% of the original duty rate (gidgets imported from Brussels to New Orleans), then multiplied by the demand to have the total drawback cost for each location.
Option 2: Assembly in Istanbul, Turkey
The option to produce the window units in Istanbul, Turkey requires gidgets and gadgets to be imported. Because the gidgets and gadgets are entering the Turkey’s FTZ, there is no import duty applied to the products. After the window units are assembled, an import duty will only be applied to the goods sent to the countries within the EU (Spain/Portugal, Italy, and France). The import duty is applied to those countries because they lie in a different zone than the production site in Turkey. Even though the EU is a FTZ, only transactions made within that zone are beneficiaries of the rule. The