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Home > Guides > Tariff vs Duty
A tariff is the rate schedule a government sets: the published list of percentage charges by product category and country. A duty is the actual money owed on your specific shipment when it crosses the border. Think of the tariff as the price list and the duty as the bill.
This is general information, not tax advice.
| Tariff | Duty | |
|---|---|---|
| What it is | The official schedule of rates | The amount payable on one shipment |
| Set by | The importing country's government | Calculated from the tariff at the border |
| Applies to | Whole product categories and countries | Your specific package |
| Changes when | Governments update trade policy | Every shipment, based on its value and classification |
| Paid by | Nobody directly; it is a schedule | Usually the receiver, unless the sender prepays |
A tariff is a government-published list that says, in effect: goods of this type, coming from that country, are charged at this rate. The rates live in enormous classification systems (the Harmonized System, with its HS codes) where nearly every product on earth has a number and a corresponding rate. Tariffs exist for all kinds of policy reasons: protecting domestic industries, raising revenue, or pressuring another country in a trade dispute. They change when governments change policy, which is why a rate that applied last year may not apply this year.
One detail that confuses people: the same product can face different tariff rates depending on where it was made. A cotton shirt from one country might enter duty-free under a trade agreement while the identical shirt from another country faces a double-digit rate. The tariff schedule cares about origin, not just the product.
A duty is what you actually owe. When your package reaches the border, customs classifies it under an HS code, looks up the tariff rate for that code and country of origin, applies it to the declared value, and produces a number. That number is the duty. Add in any applicable sales taxes and carrier brokerage fees, and that is the total your receiver is asked to pay before the package is released.
Duties can also be specific rather than percentage-based: a fixed charge per kilogram, per liter, or per unit, depending on the product. Alcohol, tobacco, and some agricultural goods commonly use specific duties. Either way, the duty is always about your shipment, not about the schedule in the abstract.
Picture a small business in Toronto shipping handmade leather wallets to customers in the US. The tariff is the US government's published rate for leather goods from Canada. The duty is the dollar amount the US buyer owes on their particular order, calculated from that rate times the wallet's declared value. If the order falls under the de minimis threshold, the duty on that shipment is zero even though the tariff rate still exists on paper. The schedule did not change; the shipment just qualified for an exception.
This is also why two identical packages can owe different duties. Different declared values, different countries of origin for the components, or a trade agreement that covers one shipment's goods but not another's will all move the final number while the tariff schedule sits unchanged.
Governments set tariffs through legislation, executive action, or trade agreements. Collection happens at the border through customs agencies (CBP in the US, CBSA in Canada), usually via the carrier or a customs broker acting as intermediary. The exporter never pays the importing country's duty directly; the bill lands on the importer of record, which for a consumer parcel is normally the person receiving the package. Senders who want to spare their buyers the surprise can prepay through delivered-duty-paid services, where offered.
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