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    1. strattongeorge is offline

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      #1

      Question about product classification of finished product made up of two commodities

      HI everyone,

      I'm hoping to get a little clarification on how duties would be applied to a custom product we make (intended for retail.)

      We want to import a finished product that is made up of Commodity A and Commodity B. Together, these two commodities make our finished product.

      The problem we're trying to solve is that the actual value of Commodity A is much cheaper than the value of Commodity B, and Commodity A comes with a hefty duty rate. Based on inquiries with the customs people it looks like they'd tax our product as Commodity A, even though the majority of the declared value is derived from Commodity B.

      I am hoping that someone can give me some advice on how to handle this. Anyone who looks at our product would probably be inclined to classify as being Commodity A, but I would have thought we could have declared the value of both of the commodities that make up our product.
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    2. WholesaleMod's Avatar
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      #2
      Hi George,

      Welcome to Wholesale Forum

      Can you share what Commodity A and Commodity B are?

      Is it uneconomical to import them separately, and "assemble" them once inside the US?
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    3. strattongeorge is offline

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      #3
      Because it is a new product I would rather not say what they are yet, if it can be avoided. Hopefully Com A and Com B are suitable to work this out theoretically.

      Assembling in the US does become cost prohibitive given that it is a relatively low-cost retail item.

      Based on your reply it sounds as if this might be the only way to get a totally accurate classification. I hope I'm wrong though.

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      #4
      Hi George,

      The only way you can legally avoid paying the higher import duty is if:

      Option 1. You can import the product in parts and reassemble it once inside the US, so that the higher duty rate is only applied to the parts containing Commodity A

      Option 2. You reclassify the product under a different harmonized system code, however make sure you seek legal advice from an expert in this field in case US customs challenge your classification:

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      Hope this helps

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