section 321

How To Benefit from Duty-Free Importing with Section 321

By | 2023-11-08T00:03:30+00:00 October 21st, 2021|U.S. Customs|

As an importer, it’s essential that you make the most out of Section 321 to help keep you in the green and improve margins, while lowering overall tax liability.

Moving commercial goods from the other side of the globe, navigating the logistics of your supply chain, and building a great flow of sales is challenging for anyone. On top of all this, trade tensions between two key players: China and the US, can create big slowdowns.

So, how can you benefit from Section 321? 

section 321

Understanding Section 321

Section 321 allows you to import goods valued at up to $800 without having to pay tax. Of course, there are some exceptions to consider.

This measure was designed to protect the country against any illegitimate trade, while still offering duty-free shipment for those imports that qualify. With that being said, you do need to have imports that come from specific countries, such as Mexico or Canada. Otherwise you will not qualify. Yes, it’s an extra consideration, but also an important thing to keep in mind if you wish to benefit.

As defined by CBP:

“De minimis provides admission of articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800. The de minimis threshold was previously $200, but increased with the passage of the Trade Facilitation and Trade Enforcement Act (TFTEA).”

What are the benefits that come from Section 321?

Most obviously, you can access a multitude of benefits, such as lower tariffs. Aside from that, it’s quite possible that you will experience a faster delivery time and customs clearance.

You end up with your goods a whole lot faster, which also gives you the ability to ensure that you maintain quick delivery times for your customers. In the end, everyone wins, and that’s what makes it well worth it. All these things add up to deliver a much better customer experience. 

How can you qualify for Section 321 benefits?

You will need to order goods from China, as you would normally do. Then you would need to arrange to have them shipped to Mexico or Canada. Then you must ship these to your own distribution center or even the final destination as needed. It’s also possible to store the items in Mexico or Canada for extended periods as well.

As you can see, Section 321 is a great option if you want to lower the bottom line for your importing business. On top of that, it also allows you to enjoy some lower costs, while also stepping away from any issues related to storing your items or dealing with higher import prices. Thankfully, this is a great way for your business to speed up the delivery time, while also lowering taxes and adjacent import costs.

In order to ensure that you benefit from Section 321, it is critical that you work with an experienced customs broker, that can help you identify whether qualification for Section 321 advantages is possible and how to make it happen within your particular supply chain processes.

To start the conversation with a broker, click here.