FTA Duty Savings: Does Your Product Qualify for Preferential Rates?
The US has free trade agreements with 19 countries. Many importers pay full MFN duty rates when they could pay zero. Here's how to check.
How FTA rates work
When the US signs a free trade agreement with a country, they negotiate reduced duty rates for specific products. These "preferential" rates can be significantly lower than the MFN (Most Favored Nation) rate that applies to non-FTA countries.
From China (no FTA): 16.5% MFN + 7.5% Section 301 = 24% → $24,000 in duties
From Vietnam (no FTA): 16.5% MFN → $16,500 (save $7,500 vs China)
From Mexico (USMCA): 0% → $0 (save $24,000 vs China)
From Korea (KORUS): 0% → $0 (save $24,000 vs China)
Same product, same quality — $24,000 difference based on where you source it.
US FTA partner countries
| Agreement | Countries | Year |
|---|---|---|
| USMCA | Canada, Mexico | 2020 |
| KORUS | South Korea | 2012 |
| AUSFTA | Australia | 2005 |
| CAFTA-DR | Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua | 2006 |
| Chile FTA | Chile | 2004 |
| Colombia TPA | Colombia | 2012 |
| Peru TPA | Peru | 2009 |
| Panama TPA | Panama | 2012 |
| US-Singapore | Singapore | 2004 |
| US-Bahrain | Bahrain | 2006 |
| US-Morocco | Morocco | 2006 |
| US-Oman | Oman | 2009 |
| US-Japan (Stage 1) | Japan | 2020 |
Notable absences: China, India, Vietnam, Bangladesh, Indonesia, Thailand — the largest US import sources by volume have no FTA with the US. Products from these countries pay full MFN rates plus any applicable Section 301/232 tariffs.
How to qualify for FTA rates
Having an FTA doesn't automatically mean your product qualifies. You need to meet Rules of Origin — proof that the product was sufficiently produced in the FTA country, not just transshipped through it.
Common rules of origin
- Wholly obtained — agricultural products grown, minerals extracted, or goods manufactured entirely in the FTA country
- Tariff shift — raw materials from outside the FTA zone were transformed into a different product (changed HTS heading)
- Regional value content — a minimum percentage of the product's value was added in the FTA zone (typically 35-55%)
Staging baskets
FTA rates don't always start at zero. Many products are "staged" — the rate decreases over several years until reaching zero. The staging basket tells you the phase-in schedule:
| Basket | Meaning |
|---|---|
| Immediate | Zero duty from day one of the FTA |
| 5 Years | Rate reduced to zero over 5 equal annual cuts |
| 10 Years | Rate reduced over 10 years |
| Stage 6 | FTA-specific staging category (check agreement text) |
| Excluded | Product excluded from FTA preferences |
The FTA data gap nobody talks about
The US government's official FTA rate data (from Trade.gov) only covers HTS chapters 01-61 and 78-86. Chapters 62-77 and 87-97 have no FTA data at all. This affects some of the highest-volume import categories:
- Chapter 62 — Woven apparel (not knitted)
- Chapters 72-73 — Iron and steel articles
- Chapter 71 — Jewelry and precious metals
- Chapter 70 — Glass and glassware
- Chapter 87 — Vehicles and parts
- Chapters 90-97 — Instruments, arms, furniture, toys
This isn't documented anywhere on Trade.gov. Any tool that uses their API without knowing this will show "no FTA rates" for products that absolutely have FTA eligibility — because the data simply isn't in the source.
Our /classify response now includes census_duties with a full rate provision breakdown from the US Census Bureau. This shows exactly how much of an import enters under FTA/special programs (RP codes 10-19) vs MFN base rate (RP 00) vs additional tariffs (RP 69). This is ground truth — what CBP actually collected.
How to see FTA program usage in our API
Our /v1/classify response returns a Census-derived rate provision breakdown. Within census_duties.breakdown, look for RP codes 10-19 — these capture imports that entered under a special/preferential program (FTA, GSP, Section 322, etc.). The percentage tells you how much of recent US import volume under that HTS code actually claimed FTA preference.
This isn't the same as a per-country preferential rate lookup — for that, the authoritative source is USITC HTS Special column rates and the FTA partner agreement texts. Our API surfaces the program usage signal so you can quickly see whether FTA is a real lever for products under a given code.