This glossary covers the core terminology of U.S. and Canadian customs compliance – HTS, HS, FTZ, drawback, MPF, HMF, USMCA, CUSMA, AD/CVD, Section 122, Section 232, Section 301, IEEPA, CARM, ACE, CAPE, and 100+ other terms. Each entry includes a plain-English definition, the regulatory citation where applicable, and links to detailed guides on related concepts.
Customs and tariff terminology is dense, regulatory, and constantly evolving. This glossary provides plain-English definitions for the terms SMB importers encounter most often. Each entry includes the regulatory citation and links to deeper guides where the topic warrants.
Core classification and entry
HTS (Harmonized Tariff Schedule): The 10-digit code classifying U.S. imports. First 6 digits are international Harmonized System; last 4 are U.S.-specific. See /what-is-hts-code/.
Entry summary: CBP Form 7501. The formal accounting filed within 10 working days of entry. See /cbp-form-7501-explained/.
PSC (Post Summary Correction): Amendment to entry summary before liquidation. See /post-summary-correction-cbp/.
Protest: Challenge to liquidation under 19 USC § 1514. 180-day window. See /protest-filing-customs-cbp/.
Liquidation: CBP’s final determination of duty owed. Typically 314 days from entry.
Duty types and refunds
MFN (Most Favored Nation): The base duty rate for normal trading partners (most countries).
Section 122: Trade Act of 1974 surcharge, 15% ad valorem, expires July 24, 2026. See /section-122-tariff-guide/.
Section 232: National security tariffs (steel, aluminum, copper, pharma). No statutory time limit.
Section 301: Trade practice tariffs (China-origin). Started 2018, ongoing.
Section 321: De minimis threshold for informal entry. Tightened in early 2025.
Drawback: Recovery of up to 99% of duty on exported or destroyed imports. See /how-to-apply-for-duty-drawback/.
IEEPA refund: Refund of unconstitutional IEEPA tariffs through CAPE portal. See /ieepa-refund-guide/.
User fees
MPF (Merchandise Processing Fee): 0.3464% ad valorem; min $32.71, max $634.62 per formal entry in 2026.
HMF (Harbor Maintenance Fee): 0.125% on ocean cargo only. No min/max.
Trade agreements
USMCA (US-Mexico-Canada Agreement): Successor to NAFTA, effective 2020. Called CUSMA in Canada. USMCA-qualifying goods are exempt from Section 122.
CETA: Canada-EU trade agreement.
KORUS: U.S.-Korea trade agreement.
CAFTA-DR: U.S.-Central America-Dominican Republic trade agreement.
CPTPP: Comprehensive and Progressive Trans-Pacific Partnership.
Audit and enforcement
Focused Assessment: CBP’s comprehensive audit program. Typical duration 6-18 months.
TCV (Trade Compliance Verification): CBSA audit program. See /cbsa-trade-compliance-verification/.
AMPS (Administrative Monetary Penalty System): Canadian penalty regime.
Section 1592: U.S. statute imposing penalties for false statements affecting duty.
Reasonable care: 19 USC § 1484 standard requiring importer due diligence.
Platforms and systems
ACE (Automated Commercial Environment): U.S. CBP’s electronic system for entry filing and revenue.
CARM (CBSA Assessment and Revenue Management): Canadian equivalent system. See /carm-canada-consultant/.
CAPE (Centralized Automated Processing for Excess): IEEPA refund portal opened April 2026.
CROSS (Customs Rulings Online Search System): Public CBP rulings database.
AD/CVD
AD (Antidumping): Duties imposed on goods sold below fair value in the U.S. market.
CVD (Countervailing Duty): Duties imposed to offset foreign government subsidies.
Scope ruling: Determination of whether a specific product falls under an AD/CVD order.
Other key terms
FTZ (Foreign Trade Zone): U.S. zone with duty deferral and Section 122 exemption on re-exports. See /foreign-trade-zone-vs-bonded-warehouse/.
First Sale: Valuation method using manufacturer-to-middleman price. See /first-sale-for-export-rule/.
Substantial transformation: Test for country of origin determination.
Tariff engineering: Legal modification of products to fit better-rated HTS subheadings.
Country of origin marking: 19 CFR 134 requirements for marking imports. See /country-of-origin-marking-rules/.
Frequently asked questions
How is this glossary different from CBP’s glossary?
Our entries are written for SMB importers, not customs professionals. Plain English; concrete examples; links to detailed guides where the topic warrants. CBP’s glossary assumes regulatory familiarity.
How often is this updated?
Quarterly. Major regulatory changes (new statutes, new programs) trigger immediate updates.
Can I suggest terms to add?
Yes. Email us with the term you want defined; we add commonly-requested terms in the next quarterly update.
Are these definitions legally definitive?
They are accurate plain-English summaries. For specific regulatory questions, consult the underlying citation or get advice tailored to your facts.
Is the glossary searchable?
Yes – full-text search across all entries.
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