Most brands importing into the US don’t think much about their HTS codes. They trust their customs broker to handle it. The goods arrive, duties get paid, and life goes on. Until it doesn’t.
Here’s what most people don’t know: US Customs can audit your entries up to five years after import. And when they do, if they find errors, you’re the one on the hook — not your broker.
We sat down with Graham Anderson from Importal to talk about what brands get wrong with HTS classification and why it matters more than ever in 2026. Here’s what we learned.
The trust problem
For the last decade, things were relatively simple. Tariff rates were flat. Most importers weren’t paying much attention to their customs declarations because nothing seemed to be going wrong. That complacency built trust — maybe too much trust — in customs brokers.
Then 2025 and 2026 happened. Tariffs went on, then off, then on again. In-transit exclusions created confusion. Steel and aluminum content declarations became mandatory for 232 tariffs. Suddenly, brands who hadn’t looked at their customs entries in years realized they had no idea what was actually being declared on their behalf.
“Things are really complicated, even more complicated than years past,” Graham told us. “There is always this trust aspect to your customs broker because things were really not too difficult. So I’m not seeing any issues. Tariff rates were rather flat. So I wasn’t paying attention too much to my tariffs to begin with. Things were kind of becoming comfortably numb.”
That comfort is expensive.
What typically goes wrong
When Importal audits customs entries for clients, they find the same types of errors over and over:
1. Currency mistakes
In one audit, they found a broker who declared a million Taiwanese dollars as a million US dollars. The result? Massive tariff overpayments because the declared value was wildly inflated.
2. Wrong HTS codes
The 10-digit code that determines your tariff rate is supposed to be precise. But many brands let their supplier or broker choose the code without verifying it. Sometimes the code is close but not quite right. Sometimes it’s completely wrong. Either way, you’re paying the wrong tariff — and you’re liable for it.
3. Steel and aluminum content declarations
When 232 tariffs kicked in, customs required importers to declare the steel and aluminum content of their products, including the country where it was smelted. Most brands had no idea. If you couldn’t provide that information, customs assumed it came from Russia and applied a 200% embargo tariff.
“All these brands are like, I don’t know, I don’t know that information,” Graham said. “And if you don’t know that information, you had to declare the steel as made in Russia and pay a 200% embargo tariff on it because you couldn’t figure it out and customs had no other resource.”
4. In-transit tariff exclusions
During the various tariff rollouts in 2025, goods that were already in transit to the US were often excluded from new tariffs. But brokers still charged them. “We saw people still paying it no matter what,” Graham said.
The common thread? Most of these errors could have been caught before they became problems — if someone had been paying attention.
The real cost isn’t just overpayment
When we asked Graham what brands typically save by auditing their entries, he estimated 10-15% in recovered tariffs. That’s meaningful, especially if you’re importing high volumes.
But the bigger risk isn’t overpayment. It’s the penalty if customs comes knocking.
US Customs mandates that importers demonstrate “reasonable care.” That means you can’t just trust your broker blindly. You have to look at your entries and verify they’re correct. If customs audits you and finds errors, you can be hit with a negligence or gross negligence penalty — up to 2X the duties owed.
“There was one that came from a few hundred million a few months ago,” Graham said. “So it can get pretty high.”
And here’s the scary part: you’re responsible even if your broker made the mistake. Just like with taxes, you give them the information, they file the declaration, but the liability stays with you — the importer of record.
Who should own this?
At Fortune 500 companies, there are internal trade compliance teams whose job is to audit customs entries. But for most DTC and mid-market brands, that role doesn’t exist.
Graham’s advice: it should fall on supply chain or logistics operations. Not finance. “If it falls on finance, supply chain is going to hear about it and they’re going to want to own it earlier because they have visibility to when the shipment was cleared,” he said.
The key is catching errors early — right when the shipment clears — rather than discovering them months or years later when the refund window has closed or customs shows up with questions.
Where to start
If you’ve never audited your customs entries, don’t try to boil the ocean. Start with last month’s shipments. Work your way backward from there.
Here’s what to prioritize:
New SKUs: When you launch a new product, get the HTS classification right the first time. You don’t want to be 30 shipments in and realize the code was wrong from the start.
High-value shipments: Audit your biggest duty payments first. If there’s an error, recovering even a small percentage can be worth thousands.
Changes in origin or supplier: If your supply chain shifts — new factory, new country — make sure your broker updated the details correctly.
Graham also recommends getting access to your ACE data (Automated Commercial Environment), which is the single source of truth for all your import data from the last five years. You can spot obvious anomalies there — like shipments showing the wrong country of origin.
The three things to check every time
According to Graham, there are three critical elements that determine whether you overpaid tariffs:
- HTS classification — Is the 10-digit code correct for your product?
- Country of origin — Is it the actual country where the product was manufactured?
- Declared value — Did they use the right currency and the right amount?
“Those three all relate to overpayment of tariffs,” he said. “Those are the three that you really should be paying attention to every time.”
When to switch brokers
If you keep finding errors with your broker, it’s worth considering a change. But don’t go all-or-nothing.
Graham’s recommendation: while you’re working with your current broker to fix their process, run a few trial shipments with a new one — ideally a tech-enabled, AI-powered broker. Compare their accuracy, timing, and communication.
“The biggest issue that we see with new broker transitions is that companies kind of go all or nothing,” he said. “They’re like, my broker made this huge mistake, you’re fired, and I’m going to go find another broker. And that new broker makes the same mistake, and then it just compounds, and they find themselves in this kind of carousel of brokers constantly changing.”
Test first. Then switch if it makes sense.
The insurance policy you didn’t know you needed
At the end of our conversation, Graham made a point that stuck: treat auditing like an insurance policy.
“You might not think you’re going to get audited by the government and that’s totally fine. And you can live your life like that if that’s how you want to live,” he said. “But you should treat audit as an insurance policy. You should always have an insurance policy on everything — your car, your house — and your imports should be no different.”
You can’t control whether customs will audit you. But you can control whether you’re ready when they do.
And if you’re importing into the US in 2026, with tariffs shifting and regulations tightening, that readiness isn’t optional anymore. It’s the cost of doing business.
The bottom line: Most brands assume their customs broker is getting it right. That assumption is expensive. Start auditing your entries now — not when customs shows up five years later asking questions you can’t answer.
