Tariff Engineering: How Big Brands Quietly Dodge the Tariff Drama

Sal Orozco
Jun 18, 2025
4 min read

"The secret of change is to focus all of your energy not on fighting the old, but on building the new." - Socrates

What Apple, Crocs & Marvel already figured out — and how you can apply it before your next shipment.

The Truth No One Tells You

You’re probably overpaying on import duties.

And not by a little.

The worst part? Your product didn’t need to change

— just the way it was classified.

Welcome to the world of tariff engineering

— the quiet margin multiplier big brands have been using for centuries.

What Is Tariff Engineering?

Tariff engineering is the legal practice of designing a product to fit into a lower-duty classification under the Harmonized Tariff Schedule (HTS).

In plain English?

It's choosing materials, features, packaging, or product structure that slot your product into a more favorable customs category.

Same function. Same customer.

Different duty.

It isn’t gaming the system. It’s working with the system.

And for product-based brands, the savings can be significant. Even transformational.

Tariff Engineering Isn’t New

One of the earliest plays?

Sugar. 1800s.

A clever importer added a trace amount of molasses to pure sugar,

relabeling it as “brown sugar.”

Why?Brown sugar carried a lower duty.

Customs pushed back.But courts ruled in the importer’s favor.

The product was real.

The classification was legal.

The savings were massive.

Tariff engineering isn’t a trend. It’s a legacy strategy

—used for centuries to stay profitable.

Real Brands. Real Wins.

Let’s break down a few real-world tariff engineering plays by household names:

✨ 1. The Apple Watch

Most think it is just a "watch."

Apple disagreed.

They classified it as a data transmission device, not a timepiece.

Why? Because it sends texts, receives calls, and tracks health metrics.

Outcome: Avoided 30%+ tariffs when the 2018 trade war brought down heavy duties on traditional watches.

✨ 2. The Snuggie

Is it a blanket or is it clothing?

Snuggie made a strategic choice:

call it a blanket with sleeves, not a robe or wearable.

Outcome: Paid 8.5% duty instead of 14.9%.

That classification tweak, plus smart marketing, helped create a category-defining product and saved millions in the process.

✨ 3. Marvel Toys

Dolls vs. toys. You’d think it doesn’t matter — but it does.

According to U.S. customs:

Dolls = human-like figures (higher tariffs)
Toys = non-human, fantasy, robotic, etc. (lower tariffs)

Marvel argued that X-Men and Avengers aren’t technically human.

Customs agreed.

Outcome: Saved 11.5% on each figurine.

✨ 4. Converse All-Stars

Classic Converse sneakers faced high import tariffs under footwear categories.

The solution? Add a thin felt sole to qualify the shoes as slippers.

Outcome: Paid a significantly lower slipper duty rate — without changing the core look of the shoe.

SME Brands, This Is for You

You don’t need a legal army.

You just need a product line, a little HTS code knowledge, and a smart customs advisor.

Here’s how medium-sized brands can put tariff engineering into play:

1. Know Your Current HTS Code

Every imported product has one. Check your past customs entries or ask your freight forwarder. Write it down.

Example:

Women’s hoodie under 6102.20.0010 (100% cotton) → 16.5% duty
Swap to synthetic fibers? New classification might be 6102.30.2010 → 11.5% duty

2. Audit the Variables

Duty rates can shift with even minor tweaks:

Material (cotton vs. polyester)
Length / dimensions (especially for gloves, outerwear, footwear)
Features (pockets, straps, closures, hoods)
Packaging (some bundles = sets or accessories)
Use-case (intended user can alter classification)

Even product intent or marketing language matters.

Think like customs, not just your customer.

3. Review Alternative Classifications

Use tools like:

HTSUS.gov
CROSS Rulings (rulings.cbp.gov)

Search for products like yours.

See what others are paying. Learn what alternate codes are being approved.

4. Confirm with a Customs Broker

Tariff engineering is legal — but needs proper documentation.

Once you identify a potential change, share your revised product specs with your customs broker. They can help:

Validate the new HTS code
Provide a classification ruling
File a binding ruling to lock in the classification

Tariff Engineering in Action: A Quick Scenario

You sell a plush toy with a speaker that plays lullabies.

Current HTS: "Stuffed toy" → 7% duty.

You tweak the design slightly, add a button, and market it as an early learning tool.

New HTS: "Educational electronic device" → 0% duty.

You just saved $7,000 on a 100K unit order.

That’s not a loophole. That’s strategy.

Don’t Leave Margin on the Dock

Big brands aren’t winning just on product design.

They’re winning by designing for customs.

Tariff engineering isn’t a secret. It’s not sketchy.

It’s a competitive edge hiding in plain sight.

And now, it’s your move.

Action Plan to Start Today

Pull your current HTS codes for top 3 SKUs
Search alternate classifications with small design changes
Discuss with your customs broker or request a compliance audit
Get documentation or binding rulings for peace of mind
Implement edits before your next PO and track your landed costs

Want Help?

We partner with customs specialists and tariff engineers

who do this full-time for e-commerce and DTC brands.

Let us know what you're importing

— we’ll help you find margin hiding in the fine print.