Taxing Imports, One At A Time Every time a car or a T-shirt or an apple comes into the U.S., it's taxed. But determining how much is quite complicated. Import specialists, like Bret Ewing in Seattle, use an old, enormous book to figure it out.
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Taxing Imports, One At A Time

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Taxing Imports, One At A Time

Taxing Imports, One At A Time

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Every time a car or T-shirt or an apple comes into this country, it is taxed. If you want to know how much the tax is, there's an old and enormous book to answer that question.

Chana Joffe-Walt of NPR's Planet Money Team went in search of people who know the book inside and out.

CHANA JOFFE-WALT: They've got a generic title, import specialist. Import specialists are humans with brains containing volumes of data there is no reason to know, unless you're an import specialist. For example, say you want to import some wood flooring.

Mr. BRETT EWING (Import Specialists, Port of Seattle): I handle that line and dealt with a lot of issues with it. And I could say it's either 4409. If it was surface covered, it wouldn't be 4409. If it was a multi-layered engineered flooring, I could say it would be 4412.

JOFFE-WALT: This guy is Brett Ewing. He's a young guy near the Seattle Port with a cubicle, a computer and an enormous book. Enormous: "The U.S. Harmonized Tariff Schedule." I'll introduce you in sec.

You know how on a plane, internationally, you have to fill out that customs card and declare what you're bringing back into the country? If you're a big importer like Target or Wal-Mart, or even if you're just Bob's Burrito Bistro(ph), you have to declare everything you import and you have to pay duties on it. So a toy might be three percent, a car may be five percent.

Someone like Brett, sitting in a major U.S. port, checks that you, the importer, are doing it correctly, choosing the correct category for your stuff. It seems easy, right? Yeah. Well, you haven't met the book.

(Soundbite of a crash)

What did we just hear?

(Soundbite of laughter)

Mr. EWING: We just heard the tariff fall to the ground. This is so exciting. There is a, what, one, two, there's about nine chapters here.

(Soundbite of crashing)

There are three chapters here.

(Soundbite of crashing)

And there are 85 chapters here.

(Soundbite of crashing)

Which is...

Mr. JIM HENDERSON (Import Specialist, Port of Seattle): Whoa.

JOFFE-WALT: Oh, my God.

Mr. EWING: we...

JOFFE-WALT: It's huge.

Mr. EWING: Yeah, this is how we classify merchandise entered into the United States.

Mr. HENDERSON: I'd say it's kind of like our bible. This is what we work from.

JOFFE-WALT: That other guy, that's Brett's colleague, Jim Henderson.

I can't tell you how much pleasure these guys got from watching the tariff fall from my microphone. Not that they don't like their jobs, they do. But I mean, here's what they do every day. They take an item that's come into the country, and they flip through this huge book and rule out every category it is not.

On Brett's desk there is this iPod docking station. You know, one of those things you fit an iPod on to play your music or charge it up or something.

And I say, okay, categorize that. So Brett looks at it. He knows it's not an orange, not livestock, not an optical instrument, not a toy. So he can rule out a lot of the book, like 84 chapters.

Mr. EWING: I would first look at Chapter 85. Beginning of Chapter 85 is for electric motors. That's not right. Keep going. Shavers, hair clippers...

JOFFE-WALT: Hairdressing apparatus, coffeemakers. We have automatic drip and pump-type percolator, other or other.

Mr. EWING: Loudspeakers...

JOFFE-WALT: This goes on and on. Is it a loudspeaker? Or - wait, maybe it's a battery-operated device. It has a battery but it also plugs in. Is it an alarm clock? Well, that's not probably why you buy it, but it does have one.

Brett finally settles on this...

Mr. EWING: I'll read it here.

(Reading) It's reception apparatus for radio broadcasting, whether or not combined in the same housing with sound recording or reproducing apparatus or a clock.


JOFFE-WALT: And it's free.

Mr. EWING: Hey...

Mr. HENDERSON: It's free, baby.

Mr. EWING: Well, not all of them. Some of them aren't free.

JOFFE-WALT: So why? I mean, don't you often wonder why? Like, if it plugs into the wall then they're free...

Mr. EWING: To make that difference?

JOFFE-WALT: But if FM or AM only, then its 4.4 percent?

Mr. EWING: Yes, I do wonder that.

JOFFE-WALT: But he's got an answer because the book says so. There is a better, more nuanced answer because Congress says so. No, well, sort of.

Tariffs are generally in place to protect some American industry that's threatened by a foreign industry. And most economists really don't like this idea. They would like to see this whole book...

(Soundbite of crashing)

JOFFE-WALT: Go away. They argue tariffs just make everything more expensive overall, for everyone. We need free, even competition.

But then labor groups say, well, it's not even. That country doesn't allow unions. Or environmentalists will say that industry pollutes. And then the textile lobby will say, come on. We need tariffs on Indian textiles; they're killing us. The American pencil lobby will say the Chinese aren't playing fair, et cetera, et cetera, et cetera, and so we get this...

(Soundbite of crashing)

JOFFE-WALT: Import specialists, like Brett, they're just trying to do right by the book.

Chana Joffe-Walt, NPR News, Seattle.

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