AI Supply Chain BriefTariff impact analysis example: a worked duty-change calculation, options and an AI prompt
Short answerTariff impact per item = customs value per unit × annual units × (new duty rate − old duty rate). Add the items up, keep items with unconfirmed origin or classification in a separate total, and check every rate with the HTS and a licensed customs broker before you report a number.
Fictional exampleExample Pump Co., Countries X and Y, every value, volume and duty rate below are made up. Real rates depend on the exact HTS code and country of origin; get them from the U.S. Harmonized Tariff Schedule and your licensed customs broker. This is not legal or customs advice. Don't paste real NDA pricing into an AI tool; see the data-safety checklist.
When a tariff changes, leadership asks one question first: what does it cost us? A tariff impact analysis answers it item by item, then shows which items to act on and what the options are. This page walks through a filled-in example, a free template and an AI prompt that does the math with you. For the full cost picture beyond duty, see the total cost of ownership example.
What is the formula for tariff impact?
Annual duty change = customs value per unit × annual units × (new rate − old rate). Do it per item, then add up. Divide by annual units to get the change per unit, which is the number you will need for pricing and supplier talks.
Worked example: four imported items, one rate change
Example Pump Co. imports four items. A fictional notice raises duty on certain goods from Country X by 25 percentage points.
| Item | Origin | Value/unit | Units/yr | Old rate | New rate | Old duty/yr | New duty/yr | Change/yr | Change/unit |
|---|---|---|---|---|---|---|---|---|---|
| A | Country X | $12.00 | 40,000 | 2.5% | 27.5% | $12,000 | $132,000 | $120,000 | $3.00 |
| B | Country X | $3.40 | 150,000 | 0% | 25% | $0 | $127,500 | $127,500 | $0.85 |
| C | Country Y | $48.00 | 5,000 | 3.9% | 3.9% | $9,360 | $9,360 | $0 | $0.00 |
| D | X or Y? (check) | $7.75 | 20,000 | 2.0% | 27.0% if X | $3,100 | $41,850 | $38,750 | $1.94 |
| Total | $24,460 | $310,710 | $286,250 |
Math for item A: $12.00 × 40,000 × (27.5% − 2.5%) = $480,000 × 0.25 = $120,000 a year, or $3.00 a unit.
Result: the confirmed exposure is $247,500 a year (items A and B). Item D adds $38,750 only if its origin is Country X. D is assembled in Country Y from Country X parts, and origin rules decide which rate applies, so it goes to the broker before anyone quotes a total.
What can you do about it?
| Option | When it fits | Watch out for |
|---|---|---|
| Ship before the effective date | High-volume items with stable demand (item B) | Carrying cost and space. Pulling 3 months of B forward means about $127,500 of extra stock; at a fictional 25%/yr carrying rate, holding it up to 3 months costs at most about $7,970, against about $31,875 of duty avoided. |
| Share the increase with the supplier | Items where the supplier has margin or wants the volume | Ask for cost data; see how to respond to a price increase for the reverse conversation. |
| Alternate origin | Items with a qualified second source (item A) | Qualification time, tooling and the full landed cost, not just the duty line. |
| Classification or origin review by a licensed broker | Uncertain items (item D) | Only a licensed broker or your trade compliance team should decide the code and origin for entry. |
Can AI classify goods or decide the duty rate?
AI can help you organize data, draft questions and do the arithmetic. It should not pick the HTS code or the origin for an entry. In an October 20, 2026 fact sheet, U.S. Customs and Border Protection said licensed brokers who use automated tools must keep active supervision and remain solely responsible for compliance, building on its ruling HQ H350722 about an unlicensed online platform. For how teams use AI to suggest codes for review, see HS code classification with AI.
Do it with AI
You are a trade and sourcing analyst estimating the cost of a tariff change. Inputs, all anonymized: the public notice [PRODUCT SCOPE, COUNTRY, OLD RATE, NEW RATE, EFFECTIVE DATE, SOURCE LINK]; our items, one row each: item code, country of origin, origin confirmed (Y/N), customs value per unit, annual units, current duty rate. [PASTE TABLE] Carrying rate: [25%] per year. 1) For each item, calculate old annual duty, new annual duty, annual change (value x units x (new rate - old rate)) and change per unit. Show your math for the first row. 2) Total the confirmed items and, separately, the items whose origin is not confirmed. 3) For the top 3 items by annual change, compare shipping before the effective date (duty avoided vs. carrying cost), sharing the increase with the supplier, and an alternate origin. 4) Write the questions to send our licensed customs broker. Output: a table with columns item, old duty, new duty, annual change, change per unit; then options and broker questions. Keep it under 350 words. Use only the rates I give; don't look up or invent duty rates. This is not legal or customs advice. List any missing or inconsistent data instead of guessing.
What to check: confirm every rate against the notice in the Federal Register and the HTS; confirm origin with your broker; recompute one row by hand; check the carrying rate with Finance. For news on rate changes, follow #tariffs and #trade policy.
Free template
Download the tariff impact template (CSV), pre-filled with the fictional Example Pump Co. items. Old duty, new duty, annual change and change per unit are formulas.
FAQ
How do you calculate the impact of a tariff?
Multiply customs value per unit by annual units and by the change in duty rate, for each item, then add them up. In the example on this page the confirmed impact is $247,500 a year.
Which value is duty charged on?
Usually the customs value declared at entry, which is often not your landed cost. Ask your broker what value applies to your items.
Can ChatGPT or another AI tool give me the HTS code?
It can suggest candidates to review, but the code and origin used for entry should be decided by a licensed customs broker or your trade compliance team. CBP's October 2026 fact sheet says brokers using automated tools stay fully responsible.
Should we ship before a tariff takes effect?
Sometimes. Compare the duty avoided with the carrying cost of holding the extra stock, plus space and obsolescence risk. In the example, pulling item B forward avoids about $31,875 of duty for at most about $7,970 of carrying cost.
Is there a tariff impact template?
Yes. The CSV on this page opens in Excel or Sheets with the duty formulas filled in.