How to Account for Tariffs in your PO

With new tariffs coming from the United States, it is important to understand how that will affect your products and your purchasing power.

In this article, we will walk you through what tariffs are, the role of HS codes, and how you can include these additional costs in your POs with Genie.

Tariffs are government-imposed duties or taxes on imported goods. These charges are typically calculated as a percentage of the product’s value at the border. Tariffs can vary based on the type of product and the country of origin, and they are used by governments to generate revenue or protect domestic industries. For importers, tariffs are a key part of the total landed cost, so it is always good to account for them when building new orders.

When you place an order with a supplier from outside your country, you may be subject to one or more types of tariffs. These could be percentage-based (ad valorem), a specific fixed amount per unit, or a combination of the two.

The tariff rate depends on how the product is classified under international trade rules and which trade agreements (if any) apply between the origin and destination countries.

Every product you import must be assigned a Harmonized System (HS) code. An HS code is a globally standardized 6-digit number that classifies traded goods. Many countries expand this system to 8 or 10 digits for more detailed categorization.

Using the correct HS code is essential: it determines your tariff rate, ensures customs compliance, and helps prevent delays or fines. You can look up HS codes using official databases (see resource list below) or work with your customs broker to confirm accuracy.

Thankfully, Genie makes it super easy to apply tariffs in your POs. We won’t walk you through the full process of creating a PO (that can be found here), but we will walk you through the specific steps of how to apply these additional costs and how they affect your overall order.

Step 1: Create a new PO within Genie. (If you already have, go to pt 2)

If you have not created a PO yet in Genie, you should find all of the products you would like to make an order with and add them to a new order.

Step 2: Within the new or existing order, “Edit” the “Costs and Discounts” section.

In this section, you can add custom costs/discounts that will apply to all products within the order. This is where you will add the duty amount that is added ontop of your product costs.

Step 3: Add the Tariff/Duty amount to the “Additional costs” category.

In the additional costs section, you will give the cost a name. This can be anything you choose, but maybe “Duty” or “Tariff” would be the best. That way, you can identify why the product costs are higher than normal.

Ensure you indicate the cost type (whether it is a fixed amount or a percentage of each product) and the currency. The currency should match the currency of the PO.

Step 4: Click Apply and then Save the PO.

Once you’ve got the details added you can apply it and save the PO. This will now take that additional cost and add it to the landed cost of the PO.

At the top of the PO table, you will see an overview of how many products you have added to the order, their costs, the landed costs, and any additional costs added on. The value of that tariff will be added to the “Extended Costs” section, indicating how much extra you will be sending to make this order happen. Additionally, this cost will be included in the landed cost of each of your products. So, if the tariff is say, 10% for apparel items, all of your products landed costs for this order will be 10% more than they were previously.

Tariffs are more than just a line item, they directly impact your profit margins, pricing strategy, and cash flow. With new tariffs being put into place, it’s more important than ever to stay proactive and build them into your purchase planning. By understanding how tariffs work, using accurate HS codes, and applying these costs correctly in Genie, you ensure your landed costs reflect the real price of doing business.

Understanding tariffs and how to classify your goods correctly can have a major impact on your bottom line. Here are some trusted sources and tools to explore: