US Cosmetics Landed Cost: Why 0% Duty Is Not Free

Two factories quote your night cream. One comes back at 2.10 dollars a unit FOB, the other at 2.35. Most brands stop there and take the 2.10. That comparison is close to meaningless, because the FOB price is the one part of your landed cost that both factories are willing to put in writing, and it is not the part that has been moving.

What moved in 2026 was not the duty rate. For beauty and skin care preparations the US duty rate is Free, and it has been Free for years. What moved is that the shipment now has to be entered at all. That is a procedural change, not a tariff change, and it lands hardest on exactly the shipments an early-stage brand depends on: samples, trial runs, and small direct-to-consumer parcels.

This guide sets out a landed cost model from the factory side of the transaction. It is written to stay usable when the rates change again, so it deals in line items, classification logic and documents rather than a table of percentages that expires.

The Duty Rate Is Free, Which Is Exactly Why It Misleads

Heading 3304 of the Harmonized Tariff Schedule of the United States covers beauty or make-up preparations and preparations for the care of the skin other than medicaments, including sunscreen or sun tan preparations, and manicure or pedicure preparations. Pull the subheadings and the general rate of duty is the same across all of them:

Read the two rate columns together, because the gap between them is the point. Free is not a property of the product, it is a property of the trade relationship with the country of origin. The general column applies to normal trade relations origins, which is almost everywhere you would realistically manufacture. Column 2 sits at 75 percent for the same goods from a small set of origins that do not have that status. You will probably never be quoted Column 2. But its existence tells you where the risk in this line item actually lives: not in the product classification, in the origin.

That is also why a headline duty figure is a poor input to a sourcing decision. Country-specific measures stack on top of the general rate, they are set by executive action rather than by the tariff schedule, and they change on timelines that have nothing to do with your production calendar. Any landed cost model that treats duty as a fixed percentage of FOB is modelling the one variable it cannot control as though it were a constant.

What Actually Changed: The 800 Dollar Shipment Now Needs an Entry

For decades the de minimis administrative exemption let shipments valued at 800 dollars or less enter the United States without a formal customs entry and without duty. That exemption was suspended for all countries by the executive order Suspending Duty-Free De Minimis Treatment for All Countries, published in the Federal Register on 5 August 2025 as document 2025-14897, and the suspension has since been extended by further presidential action, with documents titled Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries published on 25 February 2026 and 9 April 2026.

It then moved from executive action into the customs regulations themselves. Two US Customs and Border Protection rules were published on 24 June 2026:

Note the word the regulations use: indefinite suspension, not repeal. The distinction is not pedantry, it is a planning input. A suspension can be narrowed or lifted by the same kind of executive action that created it, which means the correct posture is to build a process that works under entry requirements rather than to wait for the old regime to return. Read any source claiming a fixed statutory end date with suspicion, and check it against the Federal Register document before you plan around it.

There is a second change riding alongside the customs one. Low-value cosmetic shipments previously moved through a lighter FDA screening path by virtue of their value. With the exemption suspended, small parcels face the same entry treatment as full commercial consignments. For a cosmetic that means the entry can be reviewed against the same import expectations as a container load: consistent product identity, an ingredient statement that matches the label, and a responsible party who can answer for it.

Why This Hits at the Sampling Stage, Before You Have a Business

Here is the part the buyer-side commentary tends to miss, because it is written from the position of a brand that already has a supply chain. The de minimis change is not primarily a tariff event. It is a fixed-cost event, and fixed costs are brutal on small shipments.

Duty on a 300 dollar sample carton of serum under 3304.99 is Free. The entry is not. Someone has to classify the goods, file the entry, name an importer of record, and be answerable for the declared value and origin. Whether that is a customs broker charging a per-entry fee or your own team learning to do it, the cost per unit on a 24-piece sample carton bears no relation to the cost per unit on a 20,000-piece production run.

The practical consequences for a brand in development:

• Sample rounds now have a clearance cost, so batch them. Three separate one-off sample shipments cost three entries. Getting the brief tight enough that variants ship together in one carton is now worth real money, not just calendar time. This is one more reason to front-load the specification work described in our guide to verifying formulation capability.
• The ship-direct-from-Asia model lost its structural advantage. Fulfilling US orders as individual parcels from a Guangzhou warehouse used to avoid both duty and entry. It now incurs an entry per parcel. For most brands the arithmetic has flipped toward consolidating into one bulk shipment and holding inventory in a US warehouse, which changes your working capital profile more than it changes your duty bill.
• Holding inventory brings back the MOQ question. If you are importing in bulk rather than drop-shipping, minimum order quantity stops being a negotiating annoyance and becomes the main determinant of how much cash is sitting on a shelf. We work through that trade-off in the MOQ and cost guide.
• Someone must be the importer of record. Your factory is not it. A Chinese manufacturer selling FOB or FCA is the exporter, and the importer of record has to be a US party with the legal standing to make entry and the liability that comes with it. If you have not decided who that is, you do not have a landed cost, you have a factory price.

Classification Is a Decision With Consequences, Not a Lookup

Brands tend to treat the tariff code as clerical, something the freight forwarder fills in. It is a decision, and in cosmetics it is frequently a genuinely arguable one, because our products cross heading boundaries by function rather than by texture.

Two things follow, and only one of them is about money.

The first is that the rate can differ across headings, so the classification decision has a direct cost. Do not carry the rate from this or any other article into your model. Pull the current general rate for the specific subheading from the official Harmonized Tariff Schedule at the time you quote, because that is the only version that is authoritative on the day your goods arrive.

The second matters more, and it is the one that catches people out. Tariff classification and FDA regulatory status are two independent systems, and an SPF product sits in a different box in each. For customs, heading 3304 names sunscreen and sun tan preparations in its own text, so that is where the goods are classified. For the FDA, a product making a sun protection claim is an over-the-counter drug, not a cosmetic, with a different labelling regime, constrained active ingredients and a different import posture. Getting the tariff code right does nothing for the second problem, and there is no tariff line you can choose that avoids it. If your line includes an SPF product, treat the customs question and the compliance question as two separate workstreams that happen to travel in the same carton. Our own sun care, such as the SPF50 PA+++ sun essence and the daily SPF30 fluid, is quoted with that split spelled out, because the destination market decides which of the two problems is the expensive one. We set out how that plays out across markets in sunscreen regulations by market.

A Landed Cost Model That Survives the Next Rate Change

The reason most landed cost spreadsheets go stale is that they are built as a rate table. Build it as a line-item model instead, with an owner against each line, and it keeps working when the rates move. Treat every rate as an input you re-check before each shipment rather than a constant you set once, for the reason set out above.

Fill this in for both quotes and the 2.10 against 2.35 question usually answers itself, and often not the way the FOB numbers suggested. A factory quoting 2.35 with tighter cartonisation, a correct subheading recommendation and clean documentation can land lower than one quoting 2.10 that generates a customs hold. Our own view on this is straightforward: we would rather argue about a quote line than about a detained entry, and the way we build cost stacks with brands is documented in how skincare formulation cost is actually built.

The Same Model, Ported to Southeast Asia

Most of our brand clients import into ASEAN markets rather than into the United States, so it is worth saying which rows of the model above are US-specific and which are structural. The structural ones are almost all of them. Product cost, freight, cartonisation, broker and entry cost, warehousing, inventory capital and the requalification reserve behave the same way everywhere. Four rows change:

The sequencing consequence is worth stating plainly, because it is the opposite of the US case. Importing into the United States, customs comes first and the regulatory obligations follow the goods. Importing into most ASEAN markets, registration comes first and customs is downstream of it. Budget the notification timeline before you budget the freight. We cover the mechanics market by market in the ASEAN cosmetics directive guide, BPOM registration and TFDA Thailand.

What to Require From Your Factory, in Writing

Most clearance problems on cosmetics are document problems, and every one of them is cheaper to fix at the quotation stage than at the port. Ask for these before you place the order, and treat reluctance as information about the supplier. If you want them supplied alongside pricing rather than chased afterwards, say so when you request a quote:

• A suggested subheading with the reasoning attached. Not just a six or ten digit number. A supplier who writes down why the product sits in 3304.99 rather than 3305 has thought about it. A supplier who copies the code from the last customer has not, and the liability for a wrong code sits with the importer of record, which is you.
• A commercial invoice description that a customs officer can match to the goods. Product name, form, net content, quantity, unit value, currency and origin. Marketing copy on a commercial invoice is a delay waiting to happen.
• An origin declaration that reflects where the goods were actually made, not where the trading company is registered. If bulk is manufactured in one country and filled in another, say so and get advice, because the origin determination is what drives the volatile tariff line.
• A full ingredient statement matching the label, in INCI order, plus the label artwork the goods will actually carry. A mismatch between the declared composition and the printed label is one of the more reliable ways to get an entry reviewed.
• Safety data sheets and transport classification, particularly for anything with meaningful alcohol content or an aerosol propellant. This determines whether the shipment can move by air at all.
• Carton and pallet dimensions with gross and net weights. You cannot forecast the freight line, and therefore cannot forecast landed cost, from a unit price. Ask early: cartonisation is one of the few landed cost levers still open once the formula is locked, and it can be designed around a pallet footprint if raised before tooling. It is part of what we specify on private label programmes rather than leaving to the packaging vendor.

Before You Move Production to Solve a Tariff Problem

The reflex response to tariff volatility is to move the order somewhere with a better rate. Sometimes that is right. But the cost of moving is systematically underestimated, because it is not a freight and duty calculation, it is a requalification calculation.

Changing manufacturing origin means, in most cases: a new formula trial because raw material grades and equipment differ, a fresh stability programme because the previous data belongs to the previous process, compatibility testing again if packaging suppliers change, new supplier qualification and audit work, and updated documentation for every market where the product is registered. Registration is where this gets expensive, because in several markets the manufacturer is named in the dossier, so changing the factory means touching the filing. Anyone who has been through an ASEAN notification knows that is not a form update.

Set that one-off cost against the recurring saving, and the honest answer is often that the move pays back over a horizon longer than the policy that triggered it. That is the specific trap in reacting to a tariff measure by relocating: you are taking a permanent cost to hedge a temporary rate. It is a real calculation with a real answer, and sometimes the answer is to move. It is just not the calculation most brands run, and we would rather set it out than pretend a Guangzhou factory is neutral on the question. Where a move is driven by capability rather than by tariff arithmetic, that is a different conversation, and the distinction between our OEM and CDMO routes is where it usually lands. For the underlying regional comparison, see China against Korea and Europe against China.

The Order to Do This In

A workable sequence, and the reason each step comes where it does:

1. Settle the classification for every SKU, and settle whether any of them is a drug in the US. Everything downstream, cost and compliance both, hangs off this. SPF first.
2. Name your importer of record and get a broker before you place the order, not when the goods are on the water. Ask the broker about a continuous bond if you expect more than a handful of entries a year.
3. Decide bulk import against parcel fulfilment on total landed cost, including the entry cost per parcel and the capital cost of inventory. Post-suspension this usually favours bulk, but run it for your order size rather than taking the general answer.
4. Build the line-item model and make both candidate factories populate it. The gaps in what a supplier can fill in are as informative as the numbers.
5. Batch your sample rounds. Each round is now an entry.
6. Re-check the volatile lines before each reorder, which means the origin-specific measures and the freight market. The general rate on 3304 has been stable for years. The line stacked on top of it has not.

The reason to build the model this way is that it tells you which questions to re-ask. A landed cost spreadsheet with a hard-coded duty percentage gives you a number and no idea when it went wrong. One built as line items with an owner against each tells you exactly which two rows to refresh before your next purchase order, and leaves the other eleven alone.

Does the Free duty rate mean my skincare imports enter the US duty free?

It means the general rate of duty in the tariff schedule for that subheading is Free. It does not mean the shipment carries no customs cost. Country-specific measures can stack on top of the general rate and are set separately from the schedule, statutory fees such as the Merchandise Processing Fee still apply, and since the de minimis suspension every shipment requires an entry with the broker and filing cost that implies. Free duty and zero customs cost are different statements, and the second one has not been true for any commercial shipment.

I only ship samples and small trial orders. Does the de minimis suspension apply to me?

Yes, and proportionally it affects you more than it affects a container importer. The suspension applies to merchandise valued at 800 dollars or less, which is precisely the sample and trial band. Under the CBP rules effective 24 June 2026 for non-postal modes and 24 July 2026 for mail, those shipments must be entered rather than released under the exemption. Because entry costs are largely per shipment rather than per unit, the effect on a small carton is much larger per piece than on a full production run. The practical mitigation is to consolidate sample rounds instead of shipping single variants as they finish.

Can my Chinese factory be the importer of record so I do not have to deal with customs?

In the ordinary FOB or FCA arrangement, no. The importer of record must be a party with the legal standing to make entry into the United States and it carries liability for the declared value, classification and origin. Some suppliers will offer a delivered arrangement where a third party acts as importer, and that can be legitimate, but understand what you are agreeing to: you are relying on someone else's classification decision and someone else's declaration while your brand name is on the product. If your product is subject to US responsible-party obligations, those do not transfer with the freight terms. Read the incoterm and the regulatory question as two separate things.

How often should I rebuild my landed cost model?

Rebuild is the wrong unit. Two lines are volatile, the origin-specific tariff measures and the freight market, and those should be refreshed before every purchase order. The rest of the model, product cost, classification, fees, bond, warehousing and capital cost, changes only when something in your own operation changes. That is the practical argument for the line-item structure: it separates the two rows you have to keep watching from the ones you can leave alone for a year.