tariff engineering

Tariff engineering is the targeted design of a product's characteristics to reduce the associated tariffs on import. Unlike tax evasion, tariff engineering is legal. Tariff engineering uses changes in the material, structure, or other characteristics of the original design so that the product can be classified as a different category that is subject to lower tariffs. For example, adding felt onto shoes so that they classify as slippers, which are subject to a lower tariff rate. Other common methods of tariff engineering include: changing the raw materials or structure of the product and breaking up the goods into smaller values to meet exemption thresholds.

[Last reviewed in July of 2025 by the Wex Definitions Team] 

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