Appeals Court rules against Ford Motor Company, finds tariff engineering deceptive.

black thunderbird car

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Earlier in March, I wrote a post about Ford Motor Company’s tariff engineering of importing “passenger vans” at 2.5% and then converting the “passenger vans” to cargo vans. This tariff engineering allowed Ford to pay the 2.5% for passenger vans instead of 25% for cargo vans.

Yesterday, the Court of Appeals for the Federal Circuit reversed the Court of International Trade’s holding and found that slight modifications to a vehicle so that it would not get the 25% duty on cargo trucks was deceptive and reversed the CIT’s holding that modifications done to a vehicle after importation into the US was irrelevant.

This new ruling will have a big impact on a lot of existing classifications.

The full ruling can be found at the link below:

If you have a ruling, classification or tariff engineering questions, contact experienced trade law attorney David Hsu at 832-896-6288 or by email at or

Passenger van or cargo van? That is the question (well, for Ford at least).

red ford van

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A current case in federal court is attempting to address when or if a passenger van is actually a cargo van.

The case involves Ford Motor Company and their imports of passenger vans that removed a row of seats and sold the vehicles as cargo vans. Cargo vans were levied a duty of 25%, whereas their passenger van counterparts were only taxes 2.5%. Specifically, Ford imported “passenger vans” into the US from Turkey. After they cleared customs, the second row of seats were removed, windows blocked and holes on the floorboard for the seats were covered.

In 2017, the Court of International Trade ruled in Ford’s favor, but the government has appealed and the U.S. Court of Appeals for the Federal Circuit heard oral arguments yesterday (Monday 11, 2019). Many are watching the ruling as this may impact what strategies companies implement when “tariff engineering” imports to avoid higher duty amounts.

Tariff engineering and finding alternate classifications under the Harmonized Tariff Schedule of the US (HTSUS) are common ways importers try to lower their duty amounts.

The Ford argument is the goods should be classified as they are imported and subsequent altering does not matter. However, the government claims Ford’s wording of the vehicle is “for the transport of persons” instead of goods, ie is a cargo van.

Will update as soon as a decision is made.

If you are interested in how your company can “tariff engineer” goods or want to discuss alternative classifications for your goods, contact experienced trade attorney David Hsu at 832-896-6288 or email David’s catchall email: (will be sent to David’s email.