The Cost of Distance

By Dot Kessler. From MFGCalcs Magazine, Issue 1, November 2026, page 35.

Take a $500,000 packaging line crated in Germany in 2024 for an American buyer. At the U.S. International Trade Commission’s averages, freight, insurance and the other charges of the trip came to about $14,600. The duty came to about $600.

Sent a year later, the same crate cost less to ship, about $12,900. Its duty came to about $35,300. The smaller bill had become the bigger one.

The commission’s averages are for German goods under the tariff heading that covers filling, sealing and wrapping machines, a class of imports Germany led, so the crate is only an average. The flip is in the commission’s records for nearly every big supplier of the 57 product families the MFG Calcs tariff monitor tracks. Among the 18 suppliers that sold America the most of those goods last year, goods from every one but China cost more to ship than they paid in duty in 2024. In 2025 the duty was bigger for all 18.

Added up across the families, the commission’s estimated duties came to $69.1 billion in 2025, nearly five times the $14.6 billion it cost to get the goods here.

What changed in the cost of distance was not the distance. Shipping took about 2.6% of the goods’ value in both years, while duty’s share nearly quadrupled. Nearly all of the added cost of buying abroad came as duty, a cost set by policy, not geography. A sourcing model, a quote comparison or a reshoring calculation that carries duty as a fixed line has frozen the bigger of the two costs, and the one that did nearly all the moving.

The trip from Japan cost about the same in both years. Its goods paid about half as much in duty as the trip cost in 2024, and nearly four times as much in 2025.

Mexico and Canada got their goods into the United States for less than 1% of their value in both years, while their duty went from near zero to about 5%. Like every rate here, that is an average over everything they shipped in these families, duty-free goods included. Even next door, the duty passed the trip.

In March, a plastics and rubber products manufacturer answering the Dallas Fed’s Texas Manufacturing Outlook Survey wrote: “Importing from China is precarious. The costs of product and freight are higher and slower. Suppliers are apprehensive.”

That account is from this year, and the commission’s figures for this year carry no supplier detail. Across the families, though, the duty rate has eased since January, to about 12% of value in August. For the trip to catch it, its share of the goods’ value would have to more than quadruple from 2025’s.

Live data from this story

• Duty Passed Freight Everywhere: Landed cost: duty and freight by country

Read it in the magazine

• MFGCalcs Magazine, Issue 1, November 2026, page 35