Net-of-MFN Tariff
Trade Agreements & Rates · US Import Rules
What is Net-of-MFN Tariff?
A "net-of-MFN" tariff tier is a favorable treatment some countries get under an additional US tariff program, where the new layer is calculated so the combined total - the country's existing MFN duty rate plus the additional layer - doesn't exceed a stated ceiling. That's different from a straightforward additive ("gross") tariff, which simply adds the same extra percentage on top of whatever MFN rate already applies, regardless of how high the combined total ends up.
In practice, this means two countries facing the "same" program can end up paying meaningfully different combined rates: a country in the net-of-MFN tier is effectively topped up only as far as the ceiling, while a country outside it faces the full additive stack on top of its own MFN rate.
Think of a net-of-MFN tier as a price cap, not a surcharge. Instead of the government just adding, say, 10% on top of whatever rate a country already pays (an additive stack), it works backwards from a target combined number and only adds enough to reach that cap - so the country's existing MFN rate is "netted out" of the calculation.
When to Use It
Check whether a country sits in a net-of-MFN tier whenever a US lane page mentions an additional tariff layer "capping" the combined rate at a specific number - it tells you the stated percentage is a ceiling on the total, not simply an amount added on top of the existing MFN duty.
It's easy to assume every country facing the same additional US tariff program pays the same combined rate - they don't. Whether a country sits in a net-of-MFN tier or faces the layer as a straight addition on top of its MFN rate can produce very different total duty, even under the identically-named program.
Frequently Asked Questions About Net-of-MFN Tariff
What does "net-of-MFN" actually mean?
It means an additional tariff layer is calculated to bring the combined total - MFN duty plus the new layer - up to a stated ceiling, rather than adding the same flat percentage on top of the country’s existing MFN rate regardless of what that rate already is.
Is being in a net-of-MFN tier always better for a country?
Generally yes, relative to a straight additive stack - it caps the combined total at a specific figure instead of letting the new layer pile fully on top of the existing MFN rate, which usually produces a lower overall number.
Which countries have been placed in a net-of-MFN tier?
This has applied to several economies under the US’s July 2026 Section 301 program, including the EU, Japan, South Korea, Taiwan, and Switzerland in various lane pages this site documents - check the specific lane page for a given origin, since coverage and status can change.
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