Tariff engineering refers to design and manufacturing decisions made primarily so that the manufactured good is classified at a lower rate for tariffs than it would have been absent those decisions.[1] It is a loophole whereby an importer pays a lower tariff by changing the intended import such that the importer has a lesser tariff burden.[2]
In contrast to tariff evasion, tariff engineering configures the design, material, or construction to legally achieve the desired classification rather than illegally misclassifying the product or good.[1] For tariff engineering to be legal, the good being imported must be a "commercial reality", which means any tariff engineering must be a "genuine step in the manufacturing process" or have a commercial use or identity as imported.[3] The rule of commercial reality limits manufacturers in the ways that they attempt to use tariff engineering, by requiring that the features used for tariff engineering purposes must not be removed shortly after importing but must be sold with those features or be used as part of a legitimate manufacturing process.[1][3]