Your mold stays your property while it sits in a supplier’s plant, and customs bills its value onto every unit made with it, because a tool you supply free of charge is an assist rather than your own capital equipment [2]. The regulation walks the sum through: a tool bought for $1,000, plus $100 to ship it to the assembler, becomes a $1,100 assist spread over a $1.50 assembled part [1]. Most landed-cost models book the tool as capital spending and then charge duty on the invoice alone.

The big picture:

The law starts with the price actually paid or payable and adds five items: packing, any selling commission, the value of any assist, royalties, and any proceeds of a resale that flow back to the seller [2]. Tools, dies and molds are the assist whenever a buyer supplies them free or at a reduced cost for use in making the goods [2]. Place tooling with a new supplier and you have created a dutiable asset the old model never carried.

The regulation then sets what the tool is worth: what you paid, or what it cost to build if you built it, cut down for prior use if you have run it before. A leased tool is valued at the lease, and in every case the number includes the shipping that puts it in the plant [1]. The same rule drops a cost people expect to see, since ocean freight and insurance on the goods sit outside the duty base [1].

My read: the gap between those two rules is where the money hides. Freight on your product is a landed cost but not a duty cost, while freight on your tooling is both, because the tool is the thing being valued.

The only free choice is the base you spread the tool over. When the whole expected output is for the United States, the regulation allows three: the first shipment, if you would rather pay the duty at once; the units made by then; or the whole run. Any other method works if it follows generally accepted accounting principles [1]. Its own example is a mold bought against 10,000 units, with 1,000 in the first shipment after the producer had already made 4,000 [1].

Put a number on it. A $400,000 tool over a 50,000 unit run adds $8 of dutiable value to each unit, and spread over the first 10,000 units it adds $40. At an assumed 25 percent rate, which is an illustration rather than a claim about your line, the duty on the tooling is $2 a unit on the longer base and $10 on the shorter one, against an invoice price of $18.

What the base cannot change is which units the tool belongs to. In a 2021 ruling, Customs and Border Protection (CBP) refused a company-wide “tooling factor” that spread tooling spend across all of a company’s imports [3]. That importer entered goods under 233 subheadings from 42 countries and paid more than $10.2 million in duties, fees and trade-remedy bills in 2019 [3]. A method that ignored the rate each line carried was not fair, CBP held, and the assists had to sit with the lines they served [3].

By the numbers

  • $1,100 — Added tool value: The regulation takes a $1,000 tool, adds $100 of shipping, and spreads the total over a $1.50 assembled unit [1].
  • $150 — Freight duty never sees: The same rule leaves $150 of ocean freight and insurance on a $2,000 shipment out of the value [1].
  • 4,000 — A base you may choose: A mold bought against 10,000 units can be spread over the 1,000 in the first shipment, the 4,000 already made, or all 10,000 [1].
  • $10.2 million — Duty behind the refusal: The importer whose company-wide tooling factor CBP struck down had paid that much across 233 subheadings in 2019 [3].

What I’d watch:

What I am watching next is the paperwork that exists before the first entry, because the importer picks the base and CBP tests it later.

  • The tool’s old invoice: Value follows what was paid, what it cost to build, or a lower figure for a tool already run [1]. A firm moving worn tooling into a plant in Mexico is valuing a used asset, and the paperwork from the first purchase is the proof.
  • The written base: The three bases give very different duty per unit, and another method is accepted only if the papers back it [1]. That choice belongs in the entry file rather than a year-end clean-up.
  • The design split: Engineering and design work done outside the United States is an assist, while the same work done by a United States-based employee of the buyer, on the side of work done here, is not [2]. The regulation says in plain words that design work done in the United States may not be added to the price [1]. Where the engineers sit is now a value question.
  • The line-by-line map: The 2021 ruling turned on imports spread across many subheadings at different rates [3]. A tool used for one part number carries one rate, and a factor averaged over a whole company carries none.
  • The ownership question: A buyer holding 5 percent or more of a supplier’s voting stock is related to it [2], and a price between related parties holds only if the tie did not shape it or the value is close to what unrelated buyers pay [2][4]. A plant you own is a related party, and that is a different file.

The catch

The three clean bases apply only while the whole expected output is for the United States. When it is partly for this market, or the tool serves plants in several countries, the method depends on the papers the importer submits [1]. That is the normal case for a supplier that also serves other customers, and it is a talk with an auditor rather than a formula.

Paying duty on the first shipment is not wrong, but it is cash. Spreading the tool over the full run puts the cost off and assumes the run happens, so a program cut short leaves part of the tool’s value unaccounted for and a reconciliation to explain.

The part I keep circling: the number this piece cannot give you is the rate. It belongs to the tariff line the part enters under, and it is the one input a trade action can change. What holds is the shape of the sum — a tool is dutiable, its shipping is dutiable, and the base you pick decides whether that lands as a small charge on each unit or a large one. Where that moves a sourcing comparison, the arithmetic sits beside our earlier read on why Mexico beats China on total landed cost.

At a glance

  • The Big Shift: Customs value is the invoice price plus five listed additions, and tooling given to a supplier is one of them, valued at cost plus shipping and spread over the units it makes [1][2].
  • Why It Matters: A sourcing move creates a dutiable asset that most landed-cost models treat as capital spending, and the base you choose moves the duty per unit by a factor of the run length.
  • What I’d Watch: Whether the base is written down before the first entry, and whether the tool follows the product line rather than the company.
  • The base: First shipment, units made by then, or the whole run — the choice sets the duty per unit [1].
  • The design split: Work done abroad is an assist, while the same work done here is not [1][2].
  • The line map: One tool, one part, one rate, because a company-wide factor was struck down for ignoring that [3].
  • The Catch: The simple bases apply only when the whole expected output is for the United States, and the duty rate itself belongs to your tariff line rather than this article.

Related reading

Sources

[1] U.S. Code of Federal Regulations — 19 CFR 152.103, “Transaction value” (§ (a)(1) Example 4 on indirect payments and freight, (a)(3) Examples 1–2 on the tooling assist, (d)(2) on valuing an assist, (e)(1)–(2) on apportionment), eCFR edition up to date as of 2026-10-22 — https://www.ecfr.gov/current/title-19/section-152.103 [2] U.S. Code — 19 U.S.C. § 1401a, “Value” (§ 1401a(b)(1) additions to price, § 1401a(h)(1) assist definition and the United States engineering carve-out, § 1401a(g)(1)(F) related persons, § 1401a(b)(2)(B) related-party transaction value), text via the Cornell Legal Information Institute — https://www.law.cornell.edu/uscode/text/19/1401a [3] U.S. Customs and Border Protection — HQ Ruling H311213, “Internal Advice; Transaction Value; Allocation of Tooling Assists”, February 10, 2021, Valuation and Special Programs Branch — https://www.customsmobile.com/rulings/docview?doc_id=H311213 [4] Crowell & Moring, “Customs Ruling of the Week — Cost Plus Transfer Price and Transaction Value” (ruling H313988, February 18, 2022): a selling commission paid to a domestic agent after import is not added to the price, and related-party acceptability turns on the circumstances of sale — https://www.cmtradelaw.com/2022/05/customs-ruling-of-the-week-cost-plus-transfer-price-and-transaction-value