The Shopify duty calculator, operated by a third party, Avalara, has constant issues.
Shopify’s argument is often that the tariff calculation is an ‘estimate’, but actually the incorrect calculations that I have experienced over the past couple of months are not ‘estimations’ and more ‘incompetence’.
Here are some issues I’ve uncovered:
When tariff rates were launched for the US at the end of August 2025, they only used courier tariff rates and ignored the postal duty rates (who only use the IEEPA rate). This was resolved about a month later, with the launch of the ‘use postal duty rates in to the United States’ feature.
But it doesn’t work properly, because we discovered the following:
Tariffs for Chinese goods were set at 0% rather than 30%! Which Avalara claimed to be a glitch. Seriously!
Tariffs for Mexico-origin goods were also set at 0%.
Where HS codes have a MFN standard product rate that is higher than the IEEPA rate, then no tariffs are calculated. For example, swimwear made in the EU has standard product rate of 25.9%, which exceeds the 15% IEEPA rate of EU-origin goods. The checkout then ignores everything and calculates zero duties. Nobody seems to have tested the calculator.
The ‘reduce rates when preferential treaties allow’ feature conflicted between the US and the EU. For example, the EU has preferential rates with Colombia (no duty), but the US has an IEEPA rate of 10% with Colombia. If you turned the feature on, then the US didn’t pay any tariffs. So it was a one-size-fits-all calculation. Yet free trade agreements are on a country or region basis, not a one-size-fits-all basis.
I’ve told Shopify about the above and so far it’s taken 1.5 months of going back and forth. The above have not been fully resolved.
These issues cost merchants money - if it doesn’t calculate any tariffs, the customer doesn’t pay them, and they lose money.
Furthermore, Shopify is charging a duty calculation fee - a fee to calculate incorrect duties. I rarely see companies charge a fee for incompetence. Shouldn’t these fees be refunded to all merchants until the calculator works properly?
But above all, isn’t it time for Shopify to find a more appropriate partner? Clearly, Avalara, the apparent tax experts, are either not experts or do not test their own products. Why is nobody properly testing the duty calculator? It seems like very botched development work. And why does nobody take any responsibility and start compensating merchants?
The really silly thing is that we sell American brands to Americans, but those brands manufacture the products in China or elsewhere. Consequently, the tariffs on those goods are higher than for our non-American brands. This means that the tariffs hurt the sales of American-owned brands more than, for example, EU brands. This is rather the opposite to the objective of the tariffs.
However, my concern is the Shopify duty calculator that doesn’t work properly, not US policy on tariffs and what it’s doing to American brands.
Shopify’s Avalara duty calculator has been a constant source of headaches for retailers, including applying incorrect tariff rates and on and off handling of preferential treaties. The calculator rarely reflects actual duties, resulting in a loss of revenue while charging a fee for errors. For merchants, work-arounds include manually checking HS codes and duties, checking duties via official customs websites, or disabling automated duties for the time-being and clearly stating shipping and duty estimates at checkout. You can also use third-party shipping apps with more accurate duty calculations to protect your margins in the meantime until Shopify / Avalara fix the system issues.
