Change & Troubleshoot Overseas Tariffs in Dynamics 365 Finance & Operations

It can be challenging to handle changing tariffs for overseas suppliers in any ERP.

In my experience, the difficulty that Dynamics 365 Finance & Operations users face with the tariff functionality tends to originate from the connections between tariffs and the more complex “voyage” functionality for shipments.

In this article, I’ll walk you through some of the training I give clients to help them use these tools to the fullest, as well as spot and resolve common problems.

Table of Contents

• Tariffs, Voyages, and Auto Costs
• How to Change a Tariff in Dynamics 365 Finance & Operations
• Tariffs for a Specific Items
• Test Voyages
• Troubleshooting

Note: Even though most customers, commentators, and consultants still call it Dynamics 365 Finance & Operations or D365FO, Microsoft now technically licenses it as Dynamics 365 Finance and Supply Chain Management.

To be clear, there are other charges that come when bringing items in from outside the country on voyages, and those include customs, duties, individual item piece costs, fees, and freight. This article will focus on tariffs and their impact on a voyage cost for items.

Understanding Tariffs, Voyages, and Auto Costs in Dynamics 365 Finance & Operations

In Finance & Operations, you track shipments from overseas ports as “voyages.” And you can apply tariffs based on which goods come from which port.

For instance, if you’re shipping from China, you may have a voyage with containers on a ship coming from the port of Shenzhen to the port of Los Angeles. Some goods may have had a 7.5% tariff, for instance, while others have a 25% tariff. And as of early 2025, you may now need to add new tariffs on top of those.

In Finance & Operations, you’ll need to attach those tariffs as Auto Costs to the port of Shenzhen. The system will then automatically calculate the estimated costs for purchasing the item from that supplier.

How to Change a Tariff in Dynamics 365 Finance & Operations

The first step is to set up your Cost Type Codes that separate the various charges that are attached to items or ports.  Below you can see a list of the most common ones used and especially the ones starting with “99” — those are your tariffs.  These “99” codes are generated from the Harmonized Tariff Schedule from the US Government.

Once those are set up you can change or add a tariff for an item or port in Finance & Operations by going into the landed cost module, then Auto Costs.

We will look at ports first. Under Cost Area, select Voyage.  Go to the relevant ports you have created and add the new tariff (Cost Type Code).

Tariffs can be date controlled, meaning you can set when one tariff expires, and new tariffs take place.  You can see this in the 2nd and 5th rows in the screenshot below, looking at the From Date and To Date fields.  In this example, Customs/Tariff 9903.01.20 of 10% started 2/1/25 and ended 3/3/25. Then Customs/Tariff 9903.01.24 of 20% started 3/4/25.

Tip: Keep Tariffs Separated

We generally advise applying increases in tariffs as new fees with their own 99 codes (Cost Type Codes), rather than altering the old tariffs. This is shown in the screen shot and explanation above.

For instance, if a certain good had a 10% tariff, and now has an extra 10% tariff as well, we advise tracking those with two separate cost type codes, rather than as a single 20% tariff. That gives you the flexibility to easily change it if you need to remove the 10% tariff next month.

Adding a Tariff for a Specific Item

There are certain items that can have different or additional tariffs applied to them.  To set these up, you again would go into Auto Costs, and under the Cost Area you would select Item.

You then add the tariff (Cost Type Code), like in the example below.

Important: Run a Test Voyage

Once you’ve made your addition or change, it’s important to then run a test voyage in your sandbox environment and make sure all the costs come out as expected. You don’t want to wait to find out there’s some problem until after your company has committed to a shipment based on the estimates in Finance & Operations.

In the example below of a test voyage, you can see the breakdown of cost by item in the estimated column. Once the actual costs come in after the voyage has reached its destination, those are posted in an AP journal and applied to the voyage.

Troubleshooting Common Problems with Tariffs in Finance & Operations

If you find there’s an incorrect calculation on the cost of a shipment due to tariffs, the most common cause is that the Auto Costs aren’t configured correctly.

The most common issue customers run into is that under the category column, the field may be set to Percent and not Fixed.  You can see below in the screenshot how this should look.

Adapt to Change With Dynamics 365 Finance & Operations

As overseas tariffs and other aspects of your competitive landscape change, it’s important to be able to pivot quickly using the functionality in your Dynamics system.

If you’re looking for a Dynamics Partner who offers expert ongoing support and training as well as implementations and integrations, you can learn more about Encore Business Solutions and our work as a Dynamics 365 Finance & Operations Partner.