Most Favored Nation (MFN) treatment is the foundational principle of multilateral trade law: WTO members must extend the same duty treatment to all other WTO members. If a country grants a tariff concession to one WTO partner, it must automatically extend it to all others. The principle is codified in GATT Article I.
In the United States, the MFN rate appears in the HTSUS as the Column 1 General rate. Historically Congress used "Most Favored Nation" in the tariff schedule itself, but in 1998 the term was officially renamed Normal Trade Relations (NTR) to clarify that the rate isn't a special favor — it is simply the default rate for normal trading partners. Both terms refer to the same rate.
Most countries pay the MFN/NTR rate when exporting to the U.S. The narrow exceptions:
- Preferential rates — Goods qualifying under a Free Trade Agreement (USMCA, KORUS, etc.) pay the Column 1 Special rate, which may be free or reduced.
- Unilateral preference programs — GSP, African Growth and Opportunity Act (AGOA), and others provide duty-free treatment for eligible developing-country goods. (GSP is currently lapsed pending Congressional reauthorization.)
- Non-NTR rates — A small set of countries pay Column 2 rates (currently Cuba and North Korea; Russia and Belarus had NTR suspended in 2022, effectively placing them in Column 2 status).
The MFN principle does not prevent a country from imposing trade remedies — antidumping duties, countervailing duties, Section 301, and Section 232 tariffs all apply to MFN partners. MFN governs the base rate, not the layered remedies.
For practical landed-cost modeling: the MFN/NTR rate is the starting point. Always check whether an FTA or preference program applies before settling on it, and always layer applicable trade remedies on top.