Us Tariff Codes : The Complete Guide

Sharline Shaw

Importing to the US is complicated, and planning is necessary. There are many factors to consider other than just the cost and delivery time.

It is imperative to consider import taxes that might apply to different goods. 

The US government taxes imported goods by imposing tariffs. Thus, foreign goods are effectively more expensive than domestic products.

There is a tax code for every country that determines import and export taxes.

For example, the US government has its own US tariff codes, such as HTS and Schedule B.

The article goes over all tariff codes in detail so that you won’t experience any problems when you import goods from China.

Us-Tariff-Codes

What is the HTS(Harmonized Tariff Schedule) code?

Over 170 countries use the HTS codes, which are essential global tools.

In the world of customs, the Harmonized Tariff Schedule (HTS) is maintained by the World Customs Organization.

The Harmonized Tariff Schedule (HTS) of the United States was developed in 1989. The HTS Code is a classification system used to classify goods and products imported into the United States. 

Unlike other countries, the United States uses a 10-digit code. The first six digits of each HTS code identify products traded internationally.

These digits are the same in all countries that use the code.

In some countries, 2-4 numbers are added after the six-digit number. This is done for statistical purposes and to determine the duty rate.

HTS codes determine which duty rate should be applied to specific imports.

The United States government uses Schedule B numbers to track exports and Harmonized Tariff Schedule (HTS) codes to track imports.

When submitting import entries, importers must use the correct HTS numbers. A mistake in entering the HTS number leads to an error in duty payment.

The use of incorrect HTS codes may lead to penalties for failure to provide precise information.

HTS codes are dynamic and can be changed at any time. HTS codes created in the US have an expiration date that allows them to be updated annually.

Coding system continuous process to properly classify imported goods, so importers should regularly update their HTS codes.

The HTS of the United States Annotated (HTSA) provides tariff rates for merchandise imported.

Moreover, it provides statistical categories for all imported goods.

Suggested reading: Import from China to USA

What is the HS code?

What-is-the-HS-code

HS is an acronym for Harmonized System. WCO developed it to describe the kind of goods that are shipped internationally.

Customs requires an HS code for every commodity entering or crossing international borders.

Key points

  • The World Customs Organization administers the HS codes. Over 98% of global trade employs HS codes.
  • The HS number consists of six digits. To further categorize the first six digits, countries can add longer codes.
  • The hs code classification system is the basis for the import and export systems used by many trading partners. 
  • Apart from governments, companies and international organizations also use the hs code. 
  • HS codes help ensure that the shipping documents are complete, such as a shipper’s letter of instructions and a certificate of origin.

GRI for Harmonized System Code

Assigning HS codes is done through the Harmonized System classification process.

A commodity in the HS is classified based on GRI (General Rules for Interpreting the Harmonized System) rules.

In general, International Harmonized System applications must be submitted following six general rules.

The rules are as follows:

  • GRI 1 prescribes how products should be classified at the level of four-digit headings. Based on the headings and the chapter notes corresponding to each HS section.
  • GRI 2 mixtures, unassembled and incomplete products and parts are classified. In addition, combinations of products are classified.
  • GRI 3 classifies products based on their prima facie nature. The products are classified under two different Harmonized System headings.
  • GRI 4 specifies how products that cannot be classified under GRIs 1, 2, and 3 should be classified.
  • GRI 5 specifies how packaging should be classified.
  • GRI 6 specifies how products are classified based on their six-digit subheadings. Using the subheadings and the Harmonized System Section and Chapter Notes determines what should appear.

What are Schedule B Codes?

What are Schedule B Codes

Schedule B number is used to complete shipping documents, classify products exported, and calculate export statistics.

The United States government uses Schedule B numbers to track goods being exported.

For each Schedule B code, a physical product type is described. It allows the government to charge the applicable tariff rates.

Unlike HTS Numbers, Schedule B Number contains the first six digits of the HS Number.

No matter how large or small the shipment, it needs a Schedule B code. If you’re going to export goods from the US, you need to know which schedule B numbers to use.

Shippers’ export declarations must contain the correct Schedule B codes.

You can classify your products online using the Schedule B search tool provided by the Census Bureau.

Using the site’s training resources, you will be able to identify your Schedule B number more easily. If you cannot classify your code, you can use official gov websites such as Customs Rulings Online Search System (CROSS) database.

In CROSS, you can find official, legally binding rulings from other exporters and importers who requested Schedule B codes. 

Suggested reading: China import tax

How to Identify Your Product’s Import Duty Using HTS Codes?

How to Identify Your Product's Import Duty Using HTS Codes

Tariffs or taxes imposed on imported goods are referred to as import duties. In general, import duties are imposed to protect a country’s economy.

In addition, it helps control the imports and exports of restricted goods.

HTS codes narrow down particular product descriptions to the very lowest level. That is generally what their purpose is.

CBP can effectively import duty using HTS because of this quality. However, it can also complicate the task of categorizing items for a shipper. 

Imports from countries that have signed international trade agreements with the US will likely have lower customs duty rates.

All products are not eligible for this discount or free trade agreement. If you are interested in more information about this, you may check the USITC’s official website and HTS list.

Most of the time, the rates you see on the list are just estimates. The correct rate is determined by US Customs & Border Protection (CBP).

You can also explore a search engine to find import duty information using some secure websites.

Having information such as the name of the importing country and their contact information is essential.

Here are some tips for identifying HTS codes:

  • Knowing your product is essential. 

Before assigning the HS or HTS codes, you must know everything about the shipment.

You need to know everything about the product. Its size, what it does, how it is made, and other details.

  • Count down from the top. 

When you think of the classification system in segments, it becomes easier. Determine first what category your goods fall under. Usually, this is the simplest step.

After that, proceed with sections by sections.

  • Be familiar with GRIs. 

GRIs provide access to how to classify physical goods.

They cover some basic rules, such as the fact that classifications apply whether the item is finished or unfinished.

Suggested reading: Customs clearance

FAQs 

How-does-the-US-tariff-codes-work

What is the process for determining tariff rates?

We can calculate an average tariff rate by adding the value of imports to the total tariff revenues.

Many countries regularly report these tariff data, which is a standard way to report average tariffs.

How does the US tariff codes work?

All imports into the United States are subject to the United States Harmonized Tariff Schedule (HTS).

In the world of goods trade, the HS code of Nomenclature is widely used by the tariff system.

The US government uses the US customs code to identify duty rates per customs schedule.

How does the International Trade Commission & International Trade Administration work?

In the United States, the International Trade Commission (ITC) is an independent agency that acts as an agency of government and a quasi-judicial body.

The ITC deals with a variety of issues affecting trade. ITC’s primary function is to investigate and decide cases.

It solves a case concerning imports alleged to have injured domestic industries or violated US intellectual property rights.

Conversely, the International Trade Administration promotes American industry’s competitiveness.

By enforcing trade laws, promoting domestic and international trade, and ensuring fair trade occurs at home and abroad.

What is the meaning of preferential tariff?

Preferential Tariffs are those that fall under a preferential trade agreement.

The deal involves countries agreeing to charge a lower rate than the MFN rate. 

Exporters and importers should check whether a product qualifies for a preferential tariff before trading.

Final thoughts

shipping-code

When it comes to shipping products, all shipping codes are important. To find out your shipping code, always use an official government organization.

The shipper must provide the appropriate HS code, HTS code, and Schedule B code. 

Having your shipping documents ready and knowing the tariff rates will save you both time and money.

This makes shipping the products easy.

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sharline

Article by:

Sharline Shaw

Hey I'm Sharline, the founder of Leeline Sourcing. With 10 years of experience in the field of sourcing in China, we help 2000+ clients import from China,Alibaba,1688 to Amazon FBA or shopify. If you have any questions about sourcing , pls feel free to contact us.