How to classify imported goods
Learn the basics of import classification.
What is import classification?
Every product imported into the United States falls under a classification code in the Harmonized Tariff System (HTS). This classification identifies the product and its assigned duty rate.
The first 6 digits of the HTS are the same internationally, but the remaining 4 are unique to each country. You will need to know the U.S.-specific HTS code for any imports into the United States.
The HTS code is an important part of your commercial invoice — a document necessary for Customs clearance.
How do I read the HTS?
A general guide to understanding the Harmonized Tariff System:
Classification Code
On the left column of the Harmonized Tariff System, you will find the code corresponding with your product’s category, getting more and more specific until you reach a 10-digit code that precisely classifies your merchandise.
Even though classifications under the same category might share nearly all characteristics, the full 10-digit code will be necessary to complete U.S. Customs documentation.
Unit of Quantity
After the article description, you will see “Unit of Quantity.”
This column identifies the unit of measurement you will need to use when specifying the quantity of your imported goods on your commercial invoice and/or packing list.
Rates of Duty
There are three sections under the heading “Rates of Duty.”
General Column
The first column is the “General” rate of duty. This is the percentage of duty you will owe on the value of your imported product, as long as there are no special circumstances.
Special Column
The “Special” column applies to products that fall under tariff treatment programs, whether a free trade agreement with another country, or a different special circumstance that changes the rate of duty.
Note that in order to obtain the lower rate, there may be additional documents required.
Column 2
“Column 2” duty rates apply to goods from countries whose Permanent Normal Trade Relations (PNTR) status has been revoked. Currently, the only countries subject to Column 2 duty rates are Cuba, North Korea—and most recently—Russia and Belarus.
Note that this overview does not cover all factors to be aware of in the Harmonized Tariff System. Based on your product, there could be many other additional regulations that apply. For example, China tariffs in recent years have added a level of complexity to duty rates, and you will often see notes about additional tariffs in many of the “general” duty rate columns. Other examples include steel tariffs and quotas. It is important to work with a Customs broker to make sure you understand exactly what importing your product entails and how much it will cost.
How do I know if my classification is correct?
CBP expects importers to exercise reasonable care in all of their import operations, including product classification.
The classification should be based on the accuracy of the description, not the duty rate or any other factor.
Here are a couple resources available to importers who are running into difficulties with merchandise classification:
Binding Ruling
Requesting a binding ruling essentially means asking Customs to say whether they agree with the classification the importer has chosen. If Customs accepts the classification, and provides a ruling for the product, every port of entry is required to honor that classification.
One of the benefits of a binding ruling is the certainty it provides when it comes to classification decisions.
Customs Broker
Enlisting the help of a Customs broker can be worthwhile for your company, as their experience with HTS codes can help you to arrive at the most accurate classification (as well as help you understand the total applicable duty rate).
However, importers know their product best, and are held responsible for providing U.S. Customs with the correct information about their shipments. Any classification determination can be questioned by U.S. Customs, who has the final say on whether a classification is correct and acceptable.
If you would like product classification assistance from a Customs broker, note that the importer is still responsible for providing the broker with accurate and complete information about their product.
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