Save on import brokerage fees by downloading the US Harmonized Tariff Schedule and determining your product’s classification before you import.
The Harmonized Tariff Schedule is broken into two major parts: notes and classification.
The notes portion of the HTS comprises approximately one fourth to one fifth of the Tariff Schedule. It contains rules of classification, details on region-specific trade programs (NAFTA and the CBERA), recognized countries and abbreviations, and a list of recent changes to name a few. For purposes of this article we will focus primarily on the rules of classifications.
Reading the HTS: Chapters
The Harmonized Tariff Schedule is broken into 22 different sections which are further divided into chapters. A good rule to remember is that the tariff is categorized with the most highly processed and refined goods last. That means that raw products such as live animals, lumber, and agricultural products will be found near the front of the tariff while electronics, works of art, medical devices, etc. will be found at the back.
Reading the HTS: Notes
Each chapter of the HTS contains notes on classifying products within that chapter. It is very important to thoroughly review these chapter notes before continuing with the classification process. Often times, these notes will list specific articles that can or can not be classified within that chapter. The notes can contain lists of acceptable definitions, clarifications to chapter headings, and other important information
Reading the HTS: Headings and Subheadings
A Harmonized Tariff Classification is a 10 digit number used to identify a specific product. Here’s a sample from Chapter 82 of the HTS (TOOLS, IMPLEMENTS, CUTLERY, SPOONS AND FORKS, OF BASE METAL; PARTS THEREOF OF BASE METAL)
8201.10.00.00 is a handtool of a kind used in agriculture, horticulture or forestry; and more specifically and spade or shovel.
The first two digits (82) of this classification are a reference to the appropriate chapter. The first four digits combined (8201) comprise the article’s heading within that chapter, while the last six digits (10.00.00) break that heading down into subheadings.
In our example, this product is broken down in the following manner:
Chapter 82:TOOLS, IMPLEMENTS, CUTLERY, SPOONS AND FORKS, OF BASE METAL; PARTS THEREOF OF BASE METAL
Heading 8201: Handtools of the following kinds and base metal parts thereof: spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry
Subheading 8201.10.00.00: Spades and shovels, and parts thereof
Reading the HTS: Unit of Quantity
This is the US Customs acceptable measure of quantity for a product. This measurement must be reflected on your commercial invoice.
Reading the HTS: Rates of Duty.
The Rates of Duty Column determines the amount of duty you will have to pay on an imported product. Typically these rates of duty are expressed in a quantity/cost rate (e.g. $0.04/kg) or as a percentage of the value of the good (e.g. 2.5% of the value).
Notice that the Rate of Duty Column is divided into three interior columns. These columns are interpreted as follows:
General (aka Column 1): The typical rate of duty from the majority of the world’s countries.
Special: Special duty rates assigned to specific countries or import scenarios.
Column 2: The special rate of duty assigned to trade restricted countries. Cuba, North Korea, etc.