Most Commonly Asked Questions About the HTSUS

Navigating the Harmonized Tariff Schedule of the United States (HTSUS) can feel like trying to decode a foreign language – but it’s an essential skill for anyone involved in international trade. As the official system for classifying imported goods and determining duty rates, the HTSUS plays a critical role in ensuring compliance, calculating tariffs, and unlocking trade benefits. 

Whether you’re an importer, exporter, or trade professional, understanding how the HTSUS works – and how to avoid costly mistakes – can save you time, money, and headaches. Here are the most commonly asked questions about the HTSUS to help you decode its complexities and stay on top of your trade game.

What is the HTSUS?

The HTSUS is the official system used to classify imported goods into the United States for the purposes of determining tariffs, duty rates, and other import restrictions. It can also be used for classifying exports as well.  It is maintained by the U.S. International Trade Commission (USITC) and is based on the international Harmonized System (HS) established by the World Customs Organization (WCO).

How is the HTSUS structured?

HTSUS codes have 10 digits. The first six align globally with the HS, while the final four digits are U.S.-specific, refining the classification for duty rates and statistical purposes. For example, the HTSUS code 4016.93.5010 classifies rubber O-rings: the first six digits (4016.93) identify “gaskets, washers, and other seals,” while the last four digits provide additional detail, including the duty rate of 2.5%.

What are duty rates, and how are they determined?

Duty rates are the tariffs applied to imports, determined by the HTSUS classification code. Rates vary depending on:

• Product type.
• Country of origin (due to Free Trade Agreements or Most-Favored-Nation status).
• Specific trade programs or exemptions.

HTSUS codes also determine a good’s eligibility for trade preferences under programs like the Generalized System of Preferences (GSP) and agreements such as USMCA and KORUS. For example, a cotton T-shirt classified under 6109.10.0010 may qualify for preferential duty rates under the USMCA if manufactured in Canada or Mexico.

What is the difference between general, special, and column 2 duty rates?

• General: Standard duty rates for imports from countries with normal trade relations with the U.S.
• Special: Reduced or zero duty rates under free trade agreements (e.g., NAFTA/USMCA) or trade programs (e.g., GSP).
• Column 2: Higher duty rates applied to imports from countries without normal trade relations with the U.S. (North Korea, Cuba, Russia, Belarus).

What is the role of the Harmonized System (HS) in the HTSUS?

The first six digits of an HTSUS code come directly from the HS, ensuring global consistency. The HS is the global language countries use to speak to each other about trade.  For example, when Japan and the US discuss trade over rubber O-rings, they really discuss imports and exports of 4016.93.

What are the General Rules of Interpretation (GRIs)?

The GRIs are essential, and provide a step-by-step methodology for proper classification. These globally applicable rules, established by the WCO, must be followed in order. For example, GRI 1 takes precedence, and one cannot skip directly to GRI 3 without first ruling out GRIs 1 and 2. These rules ensure logical and accurate classification, and help ensure consistency in global classification.

What is the difference between HTSUS and Schedule B?

The HTSUS is used for imports into the U.S. to determine duty rates and compliance. It is also used to classify exports from the US.

The Schedule B is only used to classify exports from the U.S. Schedule B codes are often similar to HTSUS codes but may differ for certain products.

The HTSUS and the Schedule B are both based on the HS, so they agree for the first six digits.  

What are the general, section, and chapter notes of HTSUS?

The HTSUS includes notes at the beginning of the document (General Notes) as well as notes at the beginning of each section and chapter, providing critical guidance on definitions, inclusions, and exclusions. These notes, derived from the HS, apply consistently across all contracting parties. For instance, the definition of “rubber” in Chapter 40 applies globally and ensures consistency in classification.

What is the penalty for misclassifying goods under the HTSUS?

Misclassification can result in significant penalties, ranging from fines to revocation of import privileges. Penalties depend on the level of culpability: negligence, gross negligence, or fraud. For example, negligence may result in a penalty of up to 20% of the merchandise’s entered value, while fraud can lead to penalties equal to the domestic value of the goods. Additional duties, such as antidumping or countervailing duties, can compound these costs.

Classification by Use vs by Material

Goods are classified either by their function or by their material composition, depending on which criterion is more specific. For example, an electric motor is classified under Heading 8501 (electric motors) based on its function, even though it’s largely made of steel. GRI 1 ensures that a functional classification takes precedence when available.

How do I get help with HTSUS classification?

• Customs Consultants: Offer expertise in product classification and compliance.
• CBP Rulings: Consult the Customs Rulings Online Search System (CROSS) for prior CBP decisions on similar products.
• Attorneys: For complex cases legal advisors can assist.

However, at the end of the day the importer/exporter is responsible for correct classification, and is not allowed to blindly rely on a classification provided by an external expert (other than one provided by CBP).  Importers are required to practice reasonable care when deciding on which classifications to use.

Are certain goods excluded from the HTSUS?

The HTSUS is used to classify all tangible imports into the US–there is no HTSUS classification for energy nor for information.  Additionally, some goods may be restricted, prohibited, or subject to additional regulations by partner government agencies (e.g., FDA, EPA, USDA).

For example: a wireless optical mouse used for a computer would need clearance from CBP, from the FDA (for its optical functionality) and from the FCC (for its Bluetooth(c)  functionality).

Simplify Trade Compliance with Expert HTSUS Guidance

Understanding the Harmonized Tariff Schedule of the United States (HTSUS) is essential for navigating the complexities of international trade. From accurately classifying goods to determining duty rates and ensuring compliance, mastering the HTSUS can protect your business from costly penalties and enhance your competitive edge in the global market.

At O’Meara & Associates, we specialize in providing expert training and consulting on the HTSUS. Whether you’re looking to sharpen your classification skills or ensure compliance, our experienced team is here to guide you every step of the way.Don’t let the complexities of the HTSUS hold you back. Contact O’Meara & Associates today to learn how our customized training and consulting services can empower your business to trade confidently and effectively. Together, we’ll simplify the complex and keep your operations running smoothly.