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Guide to 3 Key Factors for Classification
jlamadeleine • December 27, 2016
How incorrect classification of imports can cost you more than HTSUS requires.
- The first thing you will need to determine is the
last time your imports were classified according to the Harmonized Tariff
Schedule of the United States (HTSUS). Even though the HTSUS does not
frequently change, U.S. Customs and Border Protection does issue rulings almost
every day that can directly affect the classification and duty rates of imported
merchandise.
- Perhaps simultaneously, you need to determine
who did the classification of your imports.
The classification of imported merchandise is very complex. It requires
the cooperative effort of people that have technical knowledge of your
merchandise as well as people that understand the HTSUS. Too often either the
technical people classify the merchandise without expert knowledge of the HTSUS
or your import broker does the classification without extensive knowledge of
the merchandise.
- The classification of imported merchandise is more of an art than a science. It is very seldom that the exact parameters of your merchandise will be defined in the tariff. The determination of the correct tariff is not black or white but usually lies within the gray area. Rulings must be carefully checked, the explanatory notes (international guidelines) must be reviewed, and all technical aspects of the merchandise known.
Our experience has shown that about 90% of the merchandise imported into the United States is classified properly. This is because most of the importers are aware of the 3 key points mentioned above and do what’s necessary to minimize their duty obligations. In the other 10% of the cases, where the merchandise is misclassified, the importer is most likely paying more duty than is necessary. Under the law, it is the importers responsibility to classify their merchandise but most of them leave that task to their customs broker. The broker usually does not spend the time and/or does not have the technical ability to make the proper determination. In order to assess your situation, contact International Tariff Management and we will conduct a contingency based audit to help you possibly minimize your duty obligation.
Effective at 12:01 a.m. on April 5, 2025, a 10% baseline tariff on imported goods from most countries, with a few exceptions, will be implemented. This baseline is in addition to regular duties and fees, current IEPPA duties, Section 201 duties, Section 301 duties, and any applicable AD/CVD.
As of 12:01am, March 4, 2025, tariffs of 25% are effective on products from Canada and Mexico and energy products from Canada are subject to a 10% duty. Products that are presently excluded from these tariffs include goods that are for personal use, goods entered under Chapter 98, donations that are imported under HTSUS 9903.01.21and merely information items included under HTSUS 9903.01.22. All other imported items will carry the 25% tariff and no drawback is permitted on these duties.
The upcoming changes to steel and aluminum tariffs will significantly impact the steel and aluminum industries, with numerous provisions to ensure compliance. Importers, exporters, and manufacturers in the steel and aluminum sectors should stay informed about the latest developments and ensure their operations are aligned with these new tariff regulations.
On February 1, 2025, President Trump signed an Executive Order (EO) that imposes an additional 10% ad valorem tariff on most imports from China, which includes products of Hong Kong. U.S. Customs and Border Protection (CBP) quickly followed up with important guidance regarding these changes, particularly impacting the trade community's handling of de minimis shipments from China. Effective February 4, 2025, de minimis shipments from China will no longer be eligible for the administrative exemption from duty under 19 U.S.C. § 1321(a)(2)(C), and will be subject to the new 10% tariffs. Here's everything you need to know about the changes:
The recent guidance from U.S. Customs and Border Protection (CBP) regarding de minimis shipments from China is a significant update. Here's a quick breakdown of the key points in the alert:
International Tariff Management's February Newsletter
On January 20, 2025, President Donald Trump was sworn in for his second term, and with that came big promises regarding trade policy. But a significant shift came just days later, on January 21, when Trump announced plans to impose 25% tariffs on Mexico and Canada—set to go into effect on February 1, 2025. This move represents a dramatic change in North American trade relations and could have wide-reaching effects on American consumers. At a signing ceremony in the Oval Office, Trump revealed that his administration would roll out tariffs on goods from two of the U.S.'s largest trading partners, Mexico and Canada. However, this new tariff decision doesn’t fully align with the aggressive trade strategy Trump promised during his campaign. The sweeping tariffs Trump pledged on his first day in office, including a 25% tariff on Mexico and Canada, have yet to materialize. His executive action, while still outlining a broad trade policy overhaul, serves more as a placeholder for a more extensive, long-term plan.
Although the United States and Taiwan (officially known as the Republic of China) do not maintain formal diplomatic relations, the two countries share strong cooperation in several areas, including trade. Trade discussions are managed through the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the U.S., under an arrangement called the U.S.-Taiwan Initiative on 21st Century Trade. This framework allows both nations to address trade and investment issues, while working toward mutual priorities over time.
As of January 1, 2025, new tariff rates on certain Chinese imports will go into effect, as part of the ongoing Section 301 investigation into China's trade practices, particularly regarding technology transfer, intellectual property, and innovation. The United States Trade Representative (USTR) has announced additional tariff increases under the Section 301 Four Year Review, which impacts a range of products, including certain tungsten products, solar wafers, and polysilicon. If you're involved in importing these products or handling customs filings, it’s crucial to understand the latest developments and the steps required to comply with the updated regulations.
Our team is excited to be back for another year of maximizing refunds and providing exceptional service for our partners!
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