HTSUS Classification
jlamadeleine • October 19, 2015
Is your merchandise classified properly?
One of the key elements in determining if your products qualify under a free trade agreement involves classification under the Harmonized Tariff Schedule of the United States (HTSUS). Knowledge of classification techniques can afford significant savings under NAFTA, other free trade agreements and eventually the Trans-Pacific Free Trade Agreement when it is finalized. Classification of imported merchandise requires knowledge of the product, expertise in analyzing the HTSUS and a review of U.S. Customs and Border Protection rulings that can affect the merchandise in question. Proper classification is required to be compliant not only with free trade agreements but also with the importation of merchandise.
With respect of the classification of imported merchandise, you should be asking yourself the following questions:
- Who classifies my merchandise and do they have the necessary technical knowledge?
- When has my merchandise been classified last? Should it be updated?
- Am I confident that my classifications are correct?
- What penalties, if any, exist for improper classification?
- Am I paying too much or too little duty on my imported merchandise?
It has been estimated that about 94% of imported merchandise is classified properly. Of the amount misclassified, ½ is classified where the importer is paying too much duty and the other ½ is classified where the importer is paying too little duty. In either case the importer is non-compliant. ITM offers a contingency-based analysis of your imports to determine if you are compliant. This allows you to recoup overpaid duties and to make adjustments on underpaid duties.
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.
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