Understanding HS Codes | Global Tariff Rates

What Is the Harmonized System?

The Harmonized Commodity Description and Coding System — commonly known as the Harmonized System or simply “HS” — is an internationally standardized system of names and numbers to classify traded products. Maintained by the World Customs Organization (WCO), the HS is used by more than 200 countries and economies as the basis for their customs tariffs and for the collection of international trade statistics.

First introduced in 1988, the HS is updated every five years to reflect changes in technology, trade patterns, and environmental or social policy priorities. The most recent edition (HS 2022) introduced new subheadings for items such as drones, smartphones, and e-waste. Every product that crosses an international border is assigned an HS code, making it the universal language of global trade.

How HS Codes Are Structured

An HS code is a hierarchical numeric code. At the international level, it is standardized to six digits. Individual countries then extend the code with additional digits for national tariff and statistical purposes.

Level	Digits	Example (Cotton T-Shirt)	Description
Chapter	61	Articles of apparel, knitted or crocheted	Broadest product grouping (97 chapters)
Heading	6109	T-shirts, singlets, and other vests, knitted	More specific product type
Subheading	6109.10	Of cotton	Material or further specification
National line	6109.10.00.12	Men's or boys' cotton T-shirts (US HTS)	Country-specific detail for duty rates

The first two digits identify the chapter, the first four digits identify the heading, and the full six digits identify the subheading. Countries like the United States (10 digits in the HTS), the European Union (10 digits in the CN/TARIC), and the United Kingdom (10 digits in the UK Trade Tariff) add further digits to determine the exact duty rate, VAT treatment, and any trade policy measures that apply.

Why Accurate Classification Matters

Getting the HS code right is not just an administrative exercise — it has direct financial and legal consequences. An incorrect classification can lead to:

Overpayment of duties: Classifying a product under a higher-duty heading means you pay more than necessary on every shipment, eroding margins.
Underpayment and penalties: If customs discovers you've been under-declaring duties, you face back-duty assessments, interest charges, and potential civil penalties — in the US, up to four times the unpaid duty.
Shipment delays: Customs may hold goods for examination if the declared code doesn't match the product description, causing costly delays at the port.
Loss of trade preferences: Many Free Trade Agreements require the correct HS code to qualify for preferential duty rates. A wrong code means you can't claim the benefit.
Compliance risk: Repeated misclassification can trigger a focused assessment or audit by customs authorities, increasing scrutiny on all your future shipments.

How to Look Up an HS Code

There are several approaches to finding the correct HS code for a product:

1. Official Tariff Databases

Each country publishes its tariff schedule online. The US International Trade Commission publishes the HTS at hts.usitc.gov. The EU's TARIC database and the UK's Trade Tariff service are the authoritative sources for their respective jurisdictions. These databases let you search by keyword or browse the chapter structure.

2. General Rules of Interpretation (GRI)

The WCO's six General Rules of Interpretation provide a systematic method for determining the correct heading when a product could fall under more than one. GRI 1 says to classify according to the terms of the headings and section/chapter notes. GRI 3 provides rules for goods classifiable under two or more headings (most specific description, essential character, or last in numerical order).

3. Binding Rulings

You can request a binding classification ruling from customs authorities. In the US, this is a CBP ruling; in the EU, it's a Binding Tariff Information (BTI) decision. These rulings are legally binding and provide certainty for your classification. Published rulings are also searchable and can serve as precedent.

4. AI-Powered Classification Tools

Modern platforms like Global Tariff Rates use artificial intelligence to analyze product descriptions and suggest the most likely HS codes, cross-referencing official tariff databases in real time. This dramatically speeds up the classification process while maintaining accuracy through expert review workflows.

Key Concepts and Terminology

To work effectively with HS codes, you should be familiar with these core concepts:

Section & Chapter Notes

Legal notes at the beginning of each section and chapter that define scope, exclusions, and special rules. These notes take precedence over heading text and are essential for correct classification.

Essential Character

Under GRI 3(b), composite goods are classified by the material or component that gives them their essential character. For example, a leather wallet with a fabric lining is classified under leather goods.

Parts & Accessories

Many chapters have specific provisions for parts and accessories of the goods covered. A part that is suitable for use solely or principally with a particular machine is typically classified with that machine.

Sets Put Up for Retail Sale

Under GRI 3(b), goods put up in sets for retail sale are classified by the component that gives the set its essential character. A first-aid kit, for example, is classified by its medical contents rather than the carrying case.

HS Codes Across Jurisdictions

While the first six digits of an HS code are harmonized globally, the digits beyond that vary by country. This means the same product may have different full tariff codes — and different duty rates — depending on where it's being imported. For example:

Jurisdiction	Code Format	Example	Duty Rate
United States (HTS)	10 digits	6109.10.00.12	16.5%
European Union (TARIC)	10 digits	6109 10 00 10	12%
United Kingdom	10 digits	6109 10 00 10	12%

This is why importers shipping to multiple countries need to manage multiple classification sets. A product classified once for the US still needs separate classification for the EU, UK, and any other destination market. Platforms like Global Tariff Rates handle this automatically by querying each jurisdiction's official tariff database in parallel.