International Freight Forwarder and Customs Broker Based in China

5 Tips for Finding HTS Codes and Calculating Import Duty to Save on Duties and Tariffs

Table of Contents

In this blog post, we’re going to take a deep dive into everything you need to know about importing your goods using the correct HTS codes. By following the steps outlined in this guide, you can save money on your imports and avoid costly mistakes. Additionally, we’ll share a bonus tip on how to keep your factory information hidden from competitors.

Now, on to the topic at hand: HTS codes. We know it’s not the most exciting subject, but it is crucial for successful importing. To make it a bit more interesting, we suggest grabbing a cup of coffee or even a glass of tequila, and let’s dive in.

Here are the five things you need to know about HTS codes:

 

#1 What is an HTS code?

Firstly, let’s discuss what an HTS code is. HTS stands for Harmonized Tariff Schedule, and it should not be confused with the HS code, which stands for Harmonized System Code. The HS code is an international system used by over 200 countries worldwide. However, the HTS code is used exclusively by the United States. As we all know, the US likes to be different in everything they do, so they have their own HTS code. But, if you are exporting to both Europe, the UK, and the United States, it’s important to note that the first four digits of an HS code and an HTS code are usually the same. Therefore, you can always start with the first four digits and use that across both an HTS or an HS code.

 

#2 Why is there an HTS code?

Secondly, let’s delve into the reason for the existence of HTS codes. HTS codes are used to identify the amount of duty that needs to be paid on imported products. The reasoning behind this is political in nature. The government decides the level of duty they want to impose on a particular product, and this can be due to a variety of reasons. For example, if the US has a strong tire industry, they may want to restrict imports from other countries in order to protect their domestic industry. In this case, they would impose a high tariff on imported tires. Additionally, certain countries may be given a high tariff code, as was done with China by the Trump Administration, in an effort to restrict imports from that country. Similarly, if a country feels that certain parts of the world are using underage labor, they may impose a higher tariff code on those types of products in an effort to discourage the importation of products from that workforce. There are many different reasons why HTS codes exist.

 

#3 How to find out your HTS code?

Thirdly, it’s crucial to know your HTS code before importing a product, as it will determine whether or not the product will be profitable for you. So, how do you determine your HTS code? I have five different methods that I use.

  • First, I ask my supplier. Your supplier is exporting the product to many different customers worldwide, and they have to record the HTS code or HS code of that product on their export records and shipping documents. If the supplier has been doing that product for many years and is experienced, they will know the HTS code.
  • Second, I use Google as a resource. Simply typing in the name of your product and adding “HTS code” often gives the correct result.
  • Third, I verify the information with the HTS code website, which I will demonstrate with a live example.
  • Fourth, I double-check the information with my freight forwarder. Your freight forwarder is the company you assign to ship your goods, and they also clear your goods through customs. Most freight forwarding companies have a dedicated expert for customs import duty, so they can confirm if the HTS code you’re using is correct.
  • And finally, I double-check import records myself. There are a few different resources we can use for import records, which I will show in a live screen share. I will then double-check the import code I’m using for that particular product and make sure that my competitors are also using the same code. If they’re not, I want to make sure that my HTS code is a better one to use, so I can import at a lower duty code and beat them on price. As a bonus, I’ll also show you how to hide your shipping information from your competitors so they can’t look you up. 

 

How to find HTS code and your competitors Factory Information 

So, guys, we’re going to jump into those five steps.

First, we’ll start with asking your supplier. I’ve prepared a demo message for you.

 

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It’s important to note that compliance with customs is key. We want to make sure our goods don’t get stuck at customs. You can ask your current supplier, or suppliers you’re getting quotes from on Alibaba. You can ask up to five or ten suppliers, or however many you like, until you find a code you’re comfortable with.

One of the first steps in determining the correct HTS code for a product is to ask the supplier. However, it is also important to do additional research to ensure the code is accurate. One useful resource is the Google search engine. By searching for the product and the term “HTS code,” one can find suggested codes, such as 90041091 for blue light blocking glasses. 

 

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However, it is important to double-check these codes on the official HTS code website, hts.usitc.gov, as the website’s algorithm can sometimes produce inaccurate results. Additionally, the duty percentage for a specific code can be found on the website, and it may be beneficial to classify the product in a way that results in a lower duty percentage. It is also recommended to double-check the code with a freight forwarder, as they may have more up-to-date information on import duty exemptions and increases for specific countries.

 

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Now, when importing goods into the United States, it is important to check the HTS code website. However, if you are importing goods into the United Kingdom, you can also check the website www.gov.uk/trade-tariff. As previously mentioned, the first four digits of the HS code and the HTS code are often the same, so you can start by searching for the first four digits (in this case, 9004) on the website. This will show that the UK also classifies sunglasses as “spectacles, goggles, and other protective equipment.” It is always a good idea to double check the codes on both the US and UK websites if you are supplying goods to multiple markets.

 

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You could also check it with your freight forwarder. So, I’ve prepared a sort of message for you guys as well.

 

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As a reminder, your freight forwarder is responsible for clearing these goods through customs. If they are a good freight forwarder like SINO Shipping, they should have a customs clearance expert or specialist within their company. They should be able to confirm if a code is correct or suggest a better one. It’s also important to note that using a risky or incorrect code can result in goods being seized at customs. Therefore, it’s best to rely on your freight forwarder’s experience and knowledge on this topic.

Now, there’s a really cool tool that I like to use to check import records and see what my competition is bringing in. Jungle Scout has a fantastic tool called the Supplier Database that I highly recommend. You can access it by searching for “blue light blocking glasses” on Amazon, finding a product you want to compete with, and copying the ASIN. 

 

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Then, you can go back to Jungle Scout, use the Supplier Database, paste the ASIN, and hit search.

When you hit search, you’ll be able to see the results for that company, including reviews, suppliers, country of origin, and the dates of their last shipments. This is where you’ll be able to find the HTS code information. For example, you may find that the company is importing the product under a different HTS code that has a lower import duty rate.

 

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It’s important to note that some companies may be using a code that is not compliant and they may be at risk of getting fined by customs. However, if they have found a better code, you can learn from that and use it for your own imports. The Jungle Scout Supplier Database also provides additional information such as the manufacturer’s address and export information.

 

#4 Who is responsible for declaring the correct HTS code?

So, point number four, who is responsible for declaring the correct HTS code for customs clearance? Is it a factory, is it you, or is it a freight forwarder? The answer is, it’s you, the brand. You, as the importer on record, take responsibility for declaring the correct HTS code for your goods.

This is extremely important because if you declare the goods with the wrong HTS import codes, it can lead to a number of problems. Customs may hold up your goods, and if the code you’ve declared is much different from the actual code, customs may find you and charge you for the difference. For example, if you declare a 15% good at a 2% code, you’ll end up paying more than you should have.

Another important thing to consider is that the supplier is only responsible for declaring the goods through customs if you’re doing a DDP shipment. DDP stands for Direct Delivery Duty Paid, and it’s when you arrange payment through GDP, which is when you’re paying for the cost of goods and the cost of freight together. In this case, the supplier is responsible for organizing the shipment from the factory all the way to your warehouse.

However, even if you’re doing a DDP shipment, it’s important to clarify with the factory what HTS code they’re using to export the goods. Sometimes, factories may put a zero percent HTS code in order to make the cost of goods look cheaper. This can be a problem if customs finds out, as they’ll seize your goods and you’ll have to pay for the difference.

 

#5 – How to Keep Your HTS Code Hidden from Competitors + Live Demonstration

Point number five is a bonus for those who are interested in keeping their HTS code and import records hidden from competitors. In this section, I will be showing you a live demonstration of how to find your competitor’s HTS codes and import records. However, the bonus is actually about how to hide your own information from competitors.

Please note that I may have misspoken earlier and apologize for any confusion caused. I apologize if I have had too many tequilas and if you have joined me in drinking tequila while watching this video, feel free to share in the comments below.

Now, let’s move on to the bonus on how to keep your HTS code and import records hidden from competitors. First, open Google and search for “electronic vessel manifest confidentiality.” This will take you to the website of the U.S Customs and Border Protection (CBP).

On this website, you will find a section for “electronic vessel manifest confidentiality.” This means that the shipping records, including the bill of lading, are confidential and not accessible to the public. However, in the U.S, shipping records are publicly accessible, which makes it easy for competitors to find your HTS code and import records.

To request confidentiality for your shipping records, you can submit a paper request or an email request to vessel manifest confidentiality at the CBP website. There are no fees associated with this request, and you can request to remove any information regarding shipping information, factories, or anything else that you want to keep confidential. The CBP will then carry out your request.

 

Conclusion

In conclusion, understanding HTS codes is crucial for successful importation and customs clearance of goods. In this blog post, we covered the basics of HTS codes, including what they are, how they differ from HS codes, and how to find the correct code for your products. We also discussed the importance of proper HTS code declaration and who is responsible for it. As a bonus tip, we shared a live demo on how to hide your HTS code from competitors and protect your confidential information.

If you have any further questions or concerns about HTS codes, please leave them in the comments below and we will do our best to address them. Remember, taking the time to understand and properly implement HTS codes can save you money and prevent costly mistakes. Stay tuned for more informative content on importing and exporting.

 

Frequently Asked Questions

What is an HTS code?

HTS stands for Harmonized Tariff Schedule. It is a system of codes used by customs to classify and identify different types of goods that are imported into a country. The HTS code is used to determine the applicable duty and tax rate for a particular product.

How can I find the HTS code for my product?

You can find the HTS code for your product by searching the Harmonized Tariff Schedule database. This can typically be found on the website of the country's customs agency or on the website of the World Customs Organization. You can also use online resources like Import Genius or Alibaba to find HTS codes.

What information do I need to find the HTS code for my product?

To find the HTS code for your product, you will need to provide information about the product's name, description, and its intended use. You may also need to provide information about the product's country of origin and the country it is being imported into.

Can I find the HTS code for my product by searching on Google?

You can try searching for the HTS code for your product on Google, but it may be difficult to find accurate information. It's recommended to use official sources such as the Harmonized Tariff Schedule database or online resources like Import Genius or Alibaba.

Can an HTS code change?

Yes, HTS codes can change. The Harmonized Tariff Schedule is reviewed and updated regularly to reflect changes in trade agreements and other factors. Be sure to check the most recent version of the Harmonized Tariff Schedule to ensure that you are using the correct code for your product.

Is there any other way to find HTS code?

You can also consult with a customs broker or freight forwarder, they would be able to assist you in finding the correct HTS code for your product. They can also provide other valuable information on how to navigate the import process and comply with customs regulations.

Can I use the same HTS code for multiple products?

No, each product must have its own unique HTS code. The HTS code is based on the specific characteristics and features of a product, so using the same code for multiple products can lead to incorrect duty and tax rates.

What happens if I use the wrong HTS code for my product?

Using the wrong HTS code for your product can result in incorrect duty and tax rates, and may even lead to the product being held at customs or refused entry into the country. It is important to take the time to find the correct HTS code to ensure compliance with customs regulations and avoid any potential penalties or fines.

Can I use the HTS code for a similar product as a reference?

It's not recommended to use the HTS code for a similar product as a reference. Each product has unique characteristics and features, so it's important to find the specific HTS code that applies to your product. Using the wrong code can result in incorrect duty and tax rates.

Is there a way to check the accuracy of the HTS code I found?

You can check the accuracy of the HTS code you found by consulting with a customs broker or freight forwarder, or by contacting the customs agency in the country where you are importing the product. They can confirm the correctness of the HTS code you found and provide additional guidance on the import process.

About SINO

SINO Shipping is a trusted international freight forwarder with over 35 years of experience, offering a full range of logistics and transport services. With a strong presence in China and a commitment to efficiency, reliability, and customer satisfaction, SINO Shipping ensures stress-free and cost-effective logistics solutions for businesses worldwide.

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