By M. Iannuzzi on October 2, 2019 / Edited by V. Killian on January 23, 2023
How do you read the Harmonized Tariff Schedule? How will it affect the price of your parts? It’s a lot to keep up with. After all, as of this post, they are on Revision 12 in 2019. We’ve dealt with these questions for hundreds of parts over the years. Here’s our best advice to help you understand and confidently import in the age of new tariffs on China.
1. How Does It All Work?
The US government has a long, detailed list of numbers that correspond to different types of goods. This list is called the Harmonized Tariff Schedule. It is available online and broken into 99 chapters and 22 sections. Each section is grouped based on the general type of good (for example, vegetable products or textiles). You will need to choose the HTS number that most directly correlates with the product you are importing. When your product goes through a US port of entry, this number will be used to bill you for the appropriate duty.
2. How Do I Read The HTS?
Below is an infographic that explains the key parts of the HTS document.
3. How Do I Choose The (Most) Correct HTS Number?
If you are new to international imports, this process is daunting. You will need to comb through large amounts of content, but the process will get easier as you become familiar with the organization of the document. The best practice is to follow the structure of the HTS itself: start big and move down to the most specific number possible.
There may be cases where multiple HTS numbers work to describe your part. In this case, choose the most correct answer. As a general rule of thumb, you should always look for the category which best describes the final purpose of the part. If the part you are importing is a component of a larger assembly, it will fall into a “parts thereof” section of that assembly.
Example: Steel Handle For a Car Jack
First, we narrow it down by section.
We know that our handle is made of steel. That would qualify it as an “article of steel”. Chapter 73 is potentially correct. Scanning through our options in Chapter 73, we notice a category for “tubes, pipes, and hollow profiles”. Our steel handle is made from a cold-drawn, welded tube – hollow in the middle with caps on the end.
We can see this fits the description of heading 7306. Scrolling through subheadings, our wall thickness is 2 mm. It is not used as a part of an illuminating article or in a boiler, condenser, etc. Should we classify our handle as 7306.50.5030?
Notice that Chapter 84 describes “machinery…; parts thereof”. We know that our handle is part of a larger mechanism, the car jack. We should then also check Chapter 84 to see if our car jack “machinery” is described.
Take a look at 8425.42.0000
Our jack is a stand-alone jack for general consumers, and it’s hydraulic. This describes the exact purpose of our final product, but remember, we are only importing the handle.
Now take a look at 8424.90. Notice how it specifies “Parts:” of various machines? We need to find the same “parts” heading for 8425.42.0000. Usually, the HTS lists complete products first, then follows later in the document with categories for single parts of those products.
Let’s keep scrolling down to 8431.
Our crank handle is a part suitable for use solely or principally with our car jack (number 8425.42.0000). The final HTS number for this would then be 8431.10.0090.
We can see that 8431.10.0090 is clearly the best choice. While 7306.50.5030 technically fits our description, it is not the best answer.
Don’t overthink it! Remember that people wrote this document. If you are stuck between various correct options, think of the context in which the number lies. The government uses this data to charge you a duty, but also to keep track of what types of goods are coming into our country. Choose what makes the most practical sense.
4. How do I know if my part is affected?
If it’s from China, it probably is. Check the most up-to-date list of affected HTS numbers. A sample screenshot is provided below:
Sample screenshot of a list of affected HTS numbers
It can be found on the main page of the official HTS. Scroll and check for your number. This list stops after eight numbers and doesn’t include the final two subheading digits. That means it encompasses all parts in that larger subheading. Any HTS number included on this list is (currently) subject to a 25% tariff.
5. How much will it cost?
Tariffs are billed as a percentage of the value of your imports, AKA the price you bought them from your supplier for. Keep in mind that these tariffs can and have changed radically in short amounts of time. Tariffs are applied when your product crosses the border into the United States, not when you make a purchase from your supplier. If a new tariff goes into place while your parts are at sea, you will have to pay more than you anticipated at the time of purchase.
Looking to source mechanical components abroad but worried about the tariffs? Michigan Manufacturing International has decades of experience sourcing custom mechanical components from our global partners. Through our own production lines in India and our partnerships worldwide, we have facilitated a seamless transition out of China for many of our current customers. Check out our website or contact us to discuss your manufacturing needs.
This post is for informational purposes only. The content is accurate and true to the best of our knowledge at the time of posting. Please refer to the official HTS at https://hts.usitc.gov for direct instruction and consult a legal professional for advice as necessary.