Crack the HTS Code: Your Key to Combat Tariffs

Crack the HTS Code: Your Key to Combat Tariffs

Every product that crosses a border comes with a 10-digit code. It looks like just another line on your import documents, but behind those numbers is a whole world of tariff rates, trade rules, and hidden costs.

That’s the Harmonised Tariff Schedule (HTS), a global system for classifying products in international trade. It tells customs what your product is, and more importantly, how much you’ll pay to bring it in.

Here’s the twist: HTS codes aren’t always as rigid as they seem. In fact, the difference between a 7.5% duty and a 0% duty might come down to how you describe your product and how well you understand the classification system.

This isn’t about gaming the rules. It’s about knowing how to work within them. With the right approach, reclassifying your product can mean lower costs, higher margins, and fewer surprises at the port.

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Unlock Savings

All products are categorised under the Harmonised Tariff Schedule (HTS), but similar products often face different rates due to complex rules. This is where reclassification becomes a powerful tool. When eligible, reclassification can reduce tariffs without significant alteration of the product. Here’s how you can justify reclassification:

• Material/Form Change: Sometimes, altering the form of a product, such as disassembling it, can make it eligible for a different classification.
• Documentation: Your product description matters. A lot. Updating the language to reflect the product’s essential character can open doors to better classifications (and lower tariffs).
• Compliance: Rulings from U.S. Customs & Border Protection (CBP) aren’t just nice to have—they’re legal armor. Get clarity, get confidence, and get your new rate recognized.

Reclass in Real Life

Consider the 2018 example of Converse. By adding felt material, they successfully shifted their classification, achieving a significant tariff reduction. Originally classified as sneakers with a 37.5% tariff rate, Converse reclassified their product as slippers, reducing the tariff to just 3%. 

Take a closer look at your own tariffs. There might be hidden opportunities to boost your margins just waiting for you to uncover.

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Brand Playbook

1) Review HTS Rates: Dive into your current HTS codes to identify opportunities for savings. Understanding the nuances can reveal potential cost reductions.

2) Identify Successful Transformations: Learn from examples like Converse's to minimise risk and ensure compliance. These success stories can serve as a guide for your own efforts.

3) Engage Experts: HTS codes are tricky—don’t do it alone. Talk to a trade expert who knows the system inside out. We’ve helped brands save big—feel free to reach out to us, we would love to chat!

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Small Codes, Big Impact

HTS reclassification is not just a bureaucratic exercise; it's a strategic tool that can significantly impact your company's bottom line. 

By understanding and leveraging HTS codes, businesses can unlock new opportunities for cost savings and compliance. 

So, take a look at your classification. A little reclassification might just be the key to unlocking a world of savings.

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