Imports Oriental Blog

Danny Coyle

We have come to the final installment of our series on HTS Codes. The first two parts of the series focused on how to find the correct HTS Code for items to be imported into the US. Now we take a look at the information that comes with HTS codes, and how to understand it.

Please remember, I am not an expert in Customs/Duty/Importing issues. The information in this series is intended to share general information our company has found useful in importing clothing to the US. If you are importing goods into the US, be sure to do your own research, and if needed, find a professional to help you.

How to read the HTS Code pages

In part 1 and part 2 of this series we used a sample product – Knitted Polyester Scarves. We found the correct HTS code was 61171020, the description being: “Shawls, scarves, mufflers, mantillas, veils and the like, knitted or crocheted, of man-made fibers.” Once we located the correct number, we were able to bring up a table of detailed information pertaining to this specific subcategory.

Enclosed below is an image of the information you will find this page for subcategory 6117.10.20.

HTS Page

There are a few key parts to this page that are important to understand. I’ve found that the 2 most important pieces of information on this page are the HTS code, and the Duty Rate. (I’ve put a red block around both of these).

The first box is the HTS code – 61171020. Below it is the description of the subcategory (the same description we quoted earlier). Now let’s move our attention to the bottom half of the chart, where you will find the “Tariff Treatment” section. I have marked the applicable duty rate in red. The duty rate is applied either as a cost by weight or as a percentage of the goods’ value. In this case a percentage is listed, so these goods will be taxed by value, not by weight.

The same rate is quoted both for “MFN” and “Ad Valorem” – so what do these terms mean?

“Ad Valorem” is a tax that varies according to the value of what it is levied on. The duty applied to your goods will be the ad valorem percentage multiplied by the value of the goods.

MFN (Most Favored Nation) is a tax rate offered to certain countries which may be lower than the stated ad valorem rate. The term MFN is generally replaced in the US by NTR (Normal Trade Relations).

All members of the WTO agree to offer the MFN rate to each other. A country can also grant MFN status to a non-WTO member nation. In many cases the two tax rates are the same; this has been true for all products our company has exported.

If the rates differ, further information can be found in the chapter page (the search method we surveyed in the first part of this series – this chapter can be found here). Column 1 rates apply to countries with normal trade relations with the US. Column 2 rates apply to goods imported from Cuba or North Korea. Column 1 rates are further broken down into “General” and “Specific” rates. The general rate applies unless an applicable exception is listed in the “specific” column.

One other interesting thing of note from this page – in 2009, there were $117million worth of scarves imported into the USA.  This is wholesale prices.  The retail value of those scarves is pretty big.  That’s a lot of scarves.

The import-export industry is huge; there is a lot of information to keep track of. Take advantage of resources open to you – there are a lot of people out there you can learn from. A little time and effort spent in research and study will go a long way to building a successful business.

Danny Coyle

In Part 1 of this series we introduced the HTS and methods of looking up duty rates. We took a detailed look at searching the HTS by chapter – a great way to start out. Once you have some experience in looking up duty rates, and the terminology used in the HTS code, you may want to try searching for your terms, rather than looking them up. If you use the right terms, it’s a much faster way to find the duty rate that applies.

Finding the HTS Code – Method 2: Searching by Term

To use the online search function, you type in a description of your item. The HTS search function will then bring up possible items for you to choose from.

The searchable HTS code

You may need to try many different combinations of the words that describe your product.  On your first encounter with the HTS code, it will take a very long time to figure out what the HTS calls your product.

We’ll use the same sample item – a Knitted Polyester Scarf. For this item, the following search terms will have NO results:

• Knitted polyester scarf
• Polyester scarf
• knitted scarves
• scarf

When you’re first starting out using the searchable HTS, these invalid searches get disheartening quite quickly. This is why it’s important to familiarize yourself with the HTS terminology before attempting to use the searchable function.

The term ‘polyester’ will lead you to products of polyester yarn, polyester fabric, etc. but not to polyester scarves. The HTS typically lists names in their plural form, so “Scarf” is never going to get us a match. ‘Scarves’ has quite a few entries, but the search term that we want is ‘scarves knitted.’

On the ‘scarves knitted’ search page, we read down until we find a description that fits.  Make sure to read all the descriptions on this page.  I’ve found that sometimes a description sounds like it fits, but as I keep reading, there is a better one further down the page.  Click the button next to the name that seems to fit the best.  If there aren’t any that fit, then go back and search for some other descriptive terms.

Using our example search term, the HTS website returns 9 matches. On closer inspection, only one fits our product: 6117.10.20: “Shawls, scarves, mufflers, mantillas, veils and the like, knitted or crocheted, of man-made fibers.” The type of item, construction, and content are all correct. This is the listing that we want.

We can now see that the reason our search for ‘polyester’ did not come up with anything related to scarves was because the HTS description lumps all ‘man-made fibers’ into one category.

A useful term to remember is “nesoi,” meaning “Not Otherwise Specified or Included”. This is used frequently in HTS descriptions. Over time these terms and others like them will become more familiar; searching the HTS for the appropriate duty for your goods will become easier.

Select the correct HTS code and hit the “detail” button at the top of the listing. You will be redirected to a full page of information. In the next (and final) installment of this series, we will take a closer look at what this information means and what you do with it.

Danny Coyle

We frequently get requests to source products for import into the US.  A question frequently asked by our customers is ‘How much is the duty for my product?’ It took a lot of time and effort on our part to understand US duty rates and apply them accurately. Here are some important lessons we’ve learned.

The Harmonized Tariff Schedule (HTS) contains 10-digits codes for the import and export of products into the US. The HTS Code system is quite complex, so to be 100% certain of the duty on your item we recommend hiring a professional. Remember, there are people who have spent their entire careers studying how to classify goods for the HTS.

However, for most of the items our company deals with (consumer goods), an online search does the trick. I’ve found that by investing some time and effort I can be reasonably certain that my search has given me the duty rate I’m looking for.

This is the first part of a three part series on finding the right HTS Code. The first two installments deal with two ways to search for your HTS Code.  In the final installment we will look at how to decipher what you find on that page.

There are 2 ways to find your HTS Code:

1. an online search of the database
2. looking up the chapter most likely to contain your product.

We mainly deal in clothing, so I’ll use a Knitted Polyester Scarf as an example as we go through the search methodology.

About the structure of the HTS Code number.

The HTS code is a 10 digit number.

ABCD.EF.GH.IJ

AB – chapter number
CD – sections in the chapter
EF – sections of CD
GH – sections of EF

And so on….each of the 2 numbers is a subset of the section above it.

Finding the HTS Code – Method 1: Searching by Chapter

If you are new to the HTS, I would recommend first looking up the item by chapter and section of the HTS code, rather than searching for the product through the online search.  Many of the items in the HTS are not described the way that people in the industry or common consumers describe them.  Begin searching by chapter and you start to become familiar with the terms used in the HTS Code.  Later you can use this knowledge to search for the right terms, which will yield accurate results more quickly.

Start Here

This page lists all 99 chapters of the HTS, divided into 22 sections. Section 11 deals with “Textiles and Textile Articles” so we’ll start there. Looking through the chapters in this section we come to Chapter 61 – ‘articles of apparel and clothing accessories, knitted or crocheted’. Our Knitted Polyester Scarf falls under this category, so now we know the chapter that will include the HTS Code we need. Next we will open the page for Chapter 61 and look for the appropriate subsection.

Chapter 61

Now you are looking at a pdf document that is 76 pages long. Scroll down to page 4, where the chart begins. Now we look at subheadings to find the right subcategory for our product.

The first heading is for 6101 – our product is not men’s coats/jackets, so we can skip all of the HTS Codes that start with 6101 (all of page 4).  Keep reading subheadings until you find one that applies. In this case, we finally make our way to page 73, where we find 6117: “Other made up clothing accessories, knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories”.

In the same way, keep moving through each subheading looking for the part that applies.

6117.10 (“Shawls, scarves, mufflers, mantillas, veils and the like” ) applies since we are looking for scarves
6117.10.10 (Of wool or fine animal hair) does not apply since we are looking for ‘man-made fibers’

Eventually we come to 6117.10.20 – of man-made fibers.

• 61: Articles of apparel and clothing accessories, knitted or crocheted.
• 17: Other made up clothing accessories, knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories.
• 10: Shawls, scarves, mufflers, mantillas, veils and the like.
• 20: Of man-made fibers

Here we find that the duty rate is 11.3%.  Note the difference between the duty of Silk Scarves and Polyester Scarves (1.5% compared to 11.3% – a 9.8% difference).  This is important to note; a slight error in looking up your product can make a big difference in the duty rate. (We will cover more about this information and what it all means in the final part of our series.)

Once you have found the correct code, it can be entered into the HTS website’s search function (omit all periods) to get further details. If the number is typed correctly you should find one search result. Hit the detail button to see a full page of information (part 3 of this series will explain more about this information and what it means).

Over time you will becomes more familiar with the terminology used in the HTS, making the whole process a lot faster.

In part 2 of this series we will look at another way to look up HTS Codes – by searching for the terms directly. This can be a very quick solution if you know what to search for.