If you are involved in international trade, you may have encountered the term harmonized tariff. But what does it mean and why is it important? In this blog post, we will explain the basics of harmonized tariff and how it affects your business.

Harmonized tariff is a system of standardized codes that classify products according to their type, use, and origin. It is used by customs authorities around the world to identify and assess duties and taxes on imported goods. The harmonized tariff system was developed by the World Customs Organization (WCO) and is based on the International Convention on the Harmonized Commodity Description and Coding System. It covers over 98% of the world’s trade and consists of more than 5,000 product categories.

The harmonized tariff system has several benefits for both traders and governments. For traders, it simplifies the process of declaring goods at customs and reduces the risk of errors or disputes. It also facilitates market research and analysis by providing consistent and comparable data on trade flows and trends. For governments, it helps to ensure fair and transparent trade practices and to collect accurate and consistent revenue from tariffs and taxes. It also supports the implementation of trade policies and agreements, such as preferential tariffs or quotas.

To use the harmonized tariff system, you need to know the harmonized tariff code (HTC) of your product. The HTC is a six-digit number that represents the product category and subcategory. For example, the HTC for fresh apples is 0808.10. The first two digits (08) indicate the chapter (edible fruit and nuts), the next two digits (08) indicate the heading (apples), and the last two digits (10) indicate the subheading (fresh). The HTC is the same for all countries that use the harmonized tariff system.

However, some countries may add additional digits to the HTC to create their own national tariff codes. These digits reflect their specific tariff rates or statistical requirements. For example, the United States adds four more digits to the HTC to create a 10-digit code called the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS for fresh apples is 0808.10.00.10. The first six digits are the same as the HTC, but the next two digits (00) indicate a further subdivision (not specified), and the last two digits (10) indicate a specific duty rate (free).

Therefore, before you export or import a product, you need to find out its HTC and its national tariff code in your country and in your destination country. You can use online tools such as the WCO Harmonized System Database or the World Trade Organization Tariff Download Facility to search for these codes. You also need to check if there are any special rules or regulations that apply to your product, such as licenses, permits, quotas, or sanitary measures.

By understanding and using the harmonized tariff system, you can make your international trade transactions smoother and more efficient. You can also avoid potential penalties or delays at customs and optimize your costs and profits.