Harmonized System (HS) Code vs. HTS Code

What is the Harmonized System (HS) Code?

The HS Code, or Harmonized System Code, is an internationally recognized classification coding system for goods established and managed by the World Customs Organization (WCO). It is the most widely used system for classifying trade goods globally and is essential for determining tariffs and trade statistics.

Key features of the HS Code include:

• International Applicability: The HS Code is adopted by over 200 countries and regions worldwide, ensuring consistency and accuracy in product classification in international trade.
• Structured Classification: The HS Code employs a hierarchical classification structure, where the first six digits represent the internationally recognized portion, while the following one or more digits are added by individual countries as needed.
• Multipurpose Use: In addition to determining tariffs, the HS Code is used for trade statistics, rules of origin, trade agreements, and the formulation of trade policies. For example, the HS Code 0808.10 is used to classify apples, with the first six digits (0808.10) being the international standard and any additional digits being tailored to specific national requirements.

What is the HTS Code?

The HTS Code, or Harmonized Tariff Schedule Code, is a classification coding system established by the United States International Trade Commission (USITC) specifically for categorizing imported goods and determining tariffs in the United States. The HTS Code is based on the first six digits of the HS Code, with additional digits tailored to meet U.S. requirements.

Key features of the HTS Code include:

• U.S.-Specific: The HTS Code is exclusively used for classifying imported goods and determining tariffs in the United States, aiding the U.S. Customs and Border Protection (CBP) in import management.
• Based on HS Code: The first six digits of the HTS Code align with the HS Code, ensuring compatibility with international classification systems, while the subsequent digits may be adjusted to address specific U.S. needs.
• Tariff Functionality: The HTS Code primarily serves to determine the tariff rates for imported goods, ensuring that tariffs are assessed correctly.

Differences Between HS Code and HTS Code

Although both HS Code and HTS Code are classification coding systems for goods, and the first six digits of the HTS Code are consistent with the HS Code, there are several key differences:

1. Scope of Applicability:
   • HS Code: Internationally applicable, used for product classification, tariff determination, and trade statistics across all countries.
   • HTS Code: U.S.-specific, used for classifying imported goods and determining tariffs in the United States.
2. Primary Uses:
   • HS Code: Determines international tariff rates for goods, assisting countries globally in trade statistics and policy formulation.
   • HTS Code: Aids the U.S. government in import management and tariff collection, ensuring correct classification and application of tariff rates.
3. Coding Structure:
   • HS Code: The first six digits represent the internationally recognized portion, with additional digits provided by individual countries as needed.
   • HTS Code: The first six digits align with the HS Code, while the subsequent digits are adjusted and refined by the U.S. International Trade Commission (USITC) based on U.S. import requirements.
4. Managing Authorities:
   • HS Code: Managed and updated by the World Customs Organization (WCO).
   • HTS Code: Managed by the U.S. International Trade Commission (USITC) specifically for use by U.S. Customs and Border Protection (CBP) in import management.

Examples of Practical Applications

1. Laptops:
   • HS Code: 8471.30, used to classify portable automatic data processing machines (such as laptops).
   • HTS Code: 8471.30.0100, used to describe laptops imported into the United States, with potentially more detailed coding.
2. Mobile Phones:
   • HS Code: 8517.12, used to classify mobile phones.
   • HTS Code: 8517.12.0050, used to describe smartphones imported into the United States, with potentially more detailed coding.
3. Clothing:
   • HS Code: 6203.42, used to classify men’s cotton jackets.
   • HTS Code: 6203.42.4010, used to describe men’s cotton jackets imported into the United States, with potentially more detailed coding.

These examples illustrate that while HS Code and HTS Code share similarities in their coding structure, their applications and scopes differ significantly. The HS Code is an internationally recognized system for product classification used widely in trade statistics and tariff determination across the globe. In contrast, the HTS Code is specifically designed for classifying imported goods and determining tariffs in the United States, assisting the government in import management and tariff collection.