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What is a Tariff Number?

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  • Written By: P.S. Jones
  • Edited By: Andrew Jones
  • Last Modified Date: 22 July 2014
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A tariff number is the six-digit code assigned to an import or to an export from the United States. These codes are based the general category that describes the item being shipped. Assigning a tariff number is an important part of the responsibilities of the Harmonized Tariff Schedule of the United States (HTS). A tariff number may also be known as the Harmonized System number.

Trade is almost as old as human civilization itself, and international trade is a crucial part of nearly every country’s economy. As technology progressively makes our world smaller, international trade has become increasingly more a part of each nation’s economic revenue. Often, a country’s international trade comes with an extensive set of regulations based on the political and economic relations between the two countries making the trade.

The United States International Trade Commission (ITC) is an independent federal agency that advises the executive and legislative branches of the U.S. Federal Government on all aspects of international economic intercourse. Congress created the ITC in 1916, and gave it extensive investigative power on all matters of trade. In 1989, the ITC created the Harmonized Tariff Schedule, basing it on the World Customs Organization’s international Harmonized Commodity Coding and Classification System. In fact, nearly all countries have a tariff schedule based on the Harmonized System. This has made international trade much more efficient.

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The Harmonized Tariff Schedule of the United States is a two-volume government publication that is also available in several electronic formats. It is divided into 99 chapters, each with a number of headings and subheadings. Although there are no hard and fast rules, in general, raw or very basic materials appear in the early chapters, while highly processed or manufactured goods can be found later. The Harmonized Schedule assigns each good a tariff number based on its classification of use as well as the material it is made of. For example, agricultural products can be found in chapters one through twenty-four.

As long as there has been trade, there have been tariffs, which is a tax that is put on a good when it moves from one country to another. The tariff number of an import classifies the goods based on several characteristics, including the use of the item or the materials it is made from. In fact, over 17,000 tariff numbers may be assigned to an import. These codes are then used to classify goods for duty, quota or statistical purposes.

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winslo2004
Post 5

Absolutely, tariffs can be a political tool as well as an economic one. Countries pass tariffs on each others all the time. The U.S. tariff on Canadian softwood lumbar is a good example. It went back and forth for years, both as a way for U.S. politicians to say they were preventing "unfair competition" from imported lumber and as a way to gain leverage against Canada in other trade issues.

And even domestically, tariffs can be a political thing. The whole system of tariff numbers and other administrative burdens is by nature restrictive to business. Different administrations and units of government, both Federal and state, can be more or less in favor of streamlining processes and costs for business.

Sometimes, this is just part of the process, or a "cost of doing business". But sometimes it sure seems like there is a punitive component to it when a law is passed that chokes off business in an otherwise-viable sector that perhaps conflicts with the political or "home district" goals of a prominent politician.

horsebite
Post 4

@ Windchime - It is nice that they provide a place to find the information you need, but it still adds layers of complication and overhead to a small business. If you do a lot of import/export business, you have to stay on top of this all the time. Which means you need someone whose job, or at least part of it, is keeping up with these things.

It's just another thing to complicate life for the small businessman. Not to mention that you need to keep up with them in every country where you do business, and not all of them are so easy to use.

yumdelish
Post 3

Did you know that the word tariff originates from the Arabic for 'fees to be paid'?

Sometimes I think that this fee gathering can become a political tool, rather than a strictly financial or statistical one. There are tariffs relating to environmental concerns for instance. This means countries who don't control pollution will pay more to import or export their goods.

Revenue tariffs act to provide a nice source of extra income for the government of a country where a particular product cannot be grown or produced. A good example would be oil, which would attract a high import tax in countries with no other way to get it.

Windchime
Post 2

@CaithnessCC - I agree that this can be a minefield for small business who rely on importing or exporting goods.

Personally I find that Canadian tariff numbers can be looked up quite easily, as there is a dedicated website for this. It is also quite easy to stay aware of changes, presuming you check the site weekly. Everything is posted there, with the links to more information.

CaithnessCC
Post 1

It's really important to make sure you keep up to date with tarrif numbers. Even if you pay to buy or access your own version there may be important changes made during the year. The responsibility to learn about these is yours.

In the UK tariff numbers which are not correct can lead to your goods being held by customs, or perhaps a fine. To be honest this is a part of running a small business that is a bit complicated, so make sure you stay on the ball.

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