HS Code Classification: A Complete Guide for U.S. Exporters & Importers

If your team is involved in international trade, there's a good chance you've encountered HS codes. Whether you're filling out customs paperwork, estimating landed costs, or working with a broker, at some point, you're expected to provide the right HS code classification for your shipment.

The problem is that most supply chain and procurement professionals aren't trained in HS code classification. The rules are complicated, the documentation isn't always clear, and there is real pressure to get it right; when it's wrong, the consequences can affect your business's costs, timelines, and compliance exposure.

This guide will teach you how to classify products for export, with a walk-through on how the system is structured globally, how the U.S. adds additional layers like HTS and Schedule B, and how your team can use that knowledge to classify products accurately, even without a background in customs.

Key Takeaways

• Understand the basics of HS code classification and how it impacts duties, customs clearance, and compliance for U.S. importers and exporters.
• Learn the difference between HS, HTS, and Schedule B codes, and when to use each one.
• Find a clear, step-by-step process for classifying products, including how to handle composite goods, kits, and borderline cases.
• Learn to use official tools and databases like HTS Search, Schedule B, and CROSS to research and validate your classifications.
• Avoid common mistakes that lead to delays, penalties, and inaccurate landed costs.
• Connect classification to real supply chain workflows, from sourcing and master data to logistics and customs documentation.
• Discover training options for procurement and supply chain teams that support long-term accuracy and consistency in classification.

What Are HS Codes and Why Do They Matter

HS codes stand for Harmonized System Codes. It's a global product classification method used by nearly every country that participates in international trade. The system assigns a six-digit code to each type of good, based on its material, function, and level of processing. Those six digits serve as a basis for determining the tariffs, regulatory requirements, and statistical tracking that are placed upon that shipment.

You might also hear them referred to as "commodity codes", "trade tariff codes", or "customs classifications". These terms are often used interchangeably, especially when you're reading documentation written by various businesses.

Understanding how HS codes are structured

The six-digit code is made up of three parts:

• The first two digits identify the product category (called a Chapter).
• The next two digits further define the type of product (called a Heading).
• The final two digits in the base code narrow the classification to a specific subcategory (called a Subheading).

For example, 6403.59 refers to a particular type of leather footwear. The first two digits place it in the footwear category, while the remaining digits provide more detail about the material and the construction of the shoe.

Many countries, including the United States, add extra digits beyond the six to create more precise classifications. We'll cover those U.S.-specific extensions in the next section.

Why it matters to your supply chain and procurement teams

An incorrect customs classification creates risk within your business because it can result in unexpected duties, shipment delays, and additional scrutiny from customs. If a code is inaccurate or inconsistent, it may trigger a manual inspection or slow down clearance processes, especially if the documentation doesn't match across systems.

A misclassified product can also be assigned the wrong duty rate, which can throw off your landed cost calculations, budgeting, and pricing. If your company is shipping at scale, even small errors add up quickly.

From a compliance standpoint, incorrect codes may raise red flags in an audit. And if regulators believe you've underpaid duties, even when it's completely unintentional, you can face penalties or repayment demands.

This is why HS code classification isn't something you should delegate without oversight. It connects directly to your cost control, customs performance, and risk management across procurement and supply chain functions.

Understanding HTS, Schedule B, and U.S. Extensions

In a U.S.-based procurement team, you'll likely run into more than just the standard six-digit HS code. U.S. customs and export reporting requires additional layers: the Harmonized Tariff Schedule (HTS) for imports, and Schedule B codes for exports.

Knowing when and how to use each one is essential to avoiding delays or discrepancies.

What's the difference between HS, HTS, and Schedule B?

All three of these refer to different customs classification systems. They're all closely related, but each one serves a different function:

• HS code: This is the six-digit global base that this article is about. It is recognized internationally and used as the foundation for tariff systems around the world.
• HTS (Harmonized Tariff Schedule): This is the U.S. customs classification system for importations. It expands the HS code to 10 digits and is used by U.S. Customs and Border Protection (CBP) to determine import duties.
• Schedule B: This is the U.S. customs classification system for exportations. It's also 10 digits long, maintained by the U.S. Census Bureau, and also relates numerically to the item's HS code. It's used for filing Electronic Export Information (EEI) and tracking trade data.

The first six digits of both HTS and Schedule B correspond to the global HS code, since both systems build on the same international structure. The final four digits, however, are national extensions that may differ between import (HTS) and export (Schedule B) systems.

How the U.S. builds on the global HS system

While the World Customs Organization defines the core HS codes, individual countries are allowed to add digits to meet their unique national needs. The United States adds four digits to create 10-digit classifications.

This extra detail helps U.S. agencies to apply specific duties, gather trade statistics, and enforce regulations. For example, two types of machines might share the same six-digit HS code globally, but the U.S. may break them into separate 10-digit codes depending on usage or features.

When sourcing, this is where your product specs come into play. A slight difference in function or material could shift the product's classification, and therefore your duty rate.

When to use HTS vs. Schedule B

It depends on the direction your goods are moving:

• Use HTS codes when you are bringing goods into the United States. These are required for customs clearance and duty calculation.
• Use Schedule B codes when you are shipping products out of the U.S. They're required for export documentation, especially when filing Electronic Export Information (EEI) through the Automated Export System (AES).

If you're unsure which code system applies, start by asking: Are we importing or exporting? Then, check the official databases to find the correct 10-digit extension based on the HS code of your product.

How to Classify Products Using HS Codes

When you don't know exactly how to classify products for import or export, it can feel like a guessing game, especially for teams that aren't used to working with customs data. Here's a process you can use to improve accuracy and reduce risk:

Start with the product, not the code

The first step is to look at the product from a customs perspective. What is it? What's it made of? What does it do? Customs isn't interested in your internal SKU names or marketing descriptions; they want a clear technical breakdown.

Focus on:

• What the product is (its core function)
• What it's made of
• Whether it's finished or a component
• How it's used (commercial, household, industrial)
• Any unique characteristics (size, power, design features)

This level of detail will help you to narrow your search and support your rationale if you ever need to justify the classification later.

Use the General Rules of Interpretation (GRI)

U.S. Customs and most other authorities use the WCO's General Rules of Interpretation to classify products. You don't need to memorize them, but you should know how they're applied.

A few rules that matter most:

• GRI 1: Classification is determined by the wording of the headings and any relevant section or chapter notes.
• GRI 2: Incomplete or unfinished goods are classified as complete if they have the essential character of the finished item.
• GRI 3: When a product could fit into more than one heading, choose the one that best represents its essential character.
• GRI 6: Subheadings follow the same logic as headings and must also consider relevant notes.

When in doubt, review the official GRI text on the WCO or U.S. Customs website to ensure your interpretation aligns with the legal language.

Most misclassifications happen when teams skip these rules, usually because they don't know they exist. If you're stuck between two options, apply these rules step by step.

Examples: how product details change the outcome

Let's say you're classifying a rechargeable flashlight. Is it an electrical device, a portable light source, or a battery-powered tool?

If the flashlight has built-in LED lighting and is designed for handheld use, it would likely fall under 8513.10: portable electric lamps designed to function by their own source of energy.

But change the use case slightly, say it's a larger, mountable lamp for industrial use, and you're now in a different chapter altogether.

Another example: leather gloves. Are they clothing? Protective gear? Accessories? If they're designed for industrial or welding applications, you'd need to classify them under protective gear, not general apparel.

The more precise your product description, the clearer the classification path becomes.

Handling bundles, kits, and mixed materials

Products that are sold as sets or kits, especially ones with mixed components, create challenges when it comes to HS code classification. The key is to identify the component that gives the set its essential function. For example, a tool kit might include a drill, screws, and instruction manuals, but the drill is the essential item that determines the classification.

If you're dealing with bundled items or kits, GRI 3 applies. Classify the set based on the main item, not the accessories.

Mixed-material goods (like furniture with metal and wood) should be classified based on the material that gives the product its primary identity. Chapter and section notes often guide these decisions, and they're worth checking before making the final call.

Tools and Resources for HS Code Lookup

Even when you know the basics, finding the right HS code isn't always easy. The good news is that several U.S. agencies offer public lookup tools which are designed to help you search, compare, and validate your product classifications.

Where to look up codes

Here are the most widely used tools for HS code lookups:

• HTS Search (U.S. International Trade Commission): This is the official source for import codes and duty rates. Use this when classifying goods for import into the U.S.
• Schedule B Search (U.S. Census Bureau): Use this when classifying exports. This tool matches the HS structure, but may differ in the final digits.
• CROSS Database (Customs Rulings Online Search System): This database contains thousands of binding classification rulings issued by U.S. Customs and Border Protection (CBP). Reviewing similar rulings helps you understand how CBP interprets specific materials, functions, or product descriptions.
• Keep in mind that not all rulings are published, and some may be modified or revoked – always check the ruling's current status.

Each tool has its own strengths; HTS and Schedule B are best for official code lookup, but CROSS is best when you want to see how specific wording, use cases, or materials have influenced past decisions.

Search smarter, not harder

Most lookup tools are only as good as the information you feed them. Avoid using vague terms or brand names, and instead search with intent, using:

• Generic product descriptions (e.g. "steel bolts" instead of "hex bolt")
• Material type
• Intended use
• Product form (finished vs. unfinished)

Try a few variations. For example, if "ceramic dishware" doesn't yield helpful results, try "plates" or "tableware" instead.

When in doubt, scan headings and subheadings manually. Sometimes a broader category contains exactly what you're looking for, even if the search engine didn't surface it first.

Validate your decision before filing

Once you've identified a likely code for your shipment, take one extra step to check your reasoning. Review:

• The full product description from HTS or Schedule B
• Any relevant chapter or section notes
• Related CROSS rulings, if available

This extra review helps you catch any classification issues before they turn into customs delays. It also supports your decision if CBP ever asks why you chose that code.

For high-value or high-volume products, it may also be worth documenting your logic internally or requesting an advance ruling if there's any uncertainty.

Common Mistakes and How to Avoid Them

Even when you understand the basics, HS code classification can trip up well-meaning teams. Many of the most common errors happen not because someone wasn't paying attention, but because the rules can seem open to interpretation, or product details get lost along the way.

These are some of the pitfalls your team can fall into, especially if they are classifying items at scale or across different business units.

Assuming the first "close match" is correct

Many HS codes look similar on the surface but contain crucial details that differentiate one product from another. One code might apply to plastic pipes for construction, another to plastic hoses for machinery, and the wrong one can create serious cost or compliance issues.

Always check the full product description, and use the section or chapter notes to confirm your assumptions.

Ignoring section and chapter notes

Chapter notes aren't filler paragraphs; they're actually legally binding guidance for your team. They explain how to interpret headings, define key terms, and outline exceptions that could shift your product into a different category.

For example, a part might seem like it fits under general hardware, but a chapter note might reclassify it under electrical components based on its function. Without checking those notes, it's easy to misfile the item entirely.

Overlooking how composite goods are handled

Many modern products are made of multiple materials or serve more than one function. When that's the case, classification should be based on what gives the item its primary purpose, rather than what it's made of.

This is where the General Rules of Interpretation (especially Rule 3) come into play. Choosing the right code often means asking: what function defines this product?

Forgetting to document your rationale

If your classification is ever challenged by customs, a partner, or internally, having documentation of your rationale helps. A simple explanation of your decision, including product details, source references (like HTS or CROSS), and any notes on why alternatives were rejected, can save time and protect your position.

This becomes especially important when working across teams; one person's logic can be difficult to trace six months later unless it's written down.

Not requesting an advance ruling when things are unclear

If you're dealing with a high-risk or high-volume product and there's genuine uncertainty about classification, U.S. Customs offers a formal process for guidance. You can submit a request for an advance ruling, present the product details, your preferred classification, and supporting information.

You'll get an official decision from the U.S. Customs office, and that decision can protect your team from disputes down the line. While not every product needs this level of oversight, it's worth considering for critical SKUs or new product categories.

Tip: A CBP binding ruling (sometimes called an advance ruling) provides an official decision on how your product will be classified. These rulings are legally binding for both the importer and CBP, as long as the facts remain the same. You can submit a request through the CBP eRulings portal and cite it later if your classification is ever questioned.

Business Impact for Supply Chain and Procurement Teams

In practice, procurement and supply chain teams are often the ones closest to product details, which means they play a key role in getting classification right.
Misclassification affects more than compliance

Incorrect codes can inflate duties or cause underpayments that trigger full audits of your processes. Beyond that, they can affect your landed cost calculations, supplier comparisons, and your ability to model scenarios accurately. If your product is classified under a code with a 10% duty instead of 3%, that difference goes straight to the bottom line.

Procurement teams often rely on estimated landed cost when choosing suppliers. If those estimates are based on incorrect trade tariff codes, the comparisons break down, and any cost advantages disappear after the fact.

Misclassification also puts pressure on logistics. If customs flags your shipment for review because a code seems inconsistent, clearance slows down. And if your documentation doesn't match across systems, it raises questions that take time to resolve.

Even small duty rate differences – say, a 3% vs. 10% rate – can have major cost implications across high-volume imports, directly affecting profitability and supplier comparisons.

Make classification part of your sourcing and logistics workflows

Good classification starts earlier than most teams realize. When selecting suppliers, defining part numbers, or setting up materials in the system, your team should already be thinking about HS codes.

Practical ways to embed it:

• Add HS code fields into your product master data or item setup
• Include classification checkpoints in sourcing processes
• Align with logistics teams on documentation standards
• Store notes or references on past classifications for reuse or audits

The more structure you build in, the fewer surprises show up at the border.

Train your team to classify consistently

It's not enough to rely on one expert. If your business trades internationally, multiple people need to be involved in ordering, documenting, or shipping a product, and they all need a shared understanding of how classification works.

This is where targeted training helps; teams that understand the logic behind HS codes are more likely to catch mistakes, ask better questions, and apply codes consistently. That consistency reduces risk, saves time, and improves your overall supply chain performance.

To build that capability, programs like Skill Dynamics' procurement training and supply chain training focus on real-world processes, including how to get HS code classification right, team by team.

Conclusion: Build Confidence in Classification Before It Costs You

HS code classification might seem like a small detail of your processes, but it influences every stage of international trade, from supplier selection to landed costs to customs clearance.

When your team knows how to classify products accurately, delays shrink, costs stay predictable, and compliance risk goes down. But more importantly, classification becomes part of a smarter, more responsive trade process.

If your organization wants to embed this capability at scale, Skill Dynamics' procurement training, supply chain training, and operational procurement training are designed to close knowledge gaps and build consistent performance for their unique role and skillset.

FAQs About HS Code Classification

How often do HS codes change?

The World Customs Organization updates the Harmonized System codes every five years, but individual countries, including the U.S., can and do update their own codes and duty rates more frequently. It's good practice to review your classifications annually and check for updates to help ensure accuracy, especially if you're entering new markets.

Can a product have more than one HS code?

Each product should ultimately be assigned a single, correct HS/HTS/Schedule B code based on its essential function and construction. However, borderline cases can exist. When that happens, apply the General Rules of Interpretation or request a binding ruling from CBP for clarity.

What if no code fits my product exactly?

This happens more often than you'd expect. If your product doesn't clearly match any one description, choose the code that best reflects its essential character. Avoid defaulting to "other" unless you've ruled out more specific options. You can also consult CBP's CROSS rulings to see how similar products were handled.

How accurate does the classification need to be?

Accuracy isn't optional, and customs authorities expect correct classification backed by logic and documentation. If your team relies on guesswork or outdated codes, you risk penalties, shipment holds, and audits.

What are the penalties for getting it wrong?

U.S. Customs and Border Protection (CBP) can impose penalties, demand repayment of underpaid duties, or issue liquidated damages depending on the nature of the error. Penalties can range from negligence to gross negligence or fraud, with fines scaled accordingly. Even unintentional mistakes can cause problems like causing shipment delays or trigger audits, so consistent documentation and review are key. Repeated issues can also damage your relationship with customs brokers or forwarders as well as CBP.

Where can I find official rulings or guidance?

The best source is the CROSS database, where U.S. Customs publishes thousands of classification rulings. You can search by keyword, product type, or HTS number to find examples of how similar items were classified.

You can also request a binding ruling directly from CBP via the eRulings portal, which provides an official determination you can rely on for future shipments.

Is HS code training available for teams?

Yes. Role-based training helps teams classify products more accurately, especially when working across departments or regions. Programs like Skill Dynamics' operational procurement training are built to support day-to-day tasks like classification, sourcing, and trade documentation.