United States Customs: Dutiable Status of Goods

The customs clearing process, in a nutshell, amounts to clearing the arriving goods under a certain customs category. For this purpose, US Customs uses the Harmonized Tariff Schedule of the United States, a bible of product categorization or more properly, product classification.

GoodsThis publication is frequently updated and amended. It dissects each and every category of products into minute details based on product materials, composition, workmanship and other factors.

For your purposes, as an importer, you better learn what product category or rather classification you or your broker will eventually use to clear your goods through the US Customs and do so before you buy.

In short, you must be familiar with the classification under which your goods will enter the United States Customs because the description on your invoice must be as close to that of the classification from the Harmonized Tariff Schedule as possible to justify its use/selection.

If so, you will be able to use such a classification. If Customs decides that yet another category best fits the product your are importing, they will reclassify it and if the new category they chose to enter it under entails higher duty as oppose to no duty or lower duty you calculated your landed cost based on, then you shall diminish your profit as a result of this unexpected reclassification.

The bottom line is – before you buy, consult your Customs Broker and get his/her input as to the classification you’ll have to use. Let the broker fill you in on all the potential problems, special documents needed (textile visa, quota documentation etc.), if any, as well as any pertinent duties you will have to pay, if any. This way you’ll have a better idea as to what you’ll face once you enter the goods through the US Customs.