Tariffs have become a major topic in recent months, and for good reason. Manufacturers are increasingly concerned about the potential impacts of newly imposed reciprocal tariffs, as the United States has placed higher duties on goods from various foreign countries. These sudden changes have left many manufacturers scrambling, with little notice, to shift their supply chains to avoid steep price increases on previously affordable components like steel, molds, chemicals, electrical parts, assemblies, and contract-manufactured goods — all critical elements of a resilient supply chain.
As your organization considers which parts of your supply chain to reshore to the United States, it’s important to recognize that relocating your entire operation on short notice is rarely feasible without significant trade-offs: higher costs passed to customers, potential quality risks, and complex renegotiations with current suppliers.
Fortunately, there’s a strategic tool available to help: by analyzing your products through the Harmonized Tariff Schedule (HTS), you can better identify which parts of your supply chain or key product lines might be better suited for sourcing domestically — or elsewhere — to minimize tariff impacts and maintain your competitive edge.
Understand HTS Codes:
The U.S. International Trade Commission (USITC), through its Office of Tariff Affairs and Trade Agreements (TATA), administers the Harmonized Tariff Schedule (HTS), which classifies imported goods based on material, product name, or function. The HTS follows an international structure up to the 6-digit level and contains over 11,000 8-digit subheadings, with optional 10-digit extensions for detailed reporting. While the World Customs Organization (WCO) manages the global Harmonized System (HS), the USITC maintains the U.S. version, and U.S. Customs and Border Protection (CBP) uses it to classify imported goods.
HTS codes assess duty rates, classify traded goods, and collect trade data in the United States and worldwide. Important to note, codes are particular and have a lot of variation because they are focused on the form in which the product is imported.
Essentially, HTS codes are unique numerical identifiers assigned to specific commodities. Each code corresponds to a product and includes key information such as description, unit of measure, and applicable duty rates.
Note: These are baseline tariffs per commodity.
- HTS Number: A 10-digit number classifies a product for tariff and trade purposes. The first six digits are international (harmonized globally), and the last four are U.S.-specific.
- Article Description: A short product description
- Unit of Quantity: Unit being measured for imports
- General Rate of Duty: The normal tariff (import tax) applies to goods from most countries (those with Normal Trade Relations status).
- Special Rate of Duty: A different duty rate that applies if a special trade agreement exists (like USMCA, GSP, Free Trade Agreements). It often shows codes like “Free” and “A*” or lists multiple options depending on eligibility. This rate could be lower than the general rate of duty.
- Column 2: Tariff for Countries without Normal Trade relations with the US. (North Korea and Cuba)
Reading an HTS Code:
- 09 – Chapter (e.g. Coffee, tea, maté and spices).
- 0902 – Heading (e.g. Tea, whether or not flavored).
- 0902.10 – Subheading [e.g. Green tea (not fermented) in immediate packings of a content not exceeding 3 kg].
- 0902.10.10 – Subheading (e.g. Flavored) – establishes the U.S. customs duty rate.
- 0902.10.1015 – Subheading (e.g. Certified Organic) – provides additional statistical information.
Referenced: https://certified-laboratories.com/blog/how-to-read-an-hts-code-estimate-customs-duties/ [1]
Flavored Green Tea is subject to a 6.4% tariff charge; there is no unit of quantity listed here, so we can assume the importer can multiply 6.4% times the invoice to get an estimate of the total customs duty rate. This duty rate is applicable to every country except for those listed under the special column. If the country they are imported from is one of the countries listed under the special column, there is no customs duty if they order from any of those countries (except for Japan, as their customs duty rate is 3.2%). To determine standard tariff rates relevant to your supply chain needs, consult the HTS online resource. You can look up keywords and HTS codes to get estimates of customs duty rates.
May 2025 Tariff Changes – 10% Baseline Tariff and Reciprocal Rates:
In early April 2025, the U.S. government implemented sweeping tariff increases that overlay on top of the existing HTS duty rates. Notably, a new universal 10% ad valorem (value of imported goods rather than by unit) tariff applies to all imports effective April 5, 2025 [2]. This means importers must pay an extra 10% duty on the customs value of goods in addition to the normal tariff rate determined by the product’s HTS code classification.
For example, if a product’s HTS classification normally carries a 5% duty rate, it will now incur a total duty of 15% (5% base HTS duty + 10% IEEPA tariff) under the new rule. Even items that previously entered duty-free under Most-Favored Nation rates will now be subject to 10% duty unless an exemption applies. According to U.S. Customs and Border Protection (CBP), these IEEPA “reciprocal” tariffs are in addition to any other duties, taxes, and fees that would otherwise apply [3]. Importers should continue to consult the official Harmonized Tariff Schedule (HTS) for the base rates of duty for each product (available via the USITC’s HTS online lookup tool), and then apply the new 10% on top of those rates as applicable.
Alongside the across-the-board 10% tariff, the administration introduced country-specific “reciprocal” tariffs on dozens of trading partners starting April 9, 2025 [4]. These additional tariffs target 57 countries with higher rates (ranging approximately from 11% up to 50%) based on each country’s trade practices [4]. In practice, goods from these designated countries become subject to a higher total additional tariff instead of just the 10% baseline. For instance, imports from Vietnam might face a 46% surcharge, while products from Lesotho see a 50% tariff, among other country-specific rates [4]. It’s important to note that these percentages stack on top of the normal HTS duty as well. The White House fact sheet announcing the measures confirmed that a 10% tariff applies to all countries as a base, and a higher “individualized reciprocal” tariff applies to certain countries with large trade deficits (with the 10% remaining the baseline for all others) [2].
Exclusions and free trade agreements:
Goods qualifying for USMCA from Canada or Mexico remain duty-free under these tariff actions [3]. Canada and Mexico are explicitly exempted from the new tariffs – imports that meet USMCA rules of origin continue to enter at 0% duty. Additionally, certain product categories were carved out of the April 2025 measures. The tariffs do not apply to goods already subject to Section 232 national security duties, such as most steel and aluminum products, as well as to specific sectors like automobiles and critical materials [2]. In the White House order, President Trump listed several exclusions: “steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs” are not subject to the new reciprocal tariffs, nor are items like pharmaceuticals, copper, certain semiconductors, lumber, energy products, and some critical minerals [2]. This means if an imported article falls in one of those exempted categories, the importer will not add the 10% or any country-specific surcharge on that item. All other products, however, are covered. (CBP has provided detailed lists of exceptions under special HTS Chapter 99 headings – for example, 9903.01.33 covers exclusions for articles of steel, aluminum, and certain vehicles under Section 232 [3].)
Final Thoughts:
Ultimately, HTS codes are more than just a customs classification tool — they’re a strategic lens into your global sourcing decisions. When paired with timely tariff data, they empower manufacturers to act quickly, avoid costly missteps, and proactively manage supply chain risk. By embedding tariff evaluation into your sourcing analysis, your organization gains a practical advantage: the ability to adapt to uncertainty without sacrificing profitability. The manufacturers that succeed in today’s trade environment will be those who use every tool available — and the HTS is one of the most powerful.
Footnotes:
[1] https://certified-laboratories.com/blog/how-to-read-an-hts-code-estimate-customs-duties/
[3] https://content.govdelivery.com/accounts/USDHSCBP/bulletins/3da7831
[4] https://www.tradecomplianceresourcehub.com/2025/05/16/trump-2-0-tariff-tracker/
Additional Resources:
- Three-hour module that dives in deeper on how to read HTS codes: https://learning.usitc.gov/hts-guide/#/
- Looking for a domestic source for your needs, visit our supply chain center to find an Illinois or US supplier: https://www.imec.org/supplierneeded/
- Visual process map for if the new tariffs apply to your products
- Reference: https://www.millerchevalier.com/publication/what-you-need-know-about-reciprocal-tariffs-updated
Disclaimer: Portions of this message were reviewed and refined using OpenAI’s ChatGPT to assist with clarity, tone, and topic research. This content is intended for informational purposes only and does not constitute legal advice
