Classifying Your Products for Importing and Exporting [Webinar Recap]

With new U.S. tariffs taking effect in 2025, importers and exporters are under pressure to find legitimate ways to reduce duty costs without stepping outside the bounds of trade compliance.

One of the first places companies are looking? Product classification.

The codes you use directly impact your duty rates, regulatory requirements, compliance risk and free trade agreement eligibility.

To help you navigate this complex process, Shipping Solutions hosted a two-part webinar series with international trade expert Robert P. Imbriani focused entirely on classification. These sessions covered everything from the basics of the Harmonized Tariff Schedule (HTS) and Schedule B, to detailed questions about real-world products, dual-use goods, International Traffic in Arms Regulations (ITAR) issues, free trade agreements and how U.S. Customs is enforcing compliance today.

Read on for a quick recap of the key highlights from the webinar, or, better yet, watch the full recordings here:

• Part 1: Classifying Your Products for Importing and Exporting
• Part 2: Ask Me Anything: Classifying Your Products for Importing and Exporting

What Is Product Classification and Why Does It Matter?

Classification is the legal analysis used to assign your products a code under the Harmonized System (HS). That code determines:

• Your import duties
• Your eligibility for free trade agreements like USMCA
• Your compliance with other government agencies (like FDA, BIS and ITAR)
• The accuracy of your AES filings and export documentation

And the consequences of getting it wrong? Fines, penalties, shipment delays and in serious cases, criminal charges.

Bob reminded us that classification is not a “best guess” exercise. It requires a careful review of:

• The product’s essential characteristics
• Its material makeup and function
• Applicable General Rules of Interpretation
• Section and chapter notes within the tariff schedule
• And sometimes, a binding ruling from U.S. Customs

HTS vs. Schedule B: Which Do You Use?

Bob walked through the differences between the Harmonized Tariff Schedule (HTS) and the Schedule B:

• HTS is used for imports and FTA qualification.
• Schedule B is used for export reporting.
• Both systems share the first six digits, which are harmonized globally.
• The last four digits are country-specific and often reflect local trade needs.

If you are importing the goods into the United States, you must classify your products using the Harmonized Tariff Schedule of the United States. It’s the more comprehensive set of classification numbers. If you only export, you can use the Schedule B, since it is faster and easier to use. If your company both imports and exports, you may want to use the HTS codes, so you don’t have to classify your products twice. However, be aware that there is a small group of HTS codes that can’t be used for exporting.

Read more in our article HS Codes, HTS Codes and Schedule B Codes: What's the Difference?, or watch this video: 

The 6 General Rules of Interpretation (GRIs)

Classification isn’t just about finding the right chapter—it’s about applying the correct legal framework. Bob explained the six GRIs that govern classification:

• Rule 1: Classify the product as it's described (e.g., “a bolt is a bolt”).
• Rule 2: Incomplete or unassembled items can be classified as the full item if they have its essential character.
• Rule 3: When a product could be classified multiple ways, use the most specific or determine the essential component.
• Rule 4: If nothing fits, classify based on the closest similar item.
• Rule 5: Cases and packaging are generally classified with the product—unless they have a standalone use or value.
• Rule 6: Keep applying these rules as you narrow down the subheadings to the 10-digit level.

Learn more in the free webinar, Using the General Rules of Interpretation to Find the Correct Schedule B Codes for Your Exports.

Real-World Questions from the AMA Session

In Part 2 of the series, Bob returned to answer attendees’ classification questions. Here are some highlights:

How do you classify a CD with ITAR-controlled data?

Break it into two parts:

• Classify the physical disc as the medium (low value, minimal importance).
• Classify the data or software based on what it does (e.g., radar operation). And yes, ITAR-controlled data must be reported—even if the disc itself is worth less than $2,500.

What about shipping electronics in a Pelican case?

If the case is specifically fitted for the electronics, it gets classified with the item. If it's just being used for shipping and is not tailored to the item, it should be classified—and valued—separately.

Do I need to file EEI for U.S. territories?

• Yes for Puerto Rico and the U.S. Virgin Islands
• No for Guam and other territories (unless value/licensing requires it)

Can I use a different HTS code for my overseas customer?

Your U.S. export documentation must reflect U.S. classification. You can provide your customer with their local code, but label it clearly (e.g., “EU HTS: 9031.80”).

Be Prepared for Customs Scrutiny

Increased tariffs have led many importers to reclassify their goods—sometimes for good reason. But U.S. Customs and Border Protection (CBP) is watching. Bob emphasized:

• If you're reclassifying goods, document your process: Include reasoning, GRIs applied, and supporting data.
• Consider requesting a binding ruling for high-risk or high-value items.
• Expect more audits on classification, country of origin and forced labor concerns.

Learn more about how the government is cracking down on Customs fraud in our article, What Is the False Claims Act & How Does It Affect Importers?

Software Can Help with Compliance

Classification is complex. While it’s possible to use government sites like BIS and the Schedule B search engine to find classifications, they can be hard to navigate. That’s why many companies rely on Shipping Solutions Export Documentation and Compliance Software to:

• Search HTS and Schedule B codes more efficiently
• Integrate product classifications into export documents automatically
• Reduce errors and save time
• Stay compliant with regular updates and built-in rules

If you’d like to learn more, sign up for a free demo of the software here, or give our standalone Product Classification Software a try for free here.

Watch the Webinars On Demand

If you want to go more in-depth than these webinar highlights, watch the full recording of Part 1 here or download a copy of the free guide, Classifying Your Products for International Trade.

And if you need help in another area, these aren’t the only webinars we’ve hosted to help you manage the evolving trade landscape. Explore our on-demand webinars on country of origin, free trade agreements, export documentation and compliance, Incoterms and more.

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