HS and HTS Codes: Global Trade's Common Language

Accurate and straightforward communication can be one of the most challenging barriers to overcome in the business of international trade, but there are programs in place to make it easier.  Despite the complexity of language differences, people of all nationalities and linguistic backgrounds work successfully together every day in order to keep global trade alive and functioning smoothly.  HS and HTS codes are a system designed to foster that success by providing a common language in which to classify goods.

HS Codes

The Harmonized Commodity Description and Coding System (HS) arose out of a need to communicate a product’s description effectively between diverse countries operating in the global trade arena.  As mentioned in our previous article, “HTS Codes and HS Codes,” a string of numbers is assigned in a specific order to define the attributes of a good that is being shipped with specificity.

This system works similarly to the Dewey Decimal System in that the first numbers in the string offer the most general information, while each number that follows specifies the description further.  Because even a product’s preparation method can mean a difference in how it will be handled by Customs, this highly specific method of describing items is vital to the smooth functioning of the import/export process.

HS codes allow accurate classification of goods regardless of differences in spoken language between trading parties.  The code “0601.90” represents the same good in every country that adheres to the HS standard.  Without a common language like HS codes, international trade would be more difficult to conduct efficiently.

HTS Codes

HTS Codes are vital for anyone bringing goods into the United States.  These codes are based on six digit HS code standards, but include an additional four digits, which specify U.S. duty rates, and provide additional statistical information.

For more detailed information on HS and HTS codes, visit CBP’s website.