How to Read HS Codes: A Complete Guide for Importers and Exporters

Last updated: April 24, 2025

In the complex world of international trade, Harmonized System (HS) codes serve as the universal language that facilitates the smooth flow of goods across borders. These codes might appear as just a string of numbers to the uninitiated, but understanding how to read and interpret them is crucial for anyone involved in importing or exporting. This guide will walk you through everything you need to know about reading HS codes correctly and using them to your advantage.

What Are HS Codes?

Harmonized System codes, commonly known as HS codes, are standardized numerical codes developed by the World Customs Organization (WCO) to classify traded products. This system provides a common nomenclature for customs authorities worldwide, ensuring consistency in how products are classified regardless of language barriers or local terminology.

The Harmonized System covers approximately 5,000 commodity groups and is used by more than 200 countries, accounting for over 98% of world trade. It allows customs authorities, statistical agencies, and businesses to speak the same language when it comes to product classification.

The Basic Structure of HS Codes

At their core, HS codes follow a logical hierarchical structure. The international standard includes six digits, though many countries add additional digits for further specificity in their national tariff schedules. Let's break down the basic six-digit structure:

1. First Two Digits (Chapter)

The first two digits identify the chapter that the product falls under. There are 97 chapters in the Harmonized System, organized by category.

Examples:

• Chapter 01: Live animals
• Chapter 39: Plastics and articles thereof
• Chapter 84: Machinery and mechanical appliances
• Chapter 85: Electrical machinery and equipment

2. Digits 3-4 (Heading)

The third and fourth digits, when combined with the first two, identify the specific heading within the chapter. Each heading represents a broader product category.

Example:

• 8471: Automatic data processing machines and units; magnetic or optical readers, etc.

3. Digits 5-6 (Subheading)

The fifth and sixth digits provide even greater specificity, identifying the subheading within a heading.

Example:

• 8471.30: Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard, and a display

National Extensions (Beyond Six Digits)

While the first six digits are internationally standardized, many countries add additional digits for their national tariff schedules and statistical purposes:

United States: HTS Codes (10 digits)

In the United States, the Harmonized Tariff Schedule (HTS) adds:

• Digits 7-8: U.S. tariff rate subdivisions
• Digits 9-10: Statistical reporting numbers

European Union: CN Codes (8 digits) and TARIC Codes (10 digits)

The EU uses:

• 8-digit Combined Nomenclature (CN) codes for internal purposes
• 10-digit TARIC codes that include additional information on EU measures

How to Read an HS Code: A Step-by-Step Example

Let's walk through a practical example of how to read an HS code: 8471.30.0100

The Logic Behind HS Code Organization

Understanding the underlying organization of the HS code system helps make sense of how products are classified:

1. Progression from Raw to Processed

Generally, the HS system progresses from raw materials in early chapters to more sophisticated manufactured goods in later chapters:

2. Form Before Function

The HS generally classifies goods based on their material composition or form rather than their function or use. This principle sometimes leads to counterintuitive classifications but understanding it helps predict where a product might be classified.

Common Challenges in Reading HS Codes

Tools and Resources for Reading HS Codes

Several resources can help when you're trying to interpret or find the correct HS code:

1. Official WCO HS Database

The World Customs Organization maintains the official HS nomenclature with explanatory notes.

2. Country-Specific Resources

• United States: The U.S. International Trade Commission's HTS Search tool
• European Union: The EU's TARIC Consultation tool
• UK: Trade Tariff tool by HM Revenue & Customs

3. Classification Rulings

Many customs authorities publish rulings on specific classification decisions, which can provide guidance for similar products:

• United States: Customs Rulings Online Search System (CROSS)
• EU: European Binding Tariff Information database

Practical Tips for Reading and Using HS Codes

The Impact of Correct HS Code Reading

Recent Developments in HS Codes (2022 Edition)

The Harmonized System undergoes periodic updates, with the most recent significant revision taking effect on January 1, 2022 (HS 2022). This revision introduced:

• New subheadings for novel products and technologies
• Updated classifications for environmental monitoring equipment
• New provisions for drones and unmanned aircraft
• Classifications for new types of electronic waste and tobacco products
• Modifications to address dual-use goods

Staying current with these updates is essential for accurate classification.

Conclusion

Learning how to read HS codes correctly is a fundamental skill for anyone involved in international trade. While the system might seem complex initially, its logical structure makes it navigable with practice and proper resources. Correct classification ensures compliance with customs regulations, appropriate duty payments, and smooth cross-border transactions.

Whether you're a seasoned trade professional or new to importing and exporting, investing time in understanding how to read HS codes will pay dividends in streamlined operations and potentially significant cost savings.

Want to learn more about tariffs and international trade? Explore our other resources at tariffglossary.com.