On January 1, 2022, the Harmonized Tariff Schedule of the United States (HTSUS) will be getting a make-over. The facelift to the domestic tariff nomenclature has been in the works since 2019 and is the culmination of several routine, broadscale reviews.
As background, the foundation of the HTSUS is the global Harmonized System (HS). The HS uses six-digit codes to classify products circulating in international trade. All signatories to the Harmonized System Convention, including the U.S., use the six-digit codes set by the WCO. However, signatories are permitted to further define products beyond the six-digit code. For example, the U.S. extends classification codes to the eight- and ten-digit. Extensions or additions to the HS that are specific to a signatory country form that country’s domestic harmonized system, for the U.S., the HTSUS.
The WCO, which is comprised of 183 customs administrations worldwide, administers and maintains the HS. Every five years, the WCO reviews the entirety of the HS to ensure it stays up to date with technological developments and changes to patterns in international trade. The WCO completed its latest review in 2019, approving some 350 amendments to the HS, which will enter into force on January 1, 2022.
Under the 1988 Omnibus Trade and Competitiveness Act, the U.S. International Trade Commission (USITC) is tasked with continually reviewing the HTSUS and keeping it up to date, making modifications as it considers necessary or appropriate consistent with five statutory objectives, which include conforming the HTSUS to any amendments in the HS.
Accordingly, the USITC instituted the investigation to modify the HTSUS shortly after the WCO released its proposed amendments to the HS in summer 2019. In November 2020, the USITC issued notice of proposed recommendations and requested agency and public comment. 85 Fed. Reg. 73824 (Nov. 17, 2020). As required by the 1988 Act, in May 2021, the USITC released to the President a detailed report containing its recommendations for amendments to the HTSUS along with all agency and public comments submitted. If the President determines that the recommended modifications are in conformity with U.S. obligations under the Convention and do not run counter to the national economic interest, then the President, via the U.S. Trade Representative, must submit the USITC report to congressional committees. After a 60-day layover period from submittal, the modifications may be proclaimed, i.e., officially take effect. We do not anticipate any interruption in the procedural formalities and expect the HTSUS will be updated accordingly on January 1, 2022.
Notable changes to the HTSUS to take effect at the beginning of 2022 include a new heading for electronic waste along with subheadings for specific categories of e-waste, new subheadings for smartphones and accompanying Chapter Notes to define the scope of smartphones in this context, and new provisions for tobacco and nicotine-based products like vapes.
Importers and brokers should be aware of the changes so as to ensure that the appropriate classification is being reported to U.S. Customs. For any questions on changes to the HTSUS or classification of merchandise under U.S. law, please contact an attorney at Barnes, Richardson & Colburn.