Recent Trade & Tariff Perspectives

January 5, 2022  |  Anahi Czeszewski  Product Development Manager

Changes to the Harmonized Tariff Schedule of the United States Take Effect January 27, 2022

On December 28, 2021, a presidential proclamation was published in the Federal Register to modify the Harmonized Tariff Schedule of the United States (HTSUS) as a result of the 351 sets of upcoming amendments to the Harmonized System (HS). As these changes to the HTSUS soon go into effect, ensure you adapt to them to avoid costly compliance issues or inconvenient supply chain delays.

The United States’ modifications to the HTSUS: An overview

Following the release of the World Customs Organization’s (WCO) proposed amendments to the HS nomenclature—which is undertaken every five years—the U.S. International Trade Commission (USITC) began its internal review of the HTSUS.

The WCO identified the necessary modifications required to remain consistent with the upcoming HS amendments, and in turn, promote the uniform application of the HS Convention. The USITC, as a result of its continuous efforts to lawfully conform the HTSUS to the upcoming amendments, issued its proposed recommendations to the President in May 2021.

The Biden Administration announces its adoption of the HS 2022 nomenclature

President Biden determined the USITC’s recommended modifications properly conform with U.S. obligations under the HS Convention. Accordingly, on December 23, 2021, the Biden Administration published a proclamation, announcing the specific amendments to the HTSUS to implement the five-year update to the WCO’s HS tariff nomenclature. A formal Federal Register notice was subsequently published on December 28, 2021.

How can these changes to the HTSUS impact my company?

Customs classification updates can result in significant implications to shippers engaging in cross-border trade, some of which include:

• Punitive tariffs could potentially be added to your bottom line or possibly be removed. Ensure you identify any potential changes to Section 301 China tariffs and Section 232 steel and aluminum tariffs.
• Modification to the HTSUS can possibly change your eligibility for participation in preferential trade agreements. Therefore, review the implications in full to understand the impact on your landed cost in 2022.
• Products may need to meet new (or additional) partner government agency requirements.
• Amendments could result in new flags for antidumping and countervailing duty cases, which were previously unflagged.

What can I do to prepare for these rapidly approaching changes to the HTSUS?

Exercising proactivity in preparation for the upcoming HTSUS changes is critical for companies importing merchandise into the United States. Act now to understand the impact the upcoming HTSUS changes will have on your company by applying these steps today:

1. Review the complete list of changes to the HTSUS, as published by the U.S International Trade Commission.
2. Analyze and identify the changes by which your company is impacted. Understand that not all modifications will result in a new tariff heading. For example, some amendments only include additional clarification in descriptions, based on the evolution of certain products.
3. Ensure that as a reflection of the HTSUS 2022, your parts database is updated, as necessary.
4. Communicate your updated parts database to your customs brokers as soon as possible to avoid any unnecessary clearance delays.
5. Maintain an open line of communication with your customs brokers during the transition period. U.S. Customs and Border Protection (CBP) is now tasked with making updates within the Automated Customs Environment (ACE) programming to reflect the recent updates to the HTSUS.
   
   (Now that a formal proclamation has been made by the President, CBP is working diligently to make the necessary updates to its programming in preparation for these changes. As a result, we have seen an influx of Customs Systems Messaging Service (CSMS) messages communicated, indicating CBP is continuing to create and/or amend HTSUS records as swiftly as possible to equip its programming for January 27, 2022.)

Steps you should take today

Need help understanding which of your classifications will be affected by the upcoming changes to the HTSUS? C.H. Robinson has a tool to help you quickly analyze these changes specific to your business, thereby allowing you to identify your new tariff classifications. Have instances where upcoming changes result in multiple tariff classification possibilities? Our dedicated classification team can assist with the classification of your specific commodities. Connect with one of our trade policy experts to learn more.

Resources

• A Proclamation to Modify the Harmonized Tariff Schedule of the United States and for Other Purposes | The White House
• World Customs Organization (wcoomd.org)
• Recommended Modifications in the Harmonized Tariff Schedule, 2021 (usitc.gov)
• HS Tracker - Navigate through all HS versions (wto.org)
• Recent Trade & Tariff Perspectives | Prepare for the Upcoming 2022 Harmonized System Updates (chrobinson.com)
• Federal Register: To Modify the Harmonized Tariff Schedule of the United States and for Other Purposes
• Cargo Systems Messaging Service | U.S. Customs and Border Protection (cbp.gov)