5 Costly Tariff Classification Mistakes Importers Make

February 26, 2026 · 6 min read

Getting your HTS classification wrong doesn't just mean paying the wrong duty rate — it can trigger CBP audits, penalties up to 4x the unpaid duties, and even seizure of goods. Yet misclassification is surprisingly common, especially among small and mid-size importers who don't use customs brokers.

Here are the five most expensive mistakes we see.

1. Classifying by Intended Use Instead of Material

This is the #1 mistake. The HTS generally classifies products by what they're made of, not what they're used for.

Example: A silicone phone case. Many importers classify it under 8517 (telephone parts) — seems logical, right? But the HTS classifies it under 3926 (other articles of plastics) because it's made of silicone/plastic. The duty rates can be very different.

The General Rules of Interpretation (GRI) specify that classification is determined first by the terms of the headings and section/chapter notes — not by the product's marketing or end use.

2. Using the Wrong Number of Digits

For US customs entry, you need the full 10-digit HTS code. Many importers (especially those sourcing from overseas suppliers) only have the 6-digit HS code from the exporting country.

⚠️ This matters because: Two products under the same 6-digit HS code can have very different duty rates at the 10-digit HTS level. Example: HS 6204.62 covers women's cotton trousers — but the 10-digit breakdowns distinguish between different fabric weights, constructions, and styles, each with different rates.

3. Ignoring "Sets" and "Composite Goods" Rules

If you're importing a product that combines multiple materials or components (like a gift set, a tool kit, or a device with accessories), the classification rules get complex:

GRI 3(b): Sets are classified by the component that gives them their "essential character"
GRI 3(c): If essential character can't be determined, use the heading that comes last numerically

Example: A first aid kit containing bandages (Chapter 30), scissors (Chapter 82), and a plastic case (Chapter 42). The kit is classified by its essential character — likely the medical supplies — not the most expensive component.

4. Not Updating Classifications After HTS Revisions

The HTS is updated annually, and major revisions can reclassify products into different headings with different rates. The 2026 Revision 4 changed dozens of subheadings.

If you've been importing the same product for years using the same HTS code without checking for updates, you might be:

Overpaying: Your product moved to a lower-rate heading
Underpaying: Your product moved to a higher-rate heading (and you're accumulating back-duty liability)
Filing invalid codes: Your old code was deleted or restructured

5. Relying on Your Supplier's Classification

Your Chinese, Vietnamese, or European supplier will often provide an HTS code on the commercial invoice. Do not blindly trust it.

Suppliers use the HS system (6 digits), not the US HTS (10 digits)
They may intentionally misclassify to make their product appear cheaper or duty-free
Their classification may be correct for their country but wrong for the US
You, the importer of record, are legally responsible for the classification on your customs entry — not your supplier

How to Get It Right

Start with Tariff Check — search your product and review matching HTS codes with descriptions and rates
Read the Section and Chapter Notes in the official HTS — they contain critical exclusions and definitions
Apply the General Rules of Interpretation (GRI) in order: GRI 1 first, then 2, 3, etc.
Request a binding ruling from CBP if you're unsure — it's free and gives you legal certainty
Use a licensed customs broker for high-value or complex imports

💡 Pro tip: CBP's CROSS database contains thousands of past classification rulings. Search for your product — chances are someone has already asked CBP how to classify something similar.

Disclaimer: This article is for educational purposes only. For binding classification rulings, contact US Customs and Border Protection. For complex imports, consult a licensed customs broker.