HS Code (Harmonized System)

The Harmonized System (HS) provides a universal language for classifying traded goods, developed by the World Customs Organization and used by over 200 countries. For textile importers, understanding HS codes is essential because they directly determine duty rates—and the difference between similar-sounding classifications can mean significant cost variations.

The code structure follows a logical hierarchy. The first two digits identify the chapter (54 for man-made filaments, 52 for cotton, 63 for made-up textile articles). The next two digits narrow to the heading, and the final two of the international standard specify the subheading. Countries then add their own digits for national subdivisions—the US uses 10 digits (HTS), China uses 10, and the EU uses 8.

For woven fabrics, the classification depends on fiber content, construction, and weight. Cotton wovens split between HS 5208 (≤200 g/m²) and HS 5209 (>200 g/m²). Synthetic filament wovens fall under HS 5407, while synthetic staple fiber wovens use HS 5512 or 5515 depending on composition. Finished textile products like bedding and towels classify under HS 63.

Consider HS 5407.61 as an example: 54 indicates man-made filaments, 07 specifies woven fabrics, and 61 identifies fabrics containing 85% or more polyester filaments, unbleached or bleached. Each digit narrows the classification, and the correct combination determines the applicable duty rate.

Classification matters beyond duties. Trade agreements like RCEP or bilateral FTAs offer preferential rates for qualifying goods, but only if the HS code falls within covered categories. Quota restrictions may apply to specific codes. Statistical agencies track trade flows by HS classification, affecting how governments view import patterns.

The challenge lies in accurate classification, particularly for blended fabrics where the predominant fiber determines the code, or for products where the end use affects classification. A fabric sold as "shirting" might classify differently than the same fabric sold as "lining." Customs authorities can challenge classifications and assess penalties for errors, making it worthwhile to verify codes with a customs broker before shipping, especially for new products or unusual compositions.