If you deal with imports or exports, you've almost certainly seen HS and HTS codes. Created by the World Customs Organization in 1988, Harmonized System codes have served as the basis to categorize every single good crossing a country's borders since that time. If it can be imported, it has a code.
If you're in the United States, you likely care more about HTS codes than HS Codes since they serve as the basis for importing into the United States. While there are slight differences, it's important to first understand the Harmonized System as a whole since it serves as the basis for all tariff tracking in every country including the United States.
The Structure of the Harmonized System
The Harmonized System is split up into a hierarchy of sections, chapters, headings, and subheadings. Currently, there are 21 sections, 96 chapters, 1,228 headings, and 5,612 subheadings.
Let's take a look at an example of how this works in practice using roasted, caffeinated coffee.
Coffee broadly falls into Section II of the Harmonized System. Section II contains every openly traded vegetable product. From there, the coffee products are all listed in Chapter 9 of Section II - Coffee, tea, maté, and spices.
Once we get into the Headings and Subheadings the nuances of the higher level classifications begin to show up. Heading 0901 (Coffee) is split up into 6 subheadings:
0901.11.00: Not roasted, not decaffeinated
0901.12.00: Not roasted, decaffeinated
0901.21.00: Roasted, not decaffeinated
0901.22.00: Roasted, decaffeinated
0901.90.10: Coffee Husks and skins
0901.90.20: Substitutes containing coffee
Every coffee product that you see in stores falls into one of these subheadings. If it was imported, a declaration was made on a customs form using whichever of the above subheadings was applicable.
Chapter 9 continues on after the coffee heading and follows the same pattern for everything from green tea to cinnamon.
What about HTS?
Since Harmonized System codes are an agreed upon international standard that applies globally, the United States added an additional layer on top of those codes for their own usage.
There's really only one difference between HS and HTS codes. In order to further classify goods for the purpose of tariffs, the United States' HTS system adds a two digit "Statistical Suffix" to the end of some HS codes.
Following our coffee example above, HTS adds four extra classifications under the HS code 0901.21.00 - Roasted, not decaffeinated:
0901.21.0035: In retail containers weighing 2 kg or less, Certified Organic
0901.21.0045: In retail containers weighing 2 kg or less, Other
0901.21.0055: Other, Certified Organic
0901.21.0065: Other, Other
With the addition of these statistical suffix based classifications, the US is able to, for example, add a tariff only to imported organic coffee in small packages that's intended to be sold in retail stores.
Classifying a Shipment
When it comes time to classify a shipment, the responsibility lies solely on either the importer or the exporter to get it right. If you are the importer, it's critical that you discuss the HS code assignment with the exporter since that is the code that will be used by the customs agency in your country.
Because the system is so vast, a given good might seem to fall into multiple different subheadings. In addition to that, countries themselves may have different interpretations of which specific subheading a given good may fall into. This issue really becomes problematic in the manufacturing world when importing components of a larger good prior to assembly.
If you want to be 100% sure that you're getting it right, the only authoritative way to do so is to submit a request for a ruling letter with Customs and Border Patrol. The only caveat is that when they respond with an official ruling, you are legally required to use it moving forward.