UPDATE:12/29/21— The changes to the U.S. Harmonized Tariff Schedule (HTS) will take effect 30 days from the notice’s publish date in the Federal Register. The proclamation amends tariff schedule provisions on Section 301 tariffs and on various trade agreements to conform to the changes found in the HTS. It also removes—effective January 1—Ethiopia, Guinea and Mali as African Growth and Opportunity Act (AGOA) beneficiaries, as they no longer meet the requirements.

UPDATE:12/20/21—CBP has sent out a statement that the anticipated HTS classification changes will not take effect—on January 1, 2022—until formal guidelines are provided by Presidential Proclamation. “In the interim, CBP will continue to use the current harmonized tariff schedule and encourages the trade community to do the same until further guidance is provided.”

If importers have not yet, now is the time to review existing tariff classifications for their products—in preparation for major changes to the tariff schedule that will take effect January 1, 2022. Notable changes are for goods of chapters 44, 84 and 85, with some changes to chapter notes, which means changes for textiles and apparel.

Changes to the Harmonized System will affect classifi­cation at the four- and six-digit level for participating countries worldwide. Some of the noteworthy changes are as follows,

  • Smartphones, in Chapter 85, will be broken out into their own tariff provision under heading 8517, and classification changes will affect not only smart­phones but also their accessories and component parts.
  • A new heading in Chapter 88 will be created for unmanned aerial vehicles (drones) under new heading 8806. Shiitake mushrooms will be given their own six-digit breakout in subheading 0709.54.
  • Changes to chapter notes will have an outsize impact for textiles and apparel. Currently, women’s woven shirts with pockets at the bottom, such as scrubs, are classified in heading 6211, and receive a lower duty rate, but that is not the case for men’s shirts. That will change Jan. 1, with the relevant chapter note making men’s woven shirts with pockets at the bottom, currently classifiable in heading 6205, instead clas­sifiable in heading 6211.
  • Other notable affected goods are—flat panel display modules; electric vehicles; tobacco products intended for inhalation without combustion; edible insect products; virgin and extra virgin olive oil; cell therapy products; rapid diagnostic test kits for detecting the Zika virus and other mosquito-borne diseases; placebos and double-blinded clinical trial kits; electronic waste (e-waste) and other hazardous waste; amusement park equipment; and cultural articles (i.e., antiquities).

What is still unknown is how the Office of the U.S. Trade Representative (USTR) will handle Section 301 tariffs and Section 301 exclusions for goods that are affected by the changes. Another aspect that will be affected is tariff flagging—for instance, on goods subject to antidumping and countervailing duties (AC/CVD). AD/CVD coverage is dictated by the written scope of an order, so whether a good is subject or not will not change, but the importer or broker may not see an AD/CVD flag in the Automated Broker Interface.

Importers should look at the customs rulings they rely on to see if they are affected by the classification changes, and if they are, importers may want to seek modification of the relevant ruling to make sure it still applies. If you have questions on how these changes will impact your products, reach out to Mohawk Global Trade Advisors.

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