How does the harmonized system (HS) code function?

The harmonized system (HS) code is a standardized numerical method used globally to classify traded products. Developed by the World Customs Organization, the HS code comprises six digits that serve as a foundation for classifying goods in international trade. This system allows customs officials and international traders to identify products systematically and uniformly, facilitating trade negotiations, tariffs, and economic data collection. The use of a numerical code ensures that goods can be categorized with precision, enabling easier identification and processing in customs and trade operations.

While there may be other aspects of trade that involve geographical considerations or regulatory measures, the primary function of the HS code lies in its role as a categorization tool for products, which is essential for effective international trade management.