Major Taiwanese news network Liberty Times Network (LTN) recently reported that many Chinese exporters were found to have changed product’s HTS codes or country of origin markings to avoid the U.S. import tariff. The HTS code is a 10-digit U.S. Customs code associated with each individual product type exported to the United States. The HTS code is a widely accepted product identification system across global import/export transactions. Traditionally, as a common way to avoid the tariff, Chinese exporters have sometimes exported to a third-party country, repackaged the products there and then shipped them to the U.S. market. However, the U.S. Customs and Border Protection (USCBP) recent statistics showed a sharp increase in “suspicious categories” related to HTS code changes (three times more than six months ago). Exporters were found to have changed the HTS codes in the Alibaba Partner Community. For example, Chinese steel plates (high tariff) were exported as “turbine components” (low tariff).
Source: LTN, October 10, 2018