7 Benefits of Using HS Code for Import and Export

HS code, or Harmonized System code, is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics. HS code is based on the international Harmonized System, which is the global system of nomenclature applied to most world trade in goods. In this article, we will explore some of the benefits of using HS code for import and export.

1. Simplify customs procedures

One of the main benefits of using HS code is that it simplifies customs procedures by providing a common language for describing products. This reduces the risk of misclassification, delays, penalties, or disputes. HS code also helps to ensure compliance with trade agreements, regulations, and restrictions.

2. Facilitate trade negotiations

Another benefit of using HS code is that it facilitates trade negotiations by enabling comparison and analysis of trade data. HS code allows countries to monitor and evaluate their trade performance, identify potential markets, and negotiate tariff reductions or preferences. HS code also helps to harmonize trade policies and measures among different countries.

3. Enhance market research

A third benefit of using HS code is that it enhances market research by providing detailed and accurate information on trade flows. HS code allows businesses to identify their competitors, customers, suppliers, and opportunities. HS code also helps to assess market demand, supply, trends, and prices.

4. Optimize logistics and inventory management

A fourth benefit of using HS code is that it optimizes logistics and inventory management by improving product identification and tracking. HS code allows businesses to plan and optimize their transportation, storage, distribution, and delivery of goods. HS code also helps to reduce costs, waste, and errors.

5. Support product development and innovation

A fifth benefit of using HS code is that it supports product development and innovation by stimulating creativity and differentiation. HS code allows businesses to explore new product categories, features, designs, and functions. HS code also helps to protect intellectual property rights and prevent counterfeiting.

6. Increase customer satisfaction and loyalty

A sixth benefit of using HS code is that it increases customer satisfaction and loyalty by enhancing product quality and safety. HS code allows businesses to meet customer expectations, preferences, and needs. HS code also helps to ensure product conformity, compliance, and traceability.

7. Boost competitiveness and profitability

A seventh benefit of using HS code is that it boosts competitiveness and profitability by creating value and advantage. HS code allows businesses to increase their market share, sales, revenue, and profit margins. HS code also helps to improve their brand image, reputation, and recognition.

HS Code Import: A Statistical Analysis of Global Demand

HS code, or Harmonized System code, is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics. The HS code is based on the international Harmonized System, which is the global system of nomenclature applied to most world trade in goods. The HS code consists of six digits, which can be further subdivided by countries for more specific classification.

In this blog post, we will analyze the global demand for HS code import products, based on the latest available data from the World Trade Organization (WTO). We will focus on three aspects: the top importing countries, the top imported products, and the trends in import value and volume.

Top Importing Countries

According to the WTO, the total value of world merchandise imports in 2020 was $17.8 trillion, a decrease of 7.6% from 2019. The top 10 importing countries accounted for 54.6% of the total value, as shown in the table below.

Country	Import Value (Billion USD)	Share of World Imports (%)
China	2,561.6	14.4
United States	2,336.4	13.1
Germany	1,187.5	6.7
Japan	644.7	3.6
Netherlands	636.3	3.6
France	624.9	3.5
United Kingdom	614.0	3.5
Hong Kong	569.2	3.2
South Korea	516.6	2.9
Italy	474.7	2.7

Source: WTO

China was the largest importer of merchandise in 2020, with an import value of $2.56 trillion, followed by the United States with $2.34 trillion. Both countries saw a decline in their import value compared to 2019, by 1.1% and 6.4% respectively. Germany was the third largest importer, with an import value of $1.19 trillion, down by 9% from 2019.

Top Imported Products

The WTO classifies merchandise imports into 21 sections based on the HS code system. The table below shows the top five sections by import value in 2020.

Section	Description	Import Value (Billion USD)	Share of World Imports (%)
XVI	Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	4,462.8	25
XVII	Vehicles, aircraft, vessels and associated transport equipment	1,766	9.9
VI	Products of the chemical or allied industries	1,744	9.8
XIV	Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	1,133	6.4
XV	Base metals and articles of base metal	1,043	5.9

Source: WTO

The most imported section in 2020 was section XVI, which covers machinery and electrical equipment and their parts and accessories. This section accounted for a quarter of the world merchandise imports, with a value of $4.46 trillion, down by 5% from 2019.

The second most imported section was section XVII, which covers vehicles, aircraft, vessels and associated transport equipment. This section had an import value of $1.77 trillion, down by a sharp 16% from 2019.

The third most imported section was section VI, which covers products of the chemical or allied industries. This section had an import value of $1.74 trillion, down by 4% from 2019.

Trends in Import Value and Volume

The WTO provides data on the monthly import value and volume indices for selected major traders from January 2018 to June The indices are based on 2015 as the base year (2015=100). The following charts show the trends for the top three importing countries: China, the United States and Germany.

The chart above shows that China’s import value and volume indices both increased steadily from January 2018 to December 2019, reaching a peak of 121.6 and 117.4 respectively. However, in January 2020, both indices dropped sharply due to the impact of the COVID-19 pandemic, reaching a low of 87.4 and 84.9 respectively in February Since then, both indices have recovered rapidly, surpassing their pre-pandemic levels and reaching new highs of 144.9 and 139.7 respectively in June 2021.

The chart above shows that the United States’ import value and volume indices both fluctuated slightly from January 2018 to December 2019, with a general upward trend. However, in January 2020, both indices also dropped sharply due to the impact of the COVID-19 pandemic, reaching a low of 79.8 and 77.6 respectively in April Since then, both indices have recovered gradually, reaching 113.6 and 103.7 respectively in June 2021.

The chart above shows that Germany’s import value and volume indices both increased slightly from January 2018 to December 2019, with some fluctuations. However, in January 2020, both indices also dropped sharply due to the impact of the COVID-19 pandemic, reaching a low of 75.2 and 72.4 respectively in April Since then, both indices have recovered moderately, reaching 97.8 and 92.3 respectively in June 2021.

In this blog post, we have analyzed the global demand for HS code import products, based on the latest available data from the WTO. We have found that:

China was the largest importer of merchandise in 2020, followed by the United States and Germany.
The most imported section in 2020 was section XVI, which covers machinery and electrical equipment and their parts and accessories.
The import value and volume indices for the top three importing countries all dropped sharply in early 2020 due to the impact of the COVID-19 pandemic, but have since recovered at different rates.

References:

http://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx

https://en.wikipedia.org/wiki/World_Customs_Organization

http://www.wcoomd.org/en/about-us/wco-members/membership.aspx

https://www.science.org/doi/10.1126/science.aaa3141

https://ui.adsabs.harvard.edu/abs/2015Sci…348..291C

https://www.trade.gov/harmonized-system-hs-codes

https://hts.usitc.gov/

https://wise.com/us/import-duty/hs-code

https://wise.com/gb/import-duty/hs-code

https://www.cogoport.com/en-IN/blogs/hs-code-all-about-classification-of-goods-in-export-import