HTSUS Reporting Sequence: Why the August 7 Reciprocal Tariff Changes Matter to Your Bottom Line

On August 7, 2025, a fresh round of reciprocal tariff updates took effect under Executive Order 14257, as amended, and they bring with them more than just new duty rates. For importers, brokers, and compliance teams, the real story is in how the Harmonized Tariff Schedule of the United States (HTSUS) reporting sequence will be applied — and the economic consequences of getting it wrong.

The revised rules mean that goods from certain countries, depending on their classification, will now trigger additional duties under HTSUS headings ranging from 9903.02.02 to 9903.02.71. While the duty percentages are important, the far greater operational challenge will be ensuring that each applicable duty is properly associated with the correct HTSUS line in your entry summary. Misaligned reporting in the Automated Commercial Environment (ACE) — or even on a printed CBP Form 7501 — could lead to miscalculations, delays, and potentially costly corrections.

REPORTING SEQUENCE

For reporting, CBP requires that the correct duty be associated with the correct HTSUS code. Duties across multiple HTSUS numbers should never be combined within a single line. If an entry is subject to, for example, heading 9903.01.25 for a 10% duty, that 10% must be tied directly to that heading alone. For entries that involve U.S. content exemptions under heading 9903.01.34, the reporting process gets even more complex — the entry must be split into two separate lines: one for the U.S. content, another for the non-U.S. content, with duties assessed only on the latter.

CBP guidance prescribes the following sequence:

1. Chapter 98 number (if applicable)

2. Chapter 99 number(s) for additional duties (if applicable)

3. For trade remedies, if applicable

• first report the Chapter 99 number for Section 301,
• followed by the Chapter 99 number for IEEPA Fentanyl,
• followed by the Chapter 99 number for IEEPA Reciprocal,
• followed by the Chapter 99 number for Section 232 or 201 duties,
• followed by the Chapter 99 number for Section 201 or 232 quota

4. Chapter 99 number(s) for REPLACEMENT duty or other use, e.g., MTB or other provisions (if applicable)

5. Chapter 99 number for other quota (not covered by #3) (if applicable)

6. Chapter 1 to 97 number for the commodity tariff

This precision has real financial implications. Improperly sequencing your HTSUS numbers could lead to paying more duty than required — or underpaying and triggering penalties. In either case, errors can ripple through your supply chain and affect landed costs, pricing decisions, and cash flow forecasts.

OTHER GUIDANCE FROM CBP

Beyond the reporting mechanics, there’s a wider economic layer. The updates carve out specific exemptions to the Reciprocal Tariff — from Canadian and Mexican goods under the USMCA, to certain humanitarian donations, to semi-finished copper and derivative copper products subject to Section 232 actions. This selective tariff landscape means importers will need to carefully model cost scenarios for each sourcing country and commodity type. Misclassifying derivative products could mean absorbing unexpected tariff costs or missing legitimate exemptions.

Finally, there’s the heightened penalty for transshipment violations — a 40% additional duty on top of other applicable duties. That’s not just a compliance risk; it’s a potential profit-margin killer, especially for high-value commodities.

CONCLUSION

With so many moving pieces, the August 7 changes aren’t just a regulatory update — they’re a reminder that tariff reporting is as much about strategic cost control as it is about customs compliance. Importers who treat HTSUS sequencing as a back-office chore may find themselves paying for it — literally.

As new tariff regulations continue to evolve, navigating these changes requires experienced legal counsel. At Liang + Mooney, PLLC, our seasoned tariff lawyers can answer your questions and concerns with sophisticated legal solutions.  If you seek strategic counsel and insight into which tariffs apply to your operations, we invite you to contact us to schedule a consultation.