What does "tariff classification" refer to?

Tariff classification refers to the process of determining the appropriate Harmonized System (HS) code for a product. This classification is essential because it directly impacts the duty rates and tariffs applied to imported and exported goods. Each HS code corresponds to specific categories of products, and these codes are used globally to facilitate international trade and ensure that the correct duties are levied according to the nature of the product.

Accurate tariff classification is crucial for compliance with customs regulations and for the effective governance of international trade, as different goods may be subject to varying rates of duty based on their classification. By correctly determining the HS code, importers and exporters can avoid potential penalties and ensure smoother processing of their goods through customs.

The other options do not correctly capture the essence of tariff classification; they focus on unrelated logistics, customs duties without specifying the classification aspect, and business agreements, which do not pertain to the shipping and handling of goods across borders.