Why are "tariff classifications" important in customs?

Tariff classifications play a crucial role in customs as they establish the applicable duty rates and regulations for imports and exports. Each product that crosses borders is assigned a specific code within a classification system, such as the Harmonized System. This coding determines how much duty must be paid and any applicable regulations that must be adhered to based on the nature of the goods. Without accurate tariff classifications, it would be difficult to calculate the correct tariffs, which could lead to either overpayment or underpayment, regulatory non-compliance, or delays in customs processing. Understanding and correctly applying these classifications is essential for ensuring compliance with international trade laws and for managing import costs effectively.