How AI accelerates product classification in a volatile tariff environment
There have been numerous reports about situations where a misclassified HS code has triggered millions of dollars in customs penalties and significant supply chain delays for major importers. Your products face the same risk.
Navigating tax codes across multiple jurisdictions is already complex. Now add volatile tariffs, reciprocal trade policies, and daily regulatory changes. Classification has become a high-stakes operation where a single error cascades into substantial fines, shipment rejections, and lengthy refund battles.
With tariff rates shifting weekly, you can’t afford manual processes that lag behind regulatory change. Customs authorities impose penalties for misclassifications that go far beyond inaccurate duty calculations. Shipments get rejected during import or export. Refund processes drag on for months, even when you’ve overpaid. In certain countries, authorities confiscate goods. Underpaying duties brings penalties and interest. Overpaying means fighting an uphill battle to recover your money.
These complications create financial burdens and supply chain disruptions you need to eliminate.
You need a smarter approach—one that maps requirements across countries and delivers precise codes at the speed of trade.
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The challenge: Classification complexity accelerates faster than your processes
How AI transforms your product classification process for global trade
Real results: How leading companies cut classification time by 50%
Strategic value beyond compliance: FTA qualification and duty optimization
The future: Generative AI for sophisticated code recommendations
You stay in control—AI amplifies your product classification expertise
Take the next step toward AI-powered classification
The challenge: Classification complexity accelerates faster than your processes
Product classification assigns a specific code based on material composition, function, and use. What sounds straightforward has become monumental.
Here’s your current reality: According to the Thomson Reuters Institute’s 2026 Global Trade Report, 72% of trade professionals cite U.S. tariff volatility as the most impactful regulatory and customs systems change. A slight nuance in product description leads to vastly different classifications—and consequently, different tax rates that could cost you six figures.
The urgency is clear: more than two-thirds (68%) of global trade professionals say that supply chain management is their top strategic priority. The pace of change is staggering. Thomson Reuters maintains a global network of 200+ analysts who monitor and update tariff data across 220+ countries, delivering tens of millions of updates to global trade content annually. What was compliant yesterday may trigger an audit today.
You’re operating across borders, classifying products for multiple jurisdictions—each with their own codes, regulations, and tariffs. In the U.S. alone, you navigate three different industry classification systems: the North American Industry Classification System (NAICS), the Standard International Trade Classification (SITC), and the Harmonized System (HS). While the HS provides standardized international methodology, country-specific elements add layers of complexity you must navigate correctly.
Manually sifting through constantly updated tax codes is time-consuming, repetitive, and prone to costly errors. While you’re checking codes manually, regulations are changing beneath you.
How AI transforms your product classification process for global trade
What if you could classify hundreds of products in minutes instead of days—with greater accuracy than manual review? Modern AI delivers exactly this.
AI solutions don’t just speed up code selection. They provide confidence that your classifications remain accurate as regulations evolve. In fact, 40% of trade professionals are now exploring AI or blockchain technology to better manage their global trade functions—a dramatic shift from previous years. Here’s how the technology works for you:
Classify hundreds of records in minutes, not days
Machine learning algorithms analyze patterns across hundreds of jurisdictions, learning from vast datasets of product information and tax codes. The system provides instant, confidence-ranked code recommendations for new products while continuously adapting to regulatory changes.
ONESOURCE Global Classification AI technology leverages this capability to transform what used to take your team days or weeks into a streamlined process completed in minutes.
Stop wrestling with technical jargon and abbreviations
Tax codes and product descriptions contain technical jargon, abbreviations, and complex specifications that slow your team down. Natural Language Processing (NLP) technology interprets the nuances of tax language and product specifications, delivering precise classifications that account for subtle but critical differences between product categories.
This capability proves especially valuable when you’re dealing with inconsistent product descriptions across multiple systems or trying to recognize abbreviated terms that confound traditional search engines.
Stay current without manual monitoring
While static rule-based systems become outdated the moment regulations change, modern AI continuously learns from new data, regulatory updates, and classification decisions. The system becomes more accurate over time and stays current with the millions of regulatory changes happening each year across global jurisdictions.
Configurable machine learning incorporates a feedback mechanism that refines and improves predictions based on your team’s decisions and actual usage patterns. The AI adapts to how you work.
Real results: How leading companies cut classification time by 50%
Georgia-Pacific reduced time spent on product classification by 50% using AI-powered solutions. Your team can achieve similar results.
When you’re not tied up performing mundane manual tasks, you have more time to focus on critical strategic work: tariff engineering, trade agreement optimization, and supply chain analysis that directly impacts your bottom line.
Accuracy improves dramatically because AI collates data from business documents and other sources in real-time, analyzing it at a volume and speed impossible for humans. The technology catches subtle differences in tax codes that could mean the difference between significant duty savings or costly overpayments.
Here’s what you gain:
Reduce compliance risk: Maintain consistent classification practices across different jurisdictions, with built-in audit trails and automatically generated rationales showing exactly how you made each classification decision. When auditors come calling, you’re ready.
Cut costs immediately: Minimize errors and penalties while identifying duty-saving opportunities through Free Trade Agreement (FTA) qualifications and duty deferral programs that significantly reduce your total landed costs.
Gain strategic insight: Run what-if scenario modeling for tariff engineering in minutes. Compare different product designs, sourcing options, or manufacturing locations to optimize duty costs and evaluate supply chain redesign opportunities before you commit resources.
Respond to change in real-time: Get immediate visibility into how regulatory updates impact your product portfolio through automated handling of expired, split, and reclassified HS codes. No more discovering compliance gaps weeks after regulations change.
Connect your entire workflow: Modern AI solutions integrate directly with major ERP systems like SAP and Oracle, creating a unified workflow that connects product development, procurement, sales, and compliance teams. Everyone works from the same trusted, AI-enhanced classification data.
Strategic value beyond compliance: FTA qualification and duty optimization
Accurate classification keeps you compliant. Strategic classification saves you money.
Forward-thinking organizations leverage AI to unlock competitive advantages that go far beyond avoiding penalties:
Maximize FTA benefits: AI identifies products that may qualify for preferential duty treatment under various free trade agreements. You can structure your supply chain and sourcing strategies to maximize these benefits, reducing duty costs by structuring your operations strategically.
Defer duty payments strategically: By analyzing classification patterns and regulatory frameworks, AI helps you identify opportunities to defer duty payments through programs like foreign trade zones or bonded warehouses. This improves your cash flow and working capital position.
Evaluate classification alternatives: AI provides multiple classification suggestions with detailed rationales and confidence scores. You can evaluate different classification strategies to achieve favorable tariff treatments and maximize duty savings while maintaining full compliance. The system shows you options you might never have considered.
Transform supply chain decisions: AI-powered “what-if” scenario modeling enables you to evaluate the total cost implications of different sourcing decisions, manufacturing locations, or product specifications. You can design a more resilient and cost-effective global supply chain with data-driven confidence.
The future: Generative AI for sophisticated code recommendations
As AI technology advances, its power grows. Generative AI is already being deployed for sophisticated code recommendations, where AI models generate the most appropriate tax code based on product descriptions, visual analysis, and relevant regulations across multiple jurisdictions simultaneously.
The technology supports continuous learning and adaptation, ensuring AI models remain accurate and relevant despite changing regulations and volatile tariff policies. Modern solutions like ONESOURCE Global Classification AI integrate seamlessly with your existing enterprise systems, creating a unified workflow backed by 220+ countries of easily accessible research content.
Your classification process becomes faster, smarter, and more strategic with every use.
You stay in control—AI amplifies your product classification expertise
AI accelerates classification. You make the strategic calls that protect your business.
Technology augments rather than replaces your expertise. You remain crucial in this partnership, bringing judgment and strategic thinking that no algorithm can replicate.
You need to understand how AI works so you can validate recommendations, adjust confidence thresholds based on your organization’s risk tolerance, and intervene when complex legal or business considerations require human judgment. While AI supports product classification and identifies optimization opportunities, you leverage your expertise to develop comprehensive tax strategies, negotiate with customs authorities, and make final decisions on classifications that carry significant financial or compliance implications.
The partnership delivers results neither could achieve alone. AI handles the volume and speed. You bring the context and strategic vision. Together, you navigate volatile tariffs and rapid regulatory change with confidence.
Ultimately, AI increases your job satisfaction by eliminating tedious tasks and augmenting your professional capabilities. As AI technology continues to evolve, this partnership will become even more powerful and valuable for organizations navigating the complexities of global trade.
Take the next step toward AI-powered classification
Ready to see how AI transforms your product classification process?
Explore our interactive infographic to discover how ONESOURCE Global Classification AI technology is revolutionizing harmonized system product classification.
Learn more about ONESOURCE Global Classification AI and how it can help your organization master product classification in today’s complex tariff environment.
