🌿 Licorice Extract (Gan Cao)

🌐 HS Code Classification & Customs Clearance Guide | 2026 Latest Tariff Analysis | Professional Entry Strategy
📌 I. Product Definition: What Exactly is "Licorice Extract"?

Licorice Extract is a concentrated substance derived from the roots and rhizomes of the Glycyrrhiza plant. It is widely used in food, pharmaceuticals, and cosmetics. However, in international trade, its classification is highly dependent on its chemical composition, purity, and intended end-use.

Is it a chemical derivative (Glycyrrhizin/Glycyrrhizic Acid)?
Is it a plant juice/concentrate (1302)?
Or is it a prepared food ingredient (2106)?

⚠️ Critical Distinction Point:
- If the extract is a purified chemical derivative (e.g., Glycyrrhizin ≥ 95%) → Often classified under 2938 (Glycosides).
- If it is a plant juice/concentrate used as a flavoring or basic extract → Often classified under 1302 or 2106.
- Misclassification leads to significant tariff differences (ranging from 13.7% to 21.3%).

📦 II. HS Code Classification Details (2026 Latest Tariff Authority)

Based on the provided data, here are the four primary HS Codes for Licorice Extract, along with their logical classification grounds:

🔍 Key Insight:
- 2938.90.00.00 offers the lowest tax rate (13.7%) but requires proof that the product is a glycoside derivative (high purity/chemical nature).
- 1302.12.00.00 has the highest tax rate (21.3%) and attracts additional tariffs (7.5% Section 301 + 10% IEEPA).
- The 2106 codes sit in the middle (16.4%) and are often used for food-grade extracts that don't meet the strict chemical definition of 2938 or the pure plant juice definition of 1302.

💰 III. 2026 Latest Tariff Rate Breakdown (Including Surcharges)

✅ Applicable Country: United States (US)
✅ Origin: China (CN)
✅ Effective Date: Post-November 2025 policies (Section 301 + IEEPA)

🎯 1. 2938.90.00.00 —— Glycoside Derivatives (Lowest Tax Option)

📌 Explanation:
- This is the most cost-effective classification IF the product can be legally defined as a glycoside derivative (e.g., high-purity Glycyrrhizin).
- Note: The 0% Section 301 rate is crucial here. Many other extract codes face 25% Section 301.

🎯 2. 1302.12.00.00 —— Plant Juices & Extracts (Highest Tax Option)

📌 Warning:
- This code incurs Section 301 tariffs in addition to IEEPA.
- Avoid this classification unless your product is strictly a raw plant juice/concentrate without further processing, as the tax burden is 7.6% higher than the glycoside classification.

🎯 3. 2106.90.99.xx Series —— Prepared Food Ingredients (Mid-Range)

📌 Strategy:
- These codes (.87, .98, .73) are often used for food-grade licorice extracts that are not pure glycosides but are more processed than simple plant juices.
- They benefit from 0% Section 301, making them a safe middle ground if 2938 cannot be justified.
- The slight difference between .87, .98, and .73 is based on specific use (herbal infusion vs. general food prep vs. beverage seasoning), but all share the 16.4% rate.

🛠️ IV. Customs Clearance Practical Advice (Avoid Pitfalls)

✅ 1. Required Documentation (Must-Have)

✅ 2. Declaration Strategy (Key Tips)

🔥 “Purity Defines Code, Purpose Defines Subheading!”

⚠️ Critical Warning:
- Do NOT declare high-purity glycosides under 2106 or 1302 just to avoid scrutiny; if caught, you will face back taxes + penalties.
- Do NOT declare low-purity food extracts under 2938 without proof of chemical derivation; customs will reject this as misclassification.

✅ 3. Special Considerations

🌍 V. Global Market Comparison (2026 Latest)

📌 Conclusion:
- USA is the key market with significant tariff variations.
- 2938.90.00.00 is the gold standard for cost-saving IF the product is a glycoside derivative.
- 2106 codes are the practical choice for most commercial food-grade licorice extracts.

📌 VI. Common Mistakes & Pitfalls (Lessons Learned)

❌ Mistake 1: Using 1302.12.00.00 for a purified glycoside
👉 Consequence: Pay 21.3% tax instead of 13.7%. Overpaying $7.6k per $100k shipment.

❌ Mistake 2: Using 2938.90.00.00 for a crude food extract
👉 Consequence: Customs flags for misclassification. Shipment delayed, penalties applied, potential deportation.

❌ Mistake 3: Ignoring IEEPA 10% Section 122
👉 Consequence: All three HS codes incur this 10% surcharge for Chinese origin. Factor this into all cost calculations.

❌ Mistake 4: Vague Description ("Licorice Powder")
👉 Consequence: Customs cannot determine purity/use. Leads to audits and post-entry adjustments.

✅ Correct Practice:

“Licorice Extract (Glycyrrhiza Glabra), Glycyrrhizin Content ≥ 95%, Solvent: Ethanol, For Pharmaceutical Use” → 2938.90.00.00
“Licorice Extract, Food Grade, Glycyrrhizin Content 10-20%, For Beverage Flavoring” → 2106.90.99.87

🎯 VII. Conclusion: Strategic Classification for Cost Optimization

🎯 Remember the Golden Rule:

🔹 “Chemical Purity = 2938 (13.7%)”
🔹 “Food Preparation = 2106 (16.4%)”
🔹 “Raw Plant Juice = 1302 (21.3%)”
🔹 “Always Add 10% IEEPA for China Origin”

📌 Pro Tip:

If your licorice extract is not highly purified, do NOT force 2938. Use 2106.90.99.87 or .98 as a safe, compliant alternative.
Consult a customs broker with your COA (Certificate of Analysis) before shipment to finalize the HS Code.

📣 Immediate Action:

📞 Review your Product Specification → Check Glycyrrhizin % → Choose 2938 (if >90%) or 2106 (if food grade) → Calculate CIF × 13.7% or 16.4% + Shipping.
🚀 Optimize your supply chain costs with precise classification!

✨ Professional clearance starts with accurate classification!
💼 Every percentage point of tariff affects your bottom line!