One pro­duct, many iden­ti­ties?

Product classification is a fundamental part of international trade. Every good that crosses a border must be assigned to a category within a standardized classification system. These classifications determine which tariffs, sanctions, or other trade regulations apply to a product. Yet, the wide variety of goods traded around the world does not always fit neatly into a finite set of categories. Many products could plausibly fall under more than one classification, leaving room for interpretation by firms and customs authorities.

When different classifications are subject to different trade rules, firms may have incentives to strategically classify their products to reduce costs or avoid regulatory requirements. Such decisions can affect government revenues and undermine the intended effects of trade policies. However, little is known about how widespread strategic classification is and what drives firms to engage in it.

The research project (Re-)Classification in International Trade aims to address this gap by investigating how widespread product reclassification is and under which conditions firms make strategic classification decisions.

By examining how firms navigate product classifications, the project will provide new insights into the role of classification in international trade and its implications for trade policy design and evaluation.