What is country of origin (substantial transformation)?

Tariffs and customs glossary · 1 primary source

The country where goods were wholly made or last substantially transformed into a new article. Origin decides which rates and additional duties apply.

Under CBP's marking rules, work done in a second country makes that country the origin only if it results in a substantial transformation: a new and different article with a distinct name, character or use. Repacking, relabelling or simple assembly usually does not change origin.

Origin is what Section 301 and other country-specific duties look at, so moving final packing to another country does not avoid them. Free trade agreements use their own, stricter origin rules (tariff shift or regional value content) to qualify for the Special rate.

Sources

19 CFR Part 134 (country of origin marking)

Related terms

Section 301 tariffsAdditional US duties imposed under Section 301 of the Trade Act of 1974 in response to a foreign country's unfair trade practices; best known for the tariffs on goods from China since 2018.
Column 1 and Column 2 ratesThe HTS lists three rate columns: Column 1 General (normal trade relations), Column 1 Special (trade agreements and programs) and Column 2 (countries without normal trade relations).

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