Navigating U.S. country of origin rules: substantial transformation & essential character explained

Heather Sanborn, International Trade Attorney at Crowell & Moring LLP, gives a US-focused briefing on how US Customs and Border Protection (CBP) determines non-preferential country of origin — essential viewing for customs and trade compliance professionals reassessing supply chains as companies look to move production out of China.

Topics covered:

• The basic US country-of-origin test: country of manufacture, production, or growth, and the substantial transformation test applied when two or more countries are involved
• How CBP assesses substantial transformation (change in name, character, and use) and why simple assembly does not meet that threshold
• Findings from a review of 53 recent CBP country-of-origin opinions, including how often simple vs. complex assembly and essential character were discussed
• A case study on an engine assembled in the EU with one Chinese-origin core component (the "long block"), contrasted with CBP's essential-character approach for marine motors, electric engines, and a value-percentage test used for a snow thrower
• A case study on Spanish-made pipes and fittings, where CBP attributed essential character to lower-value Chinese-origin fittings rather than the higher-value Spanish pipes
• A case study on elevators assembled in Mexico from over 200 Chinese-origin parts, subject to US anti-dumping duty, and why extensive assembly, welding and testing did not amount to substantial transformation
• The subjectivity and inconsistency of current CBP guidance on essential character and substantial transformation

For a broader overview of the topic, please watch the full recording. The slides are available in the Resources section.

Please note that this summary was generated using AI, based on the recording and available slides.