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Editor’s note: Tariff Terminal is a series exploring how trade policy, tariffs, and customs developments impact the electronics manufacturing industry. This is the second of a two-part look at the USMCA review.
In my first article on the USMCA, I explained why the USMCA six-year review matters to the electronics industry and where the negotiations currently stand. Now I want to get under the hood, because the most consequential changes for electronics manufacturers are in the rules of origin, the technical framework that determines whether your product gets duty-free treatment under USMCA.
Rules of Origin 101
Free trade agreements don't just lower tariffs; they also determine what counts as an “originating” product. Without rules of origin, an importer could potentially route non-qualifying goods through an FTA country, change the label, and claim duty-free treatment. So, every FTA contains product-specific rules (PSRs) that define how much production must occur within the trade bloc for a good to “originate” there.
USMCA uses two main tests, applied alternatively: a tariff shift test (the non-originating inputs must change classification under the Harmonized Tariff Schedule when they’re transformed into the finished good), and a regional value content (RVC) test (typically 60% under the transaction value method or 50% under the net cost method). Some products require one or the other; many allow either.
Article 2.10 and General Note 11(p): The IT Industry's USMCA Backstop
Buried in USMCA Article 2.10 (and implemented in U.S. law as General Note 11(p) of the HTSUS) is a provision that does something unusual. For a defined list of information technology products, the goods are deemed originating simply by being imported into the United States from Mexico or Canada. No tariff shift analysis or no RVC calculation is needed.
To continue reading this article, which appeared in the August 2026 SMT007 Magazine, click here.
