USMCA Rules of Origin for China Alternatives
Source from Mexico under USMCA to avoid China tariffs — but only if you meet rules of origin requirements
- USMCA Rules of Origin for China Alternatives
- Calculating Regional Value Content
- When Mexican Assembly Doesn't Qualify
USMCA Rules of Origin for China Alternatives#
USMCA provides duty-free treatment for goods meeting rules of origin: typically 75% regional value content (RVC) for autos, product-specific rules for other goods. Moving production from China to Mexico only provides USMCA benefits if sufficient value is added in North America. Simple assembly may not qualify.
Calculating Regional Value Content#
Two methods: Transaction Value (TV) = (Transaction Value - Non-Originating Materials) / Transaction Value × 100. Net Cost (NC) = (Net Cost - Non-Originating Materials) / Net Cost × 100. TV method is simpler but NC method can yield higher RVC for capital-intensive operations. Choose the method that gives you the highest qualifying percentage.
If you ship Chinese components to Mexico for simple assembly, the finished product may still be Chinese origin.
When Mexican Assembly Doesn't Qualify#
If you ship Chinese components to Mexico for simple assembly, the finished product may still be Chinese origin. USMCA requires substantial transformation or sufficient RVC. Screwdriver assembly operations — where components are merely bolted together — typically don't qualify. You need genuine manufacturing processes that add significant value.
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- Source from Mexico under USMCA to avoid China tariffs — but only if you meet rules of origin requirements
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Source from Mexico under USMCA to avoid China tariffs — but only if you meet rules of origin requirements
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