What does 'Made in China' actually mean?
But then, Donald Trump was elected president for his first term. And country of origin suddenly started to matter a lot. Because in 2018, Trump put big tariffs on lots of Chinese products. And how does customs determine what is a Chinese product? Well, it's anything whose country of origin is China. That is when Maureen's phone started ringing off the hook.
So suddenly, companies were coming in and saying, well... I do do some manufacturing in China, but a lot of my parts are coming from outside of China, or I'm really only sending this thing to China for packaging or testing. Do I still have to pay duties on this as a product of China? Even though, I mean, I'm exporting it from China, but am I really making it in China?
Other companies were trying to switch up their manufacturing so their products wouldn't count as made in China anymore. They're asking Maureen, how much can I bend the definition of made in China?
If I move some or all of my manufacturing operations from China to Malaysia or China to Vietnam, how much do I have to move before the goods will no longer be considered Chinese by U.S. customs and I don't have to pay duties on Chinese products?
And whenever clients ask Maureen questions like this, which they are doing more and more these days, she has to take a deep breath, sit them down, and say, Okay, here is how we determine a product's country of origin. There's one main rule in the U.S. It is called the Substantial Transformation Test.
And it says a product gets its country of origin from the last place where it went through a substantial transformation.
A substantial transformation is processing from which the article emerges with a new name, use, or character.
Are you literally quoting this test?
I believe I am. Sounds like you've memorized it.
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