Does assembling a product in Mexico make it a product of Mexico?

Not by itself. Under 19 CFR 134.1(b), the further work added in another country has to effect a substantial transformation. For a good of a USMCA country the part 102 rules decide it instead, and they look at what happened to each foreign material.

Is there a percentage of value added that settles it?

Not in 19 CFR 134.1(b). The regulation sets the test without a percentage. For goods of USMCA countries, part 102 turns mainly on changes in tariff classification, and some of its rules add other requirements, so read the rule for the specific good.

What is substantial transformation, and does it change a product’s country of origin?

Substantial transformation is the test for whether work done in a second country makes that country the product’s country of origin. The regulation says further work or material added in another country has to effect one before that country takes over as the origin. It does not say how much work is enough.

What the regulation says

Customs defines the country of origin as the country of manufacture, production or growth of an article. For something made in one country and finished in another, 19 CFR 134.1(b) adds that the further work or material has to effect a substantial transformation before the second country counts as the origin.

That sentence sets the test. It does not give a formula for it. Whether a given process crosses the line is decided on the facts of the product, which is why two goods that look alike can come out differently.

Two rulebooks, depending on the good

For most goods, the substantial transformation test in 134.1(b) is the starting point. For a good of a USMCA country (the regulation still says "NAFTA or USMCA"), the marking rules in part 102 decide the country of origin instead.

Part 102 works differently. Under 19 CFR 102.11(a), the origin is the country where the good is wholly obtained or produced, or made only from materials of that country, or where each foreign material goes through the change in tariff classification that section 102.20 lists for that good.

Common mistakes

Assuming that the last country to touch the product is its country of origin.
Assuming that assembling or packing in a second country changes the origin on its own.
Using the USMCA tariff-shift rules for a good that is not from a USMCA country, or the general test for one that is.
Treating origin for marking and qualification for USMCA preferential duty as the same question. They are decided under different rules.

What to check

Write down what was done, in which country, to which materials. Then check whether the good is from a USMCA country, because that decides which rulebook applies. If the facts are close to the line, that is a point for a licensed broker to settle before filing.

The Tariff Calculator asks for the country of origin you declare and builds the duty stack from it. It does not decide whether your processing was a substantial transformation. That determination stays with the importer and the broker.

Legal authority

19 CFR 134.1(b), Country of origin (substantial transformation); 19 CFR part 102, rules of origin for goods of USMCA countries (102.0, 102.11, 102.20).

Related terms

USMCA Regional Value Content (RVC) — The originating-content threshold a good must meet to qualify for USMCA duty-free treatment.
HTSUS (Harmonized Tariff Schedule of the United States) — The classification system that assigns every imported good a numeric code determining its duty treatment.

To see the stacked, cited answer for a specific entry date, use the free USMCA Qualification Check.

Open the USMCA Qualification Check Tariff Calculator