USMCA Rules of Origin: How Products Qualify for Duty-Free
Complete guide to USMCA rules of origin. Learn how products qualify for duty-free treatment through Regional Value Content, tariff shifts, and product-specific rules.
What Are USMCA Rules of Origin?
Rules of origin determine whether a product qualifies for preferential (duty-free) treatment under USMCA. A product must be "originating" to receive benefits.
The three main qualification methods:
Most manufactured goods qualify through RVC or a combination of tariff shift + RVC.
Regional Value Content (RVC) Explained
RVC measures what percentage of a product's value originates from USMCA countries.
Two calculation methods:
Transaction Value Method:
RVC = ((Transaction Value - Non-Originating Materials) / Transaction Value) × 100
Net Cost Method:
RVC = ((Net Cost - Non-Originating Materials) / Net Cost) × 100
Example: A product sells for $100, with $30 in non-originating materials.
If the threshold is 65%, this product qualifies.
RVC Thresholds by Industry
Different products have different RVC thresholds:
| Industry | RVC Threshold |
| ---------- | --------------- |
| Agriculture & Food | 50% |
| Textiles & Apparel | 55% |
| Furniture | 55% |
| Consumer Goods | 55% |
| Machinery | 60% |
| Chemicals | 62% |
| Electronics | 65% |
| Medical Devices | 65% |
| Aerospace | 65% |
| Automotive | 75% |
Higher thresholds require more regional content to qualify.
Tariff Shift Rules
Tariff shift (or "tariff classification change") requires non-originating materials to change HS codes during production:
Types of tariff shifts:
Example: Raw cotton (HS 5201) is woven into fabric (HS 5208) - this is a CC change at the heading level.
Product-specific rules in USMCA Annex 4-B specify which shifts apply to each product.
De Minimis Rule
The de minimis rule allows a product to qualify even with some non-originating materials that don't meet tariff shift requirements:
Standard de minimis: Up to 10% of transaction value can be non-originating materials that don't undergo the required tariff shift.
This helps when:
Note: De minimis rules are stricter for textiles and some other products.
How to Determine if Your Product Qualifies
Step-by-step qualification process:
Our platform automates steps 1-6 based on the information you provide.
Related Industry Guides
See how these tariff rules apply to specific industries:
Frequently Asked Questions
Q: Can I use both tariff shift and RVC to qualify?
Yes, many product-specific rules require BOTH a tariff shift AND meeting an RVC threshold. Check the specific rule for your HS code.
Q: What if my product uses materials from China?
China-origin materials are "non-originating" for RVC purposes. However, if you add enough regional value through manufacturing, labor, and other USMCA-origin inputs, your finished product can still qualify.
Q: Do I need to track every component?
Yes, accurate origin determination requires tracking all materials. For complex products, focus on high-value components first as they have the biggest RVC impact.