GlossaryEN1 min readUpdated: Jun 24, 2026

Country of Origin / Substantial Transformation (U.S. origin determination)

As of June 2026.

Quick Answer

Last updated: 24 June 2026

Source: US CBP Rules of Origin / CROSS Rulings (cbp.gov); trade.gov „Rules of Origin – Substantial Transformation"; Anheuser-Busch Brewing Assn. v. United States, 207 U.S. 556 (1908); 19 U.S.C. § 1304; 19 CFR Part 102; White House „Further Modifying the Reciprocal Tariff Rates" (31.07.2025, 40 % Transshipment-Strafzoll); CNBC (01.08.2025), Snell & Wilmer, Paul Weiss (Transshipment-Enforcement); US Supreme Court, Learning Resources, Inc. v. Trump (20.02.2026, IEEPA). Stand: Juni 2026.

Category

Incoterms 2020 Simulator: Who bears costs & risk?

Reading time

1 min

Words

210

Mentioned in

–

Definition & Explanation

As of June 2026. Under U.S. customs law, a good's country of origin determines which country-specific tariff rate applies — and with the widely diverging rates in force since 2025 (reciprocal tariffs, Section 232 sector tariffs), this is often the costliest variable in the whole calculation. What counts is not the country of shipment or transshipment, but the place where the good last underwent a substantial transformation. This non-preferential origin test asks whether a new article of commerce has emerged with its own name, character and use; the legal foundations are the landmark ruling Anheuser-Busch Brewing Assn. v. United States (1908), the marking statute 19 U.S.C. § 1304 and 19 CFR Part 102. U.S. Customs and Border Protection (CBP) decides case by case (CROSS rulings). Mere repackaging or relabeling does not suffice; routing goods through a third country to disguise their true origin is illegal transshipment. The reciprocal-tariff proclamation of 31 July 2025 made such circumvention subject to an additional 40 percent penalty duty with no remission; after the Supreme Court's IEEPA ruling (20 February 2026), the legal basis of that regime is in flux. Not to be confused with preferential rules of origin (e.g. the USMCA tariff shift) or tariff engineering. Related: Section 232, reciprocal tariffs, HTS, additional duty.

Next steps

Tools that match this term

Compare IncotermsClarify duties, cost and riskOpen Find HS codeDetermine the tariff number for customsOpen Calculate customs valueWork out import duties and customs valueOpen

Related Terms

You might also be interested in these terms

Origin master data

When a freight forwarder or exporter calls up a supplier record in their ERP, origin master data delivers the relevant customs att…

Learn more

Automated Origin Verification

Demonstrating valid preferential origin is one of the most demanding compliance tasks in international trade, and automated origin…

Learn more

Origin management

Origin management is the structured process by which importers, exporters, and freight forwarders establish, document, and substan…

Learn more

Origin documentation

Unlike a single origin certificate, origin documentation refers to the full set of records that collectively prove a good's geogra…

Learn more

origin determination

Origin determination is the formal customs assessment of the country in which a good was manufactured or acquired its economic ori…

Learn more

Certificate of Origin Error

Unlike a minor clerical mistake that can often be corrected on request, a substantive certificate of origin error can void an enti…

Learn more

⚖️ ICC Incoterms 2020

Incoterms 2020 Simulator: Who bears costs & risk?

Analyze all 11 Incoterms 2020: cost matrix, risk timeline, insurance gap detector and customs responsibility – free, no login required.

Incoterms Simulator →

Logistics knowledge straight to your inbox

Weekly: Top news, industry facts and insights from the world of logistics – free.

Country of Origin / Substantial Transformation (U.S. origin determination)

Next steps

Related Terms

Origin master data

Automated Origin Verification

Origin management

Origin documentation

origin determination

Certificate of Origin Error

Incoterms 2020 Simulator: Who bears costs & risk?

Logistics knowledge straight to your inbox

Community Questions & Answers