Many US buyers are moving orders out of China and into Vietnam, Thailand, or Malaysia. A common message from a new supplier sounds like this: "We assemble it here, so it can be marked Made in Vietnam." That may or may not be true. US Customs and Border Protection (CBP) doesn't decide country of origin by where the last step happened. It looks at where the product actually became a new article. Country of origin is the country where goods were manufactured, produced, or grown, and when production crosses borders, the answer turns on where a "substantial transformation" took place.
Quick look
- Country of origin affects which duty rates apply, how the goods must be marked, and whether certain programs or exclusions are available.
- Work done in a second country changes the origin only if it is a substantial transformation, meaning the article comes out with a new name, character, or use.
- Repackaging, relabeling, and simple assembly generally do not change the origin.
- Goods not marked with their country of origin can face an additional 10% duty.
- Misstating origin on an entry can lead to civil penalties, and the responsibility sits with the importer of record, not the supplier.
Why Country of Origin Matters More Than You Think
Two shipments of the same product, classified under the same tariff code, can owe very different duties depending on the country of origin. Origin also decides what the "Made in" marking must say, and whether a product qualifies for certain trade programs or exclusions. US duty rates by country have changed several times since 2025, which is why we don't quote specific rates here. The rates move, but the question underneath them stays the same: which country does CBP consider the origin?
How the Rules Define Country of Origin
Under 19 CFR 134.1(b), the country of origin is "the country of manufacture, production, or growth" of an imported article. If further work or material is added in another country, that work must effect a substantial transformation before the second country becomes the origin.
Courts and CBP describe a substantial transformation as a process after which the article emerges with a new name, character, or use, different from what it had before processing. When components from several countries are assembled into a finished product, CBP decides case by case. It looks at where the components came from, how much processing happens in each country, the design and development work involved, and the skill the manufacturing requires. No single factor settles the question, and minimal assembly generally does not result in a substantial transformation.
Three Situations Worth a Second Look
Finished goods, new packaging. A product is made in China, shipped to a third country, then repacked and relabeled there. The processing is minimal, and the origin generally does not change.
Imported parts, simple assembly. Most components come from China, and the third-country plant screws or snaps them together. This often falls short of a substantial transformation, but CBP looks at the specific facts.
Real manufacturing. A third-country factory turns raw materials or parts into a product with a different name and function, using meaningful processing and skilled labor. This is where a new origin becomes more likely, though it is still a case-by-case determination.
If your supplier's story sounds more like the first or second situation, treat a "Made in" claim for the new country as a question to check, not a settled fact.
Marking Rules: What the "Made in" Label Must Say
Imported goods generally must be marked in English with their country of origin, so the ultimate purchaser in the US, usually the last person who receives the article in the form it was imported, can see where it was made. Under 19 CFR 134.2, articles not marked as required are subject to an additional 10% duty, unless they are exported or destroyed under CBP supervision before the entry is liquidated.
A wrong marking and a wrong origin declaration are two separate problems. A carton printed "Made in Vietnam" does not make the goods Vietnamese if the processing there wasn't a substantial transformation.
What Transshipment Can Cost an Importer
Transshipment, in this context, means routing goods through a third country and relabeling them to hide their true origin, usually to reach a lower duty rate. When it shows up on a US entry, the consequences fall on the importer of record.
Civil penalties. Under 19 U.S.C. 1592, false statements or omissions on an entry can be penalized based on the level of culpability. According to 19 CFR 162.73, the maximum for fraud is the domestic value of the merchandise. For gross negligence, it is the lesser of the domestic value or four times the loss of duties, taxes, and fees. For negligence, it is the lesser of the domestic value or two times that loss.
Prior disclosure. An importer who reports the error to CBP before an investigation begins faces much lower maximums. For negligent or grossly negligent violations, the maximum drops to the interest on the unpaid duties.
EAPA investigations. When the duties being avoided are antidumping or countervailing duties, interested parties such as US competitors can file an allegation with CBP under the Enforce and Protect Act (EAPA), signed into law in February 2016.
Even when a supplier suggested the relabeling, the importer who filed the entry is the one CBP holds responsible.
Four Things to Do Before You Place the Order
- Ask the supplier directly. Where do the main components come from, and what processing actually happens in your factory?
- Look for evidence of production, not just a certificate. Factory photos, a process description, and raw material purchase records tell you more than a certificate of origin on its own. Our guide on how to verify a supplier before you wire a deposit covers how to check what a factory actually does.
- Ask CBP before you import. Under 19 CFR 177.1, importers can request a written ruling on prospective transactions, meaning shipments that haven't arrived or been entered yet.
- Bring in a licensed customs broker or trade attorney when the origin is unclear, rather than declaring it on the supplier's word.
Common questions from importers
My supplier gave me a certificate of origin. Doesn't that settle it?
A certificate is a document. CBP's question is where the substantial transformation actually happened. If the paperwork and the production don't match, the importer is still responsible.
Can goods be marked with a third country's name after repackaging there?
Generally not. Repackaging and relabeling are minimal operations that usually don't change the country of origin.
Is there a way to get a clear answer before importing?
Yes. You can ask CBP for a binding ruling in writing before the goods are shipped or entered.
What if I think a past entry declared the wrong origin?
Prior disclosure, made before CBP starts an investigation, sharply lowers the maximum penalty. Talk to a licensed customs broker or trade attorney about how to handle it.
If you are moving production to a new country and want to understand what's happening on the factory floor, get in touch with our team .
Further reading
- How to Verify a Supplier Before You Wire a Deposit
- The Real Landed Cost of a Shipment: What Sits Behind Freight
- Continuous Bond vs. Single Entry Bond: Which Do You Need?
This article is general information, not legal advice. Sources: 19 CFR 134.1, 134.2, 162.73, and 177.1 (eCFR, current text); Federal Register Vol. 89, No. 127, p. 54846 (July 2, 2024); CBP EAPA program page. Checked October 1, 2026.