Tariff reductions are dominating the headlines again—this time with Trump reduced many China electronics tariffs from 145% to 30%. But for electronics companies, that’s only part of the story.
If your product still qualifies as China-origin, the discount may not apply—or worse, it may be revoked later.
Customs isn’t relaxing enforcement. In fact, country of origin compliance in electronics remains one of the most critical cost and risk factors in 2025. Knowing where your product actually originates can mean the difference between a competitive margin and an unexpected penalty.
COO Still Drives Your Duty Rate
In electronics manufacturing, COO isn’t just a paperwork checkbox—it’s a legal trigger for tariffs.
According to U.S. Customs, a product’s COO is based on where substantial transformation happens. That’s where the product gains its name, character, or use.
For electronics, this transformation often occurs during:
- PCBA manufacturing
- Firmware flashing
- Module integration
If those happen in China, the product’s Country of Origin is China—even if final assembly happens elsewhere.
What the 2025 Tariff Rollback Really Means
The U.S. reduced many China electronics tariffs from 145% to 30%, but:
- Only some HTS codes are affected
- COO rules still apply
- Many components (like lithium batteries, RF modules, ICs) are still fully tariffed
If you misclassify or over-simplify your COO claim, Customs can reclassify your shipment and bill you retroactively—including penalties. Customs audits have become more frequent. Once flagged, your shipments may receive ongoing scrutiny.
Common Missteps in COO Compliance
1. Confusing final assembly with COO
Just because your product is assembled outside China doesn’t mean its COO isn’t still China. Substantial transformation is the real trigger.
2. Relying on factory claims
Suppliers may give you a COO declaration, but if you can’t back it with process evidence, it won’t hold in an audit.
3. Lacking proof of transformation
You’ll need shipping docs, firmware logs, PCBA records, and BOM traceability to support your COO position.
What Electronics Teams Should Do in 2025
- Audit your build process: Know where transformation really happens.
- Simulate COO scenarios: Model how changes in sourcing or firmware uploads affect classification.
- Build design flexibility: Avoid tying essential functions to a single country or supplier.
- Align early: Legal, engineering, and sourcing should collaborate before prototyping—not after tooling.
Why This Matters Beyond the U.S.
Trade enforcement isn’t easing elsewhere either. The EU is rolling out automated systems to validate origin, while Latin American ports are applying stricter checks under new trade frameworks. These shifts reflect a broader trend in global trade compliance that electronics brands can’t afford to ignore.
Some companies are even developing dual-COO SKUs—one for USMCA benefits (e.g. Colombia), another optimized for RCEP or CPTPP participation. Not to chase savings, but to stay agile.
Conclusion
Tariff relief looks good on paper. But if your COO doesn’t qualify, you’ll still pay. In 2025, country of origin compliance in electronics is a design decision, not just a legal one.
Build flexibility. Document transformation. And keep your options open.
Talk to us if you want to design electronics that qualify for multiple COO paths from the start.
