What Counts as a U.S. or Chinese Good in the 2025 Tariff War?

With both the U.S. and China imposing sweeping tariffs in April 2025, determining a product’s true country of origin has become one of the most urgent—and complex—questions for logistics professionals. For freight forwarders, customs brokers, and compliance teams, these definitions aren’t just technicalities: they affect everything from tariff exposure to shipment routing and client documentation.

This post outlines how each country defines goods as “Chinese” or “American” under their respective tariff rules, along with documentation requirements, edge cases, and practical considerations for LSPs navigating these changes.

Disclaimer: The information provided is for general reference only. For tariff classification or customs compliance, consult a licensed trade attorney or customs broker.

U.S. Classification of “Chinese Goods”

The U.S. Customs and Border Protection (CBP) applies the “substantial transformation” test to determine whether a product is of Chinese origin. This legal standard considers whether the product has undergone a fundamental change in name, character, or use during processing or assembly in China.

Importantly, goods from Hong Kong and Macau are classified as Chinese under current U.S. regulations.

Scope of Tariffs

The U.S. 2025 reciprocal tariff scheme (10% base plus country-specific add-ons) applies to nearly all HTSUS-classified goods originating from China — unless clearly exempt.

Common Exemptions

Pharmaceuticals
Semiconductors
Copper articles & bullion
Steel/aluminum already covered under Section 232
Goods shipped before cutoff dates, depending on product and HTS code
Chapter 98 goods (e.g., repairs or alterations performed abroad)

Products assembled elsewhere using Chinese components may still be deemed Chinese if they do not meet the transformation threshold — a key nuance for LSPs coordinating multi-country supply chains.

China’s Definition of “U.S. Goods”

China’s retaliatory 34% tariff applies to all goods originating from the United States, effective April 10, 2025. Like the U.S., China uses a substantial transformation principle to determine origin, but enforcement and exemptions may vary.

Goods made in U.S. territories or significantly processed in the U.S. are treated as U.S. goods for tariff purposes. This includes not only final goods, but also components and sub-assemblies integrated into larger products.

Covered Goods: Agricultural products (soybeans, sorghum), energy (LNG, crude oil), electronics, aircraft parts, vehicles.
Exemptions: Limited — focused on humanitarian aid and essential medical goods.
Special Case: Rare earth exports to China may be exempted due to domestic demand.

Freight forwarders handling U.S.-origin shipments into China should expect full tariff exposure unless the goods meet China’s limited exemptions. For mixed-origin cargo or high-tech products, confirming transformation thresholds is critical.

Key Edge Cases for Logistics Teams

Tariff origin rules may sound legalistic—but they play out in very real ways on the ground. Here are examples that highlight where logistics service providers (LSPs) should pay close attention:

Case: Assembly in Vietnam using Chinese circuit boards
If only simple assembly occurs, the product may still be considered Chinese. If complex operations (e.g. programming, integration) are performed, it could qualify as Vietnamese-origin. Manufacturing declarations are essential.
Case: Relabeling after substantial transformation
Goods processed in Mexico that still say “Made in China” must be correctly relabeled before export or face customs penalties. Origin marking matters.
Case: Shipping under DDP terms
If the seller handles customs and duties (Delivered Duty Paid), they’re also responsible for proper HS code and origin documentation. Ensure internal alignment between logistics and compliance teams.

These aren’t hypothetical. In 2025’s environment of heightened trade scrutiny, missteps on country-of-origin documentation can delay shipments, trigger fines, or even cause seizure at the border.

Essential Documentation for Substantial Transformation Claims

For freight forwarders, customs brokers, and logistics managers, proving a product’s origin isn’t just paperwork — it’s a core part of tariff compliance. Below are the most critical documents required when claiming substantial transformation.

Certificate of Origin (CoO): Official document indicating the country of origin. It must reflect the final production site after transformation.
Manufacturing Declaration: Supplier- or manufacturer-issued document explaining what processing was done, value added, and origin of components.
Bill of Materials (BOM): Used to evaluate if regional value content or component thresholds are met.
Proof of Origin: Invoices, purchase orders, and supplier declarations that support the transformation process and sourcing details.
Customs Declaration: Updated with accurate HS codes and final origin — must match physical labeling and documents.

Some platforms, such as TRADLINX, help centralize shipment documents alongside real-time tracking and visibility. Features like integrated notes and document upload help reduce confusion and improve audit readiness — especially during disputes or inspections.

Documentation Pitfalls LSPs Should Watch For

Even experienced LSPs can run into trouble when documentation and real-world operations fall out of sync. Here are common mistakes and how to avoid them:

Inconsistent Documentation: If the CoO says “Vietnam” but the BOM shows 90% Chinese components, that’s a red flag for customs.
Failure to Update Labels: Requiring origin corrections post-arrival can delay clearance or trigger penalties under U.S. CBP rules (19 CFR §134).
Assuming Simplicity Equals Compliance: Basic assembly or relabeling rarely qualifies as substantial transformation. Always verify based on transformation criteria.

Best practice: conduct an internal origin audit on high-risk shipments and ensure your client teams know what constitutes sufficient documentation — especially under DDP, bonded, or FTA terms.

Common Questions About Origin & Tariff Rules (2025)

What makes a product “Chinese” under the 2025 U.S. tariff rules?

The U.S. applies the “substantial transformation” test. If a product underwent a major transformation in China — changing its name, use, or character — it’s considered Chinese-origin, even if parts came from elsewhere. This also includes goods from Hong Kong and Macau under current U.S. policy.

What documentation is required to prove a product’s origin?

You’ll need a valid Certificate of Origin (CoO), manufacturing declarations, bills of materials, and customs declarations. Consistency across these documents is key to avoid delays or penalties.

Does relabeling goods change their origin?

No. Labels must reflect the true country of origin as determined by the manufacturing process. Mislabeling can result in seizure or fines.

Who is responsible for tariff classification when using DDP terms?

Under Delivered Duty Paid (DDP), the seller is responsible for tariff classification, duties, and compliance. Buyers should confirm these responsibilities are met before accepting goods.

What happens if a product’s HS code changes after processing?

A change in HS code due to manufacturing can indicate substantial transformation, but it must be supported by documentation. Customs authorities review these on a case-by-case basis.