1. The product
Machinery for the destination’s tariff line.
2. The three rule types that apply to machinery
Tariff change
The default for most machinery headings.
Components in different headings from the finished machine satisfy the rule.
Regional value content
For machines with significant imported content, or where the product-specific rule specifies it.
Specific process
For certain categories.
3. Why machinery often qualifies easily
Because the finished machine occupies a heading that none of its components occupy.
A machine tool is classified as a machine tool. Its motors, controllers and frames are classified elsewhere. The tariff change rule is met.
4. Where it fails
The assembled article problem
Where the components are themselves classified as the finished article, unassembled.
High imported content
Where the value test applies and the imported share is high.
The accessory question
Accessories and attachments may or may not follow the machine.
5. The data needed
For the tariff change test: the HS code of each component and of the finished machine.
For the value test: the value of originating and non-originating materials, calculated on the basis the rule specifies.
6. A scenario
A manufacturer of food processing machinery qualified under the tariff change rule for all its export markets.
A new product line incorporated a complete imported processing unit that was itself classified in the same heading as the finished machine.
The tariff change rule failed for that line, and the value test applied instead.
The manufacturer had never tracked the value breakdown, because it had never needed to.
7. What to build
The bill of materials with codes and values, maintained once and used for every agreement.
8. Closing view
Machinery origin is usually easy and occasionally not.
The bill of materials tells you which.
*This article is based on the product-specific rules of RCEP and China’s bilateral free trade agreements.*