Issue link: https://iconnect007.uberflip.com/i/1546025
52 SMT007 MAGAZINE I AUGUST 2026 how much production must occur within the trade bloc for a good to "originate" there. USMCA uses two main tests, applied alterna- tively: a tariff shift test (the non-originating inputs must change classification under the Harmonized Tariff Schedule when they're transformed into the finished good), and a regional value content (RVC) test (typically 60% under the transaction value method or 50% under the net cost method). Some products require one or the other; many allow either. Article 2.10 and General Note 11(p): The IT Industry's USMCA Backstop Buried in USMCA Article 2.10 (and implemented in U.S. law as General Note 11(p) of the HTSUS) is a provision that does something unusual. For a defined list of information technology products, the goods are deemed originating simply by being imported into the United States from Mexico or Canada. No tariff shift analysis or no RVC calcula- tion is needed. The list is squarely an IT industry list. It covers auto- matic data processing machines (laptops, servers, and the like), digital processing units, input/output units, storage units, ADP-type displays and moni- tors, parts of those displays, parts of ADP machines, parts of printers and copiers, parts of LAN equip- ment, and computer power supplies. The legal effect is striking. U.S. Customs and Border Protection has confirmed in published rulings that even Chinese-origin IT goods within the enumerated categories—for example, ADP machines, processing units, storage units, computer power supplies, and LAN parts—qualify for USMCA preferential treatment under GN 11(p) when shipped to the U.S. from a Mexican facility, even where the Mexican operation consists only of sorting, picking, packing, and shipping. The goods are treated as originating because they fall within the enumerated categories and are shipped from a USMCA country, full stop. Why does this rule exist? It's a direct descendant of NAFTA Annex 308.1, which the three countries adopted in the early 1990s to harmonize their external tariffs on computer goods. The logic was that if all three NAFTA countries applied roughly the same MFN tariff to imported ADP goods, there was no risk of trade deflection, so the usual rules of origin weren't needed. When the WTO Information Technology Agreement subsequently brought MFN tariffs on those same goods to zero globally in 1997, the policy basis became even stronger. USMCA carried the rule forward in 2020 and modernized the product list. If the 2026 review tightens or narrows GN 11(p), the impact on importers of finished computers, servers, displays, and IT subassemblies will be immediate. The Standard PSRs: A Mixed Bag for Electronics Outside the GN 11(p) list, electronics products are governed by the standard PSRs under the agreement. A few patterns matter for SMT and EMS readers. Semiconductors enjoy the most permissive treat- ment. Diodes, transistors, integrated circuits, and electronic microassemblies require no change in tariff classification at all, and an explicit transit/trans- shipment exception even allows further production outside USMCA (think wafer testing or back-end packaging in Asia) so long as the further processing doesn't kick the goods into a different category. These rules are the rules-of-origin counterpart to the WTO International Technology Agreement's broader liberalization of semiconductor trade. Telecom and networking goods, such as smart- " Free trade agreements don't just lower tariffs; they also determine what counts as an 'originating' product."