Issue link: https://iconnect007.uberflip.com/i/1546025
54 SMT007 MAGAZINE I AUGUST 2026 phones, switches, routers, and base stations, gener- ally require a subheading-level tariff shift. That's achievable through real PCB assembly and integra- tion in North America, but not through repackaging or light-touch finishing. Insulated wire and cable harnesses carry an unusual rule that excludes copper and aluminum wire inputs from the upstream raw metal catego- ries. For harness makers sourcing copper conduc- tors from Asia, this matters. Transformers and power-supply parts became materially harder to originate as of July 1, 2025. The rules for finished transformers and their parts were tightened to exclude inputs from certain steel categories, and the RVC threshold jumped from 60%/50% to 65%/55%. This was scheduled into USMCA from the start (a hint at where the negotia- tors see strategic value), and it is now stacking on top of the new Section 232 metals tariffs covered in my first installment. What To Watch Out For The U.S. negotiating priorities suggest several possible directions: • Higher RVC thresholds in strategic elec- tronics sectors. Power conversion, magnet- ics, and certain finished IT products are ob- vious candidates given the administration's "U.S. content" framing. • A new U.S. content requirement layered onto RVC. This would be a sharp depar- ture from how USMCA currently treats U.S., Mexican, and Canadian content as inter- changeable. • Narrowing or conditioning GN 11(p). If the goal is to stop Asian goods from using Mex- ico as a "side door," the deemed-originating rule for finished IT products is an obvious target. Tightening it would force import- ers back into the standard PSRs, which is a much harder bar. • Tighter material origin rules for steel and aluminum inputs. Building on the 2025 changes to the transformer and power- supply rules, "melt-and-pour" and "smelt- and-cast" requirements for raw metal inputs could creep into electronics-relevant PSRs. • Changes to Mexico's IMMEX, PROSEC, and Rule 8 programs. These programs are how most U.S.-owned maquiladoras bring non-originating components into Mexico at reduced or suspended duties. IMMEX sus- pends import duties on inputs that are sub- sequently exported, PROSEC permanently reduces Mexican MFN duties on specified inputs for designated sectors (including electronics), and Rule 8 allows duty-free im- port of inputs unavailable in sufficient quan- tity in North America. In combination, these programs let non-originating inputs flow into U.S.-bound goods at little or no Mexican duty. USTR could make these Mexican ex- port promotion programs a point of conten- tion, with direct consequences for electron- ics importers sourcing Asian components for Mexican assembly. Conclusion Rules of origin are often an overlooked aspect of trade policy, but for electronics manufacturers, they are where the math is done. The 2026 review has a real chance of moving that math in ways that change sourcing economics, qualification docu- mentation requirements, and cost structures across the SMT and EMS world. Companies that depend on the current GN 11(p) pathway, or on the standard PSRs for telecom, networking, power conversion, and magnetics product families, should map their product lines against the existing rules now and be ready to model the impact of likely changes well before they're finalized. In the next installment, I'll turn to the Section 301 investigations and their impact on electronics supply chains, and how those interact with USMCA preferential treatment. The trade architecture keeps getting denser, and the electronics industry is sitting at the intersection of nearly every piece of it. James Kim is an international trade lawyer at ArentFox Schiff LLP. He can be reached at james.kim@afslaw.com.