Customs Clarifies "U.S. Content" for Reciprocal Duties

May 12, 2025
By: David G. Forgue

The “reciprocal duties” the United States introduced on April 2, 2025 have undergone numerous clarifications, guidance documents, more guidance documents, delays, and pauses. Through it all, the duties have had an exclusion built in for U.S. value of the good, as long as that value is at least 20% of the total value of the import. The specific language is “’U.S. content’ refers to the value of an article attributable to the components produced entirely, or substantially transformed in, the United States.”

The formulation that value was attributable to components led many importers to believe that the very substantial investments they’d made in U.S. design and research was about to benefit them with lower duty payments. This would have been a real benefit, since the value of such work is generally already excluded from U.S. entered value under 19 U.S.C. 1401a(h).

Alas, like so many things too good to be true, Customs has clarified that “non-physical” elements are not to be calculated as part of the 20% calculation of U.S. content. This means that royalties, design, research and development and similar efforts undertaken in the United States are excluded from the 20% calculation.

Do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP regarding tariffs, duties, calculations, or anything else related to importing.