Country of Origin?

[gnuarm]

How is country of origin determined?  It seems goods from China are being hit with tariff even if they are not made in China.  What's up with that?

Then there's the whole China v. Taiwan thing.  Legally Taiwan is part of China, but in the US we simply don't treat the Taiwanese as Chinese... mostly.  Does the tariff apply to Taiwan as well?

[JohnnyMalaria]

Legally Taiwan is part of China

That depends who you ask.

[gnuarm]

Legally Taiwan is part of China

That depends who you ask.

That's why I said "legally".  It is not in dispute really.  Even the US acknowledges formally that there is one China.  We just avoid being public about the issue either way.  The only ones who dispute it are the Taiwanese and they have nothing to do with US tariffs.  Well, there are a handful of countries that formally acknowledge Taiwan, but they also have nothing to do with US tariffs.

[cdev]

 A claim by Taiwan that it was the legitimate ruler of all China would be ridiculous, similarly is the claim by PRC China, that it is owner of Taiwan as long as Chine remains a one party state. SO I dont see China assimilating Taiwan anytime soon, nomatter what the PRC says or does. June  1989 still is too fresh in my and many others memory for that.

[JohnnyMalaria]

Legally Taiwan is part of China

That depends who you ask.

That's why I said "legally".  It is not in dispute really.  Even the US acknowledges formally that there is one China.  We just avoid being public about the issue either way.  The only ones who dispute it are the Taiwanese and they have nothing to do with US tariffs.  Well, there are a handful of countries that formally acknowledge Taiwan, but they also have nothing to do with US tariffs.

The US has sold arms to Taiwan and now has official relations with Taiwan (Taiwan Travel Act of 2018). It's a political minefield, so don't expect an easy answer to the tariff question. Recall that the tariffs Trump imposed on steel imports were not for those just from China. As a result (intentional or otherwise), he didn't have to address the Taiwan issue.

[coppice]

Legally Taiwan is part of China.

Internationally Taiwan is treated as a renegade province of China, and China is considered to have sovereignty over Taiwan. However, for trade purposes it is treated very differently from China.

Does the tariff apply to Taiwan as well?

Most countries apply completely separate tariff, quota and import/export control schemes when dealing with Taiwan and China. However, most major Taiwanese companies now produce most of their goods in China, so the country of origin of something that appears to be from Taiwan many actually be China. Country of origin is complex, because most products are assembled from pieces made in various countries. There can be a complex procedure to work out where enough value was added to consider any particular country the country of origin. When the product has a prominent "Made in X" mark on it, that is usually the place where the final assembly occurred, which may not be considered the country of origin.

[gnuarm]

I trying specifically to get to the bottom of the determination of country of origin.  I suspect the seller has to provide proof.  I have a question in to ADI about the CoO for the part in question.  It could be where the chips are made, or it could be where they are diced and packaged. 

At least I know to ask about this now.  Monday I will try finding the branch of the government responsible so I can find the info I need.  They tend to steer you to web sites that have the technical jargon and are not easy to understand.  Initially I thought the duty was only going to be a couple percent. 

[I wanted a rude username]

Legally Taiwan is part of China

Damn, dude. Do you want your question answered, or do you want to derail the conversation into completely unrelated politics?

Anyway, a complicating factor is "substantial transformation". Here's an article about it.

> The programming of a device that changes or defines its use generally constitutes substantial transformation.

You can use this to your advantage if for example you have a PCB assembled in China, then exported to Taiwan, Vietnam, or some other country and the firmware flashed onto it there, before being exported to the US.

[gnuarm]

Legally Taiwan is part of China

Damn, dude. Do you want your question answered, or do you want to derail the conversation into completely unrelated politics?

Anyway, a complicating factor is "substantial transformation". Here's an article about it.

> The programming of a device that changes or defines its use generally constitutes substantial transformation.

You can use this to your advantage if for example you have a PCB assembled in China, then exported to Taiwan, Vietnam, or some other country and the firmware flashed onto it there, before being exported to the US.

Substantial transformation is not important when buying ICs as there is no transformation. 

[JohnnyMalaria]

Permit me to add some confusion.

I received some parts direct from Analog Devices Inc (I assume that's the same ADI ) so I just had a look at the paperwork.

It specifies:

COUNTRY OF ASSEMBLY: Malaysia
COUNTRY OF DIFFUSION: Taiwan

"Country of Diffusion" is a new term for me. A quick search found this (which I have not read but looks potentially useful):

http://www.faqs.org/rulings/rulings2007HQW968421.html

[I wanted a rude username]

Substantial transformation is not important when buying ICs as there is no transformation.

So tell us the relevant background instead of soapboxing ...

COUNTRY OF ASSEMBLY: Malaysia
COUNTRY OF DIFFUSION: Taiwan

Interesting. Brings to mind Apple's notorious "Designed in California, Made in China". And those chips would ultimately be marked "Made in Malaysia", due to packaging being substantial transformation?

[gnuarm]

Permit me to add some confusion.

I received some parts direct from Analog Devices Inc (I assume that's the same ADI ) so I just had a look at the paperwork.

It specifies:

COUNTRY OF ASSEMBLY: Malaysia
COUNTRY OF DIFFUSION: Taiwan

"Country of Diffusion" is a new term for me. A quick search found this (which I have not read but looks potentially useful):

http://www.faqs.org/rulings/rulings2007HQW968421.html

Yes, ADI very often refer to themselves as ADI so I did too.

That just means where the wafers are made as they seem to have settled on the term "diffusion" for the fabrication of the wafer.  That does answer one question for me.  The country of origin will be the place it was packaged, not necessarily where it was diffused. 

Thanks

[JohnnyMalaria]

Permit me to add some confusion.

I received some parts direct from Analog Devices Inc (I assume that's the same ADI ) so I just had a look at the paperwork.

It specifies:

COUNTRY OF ASSEMBLY: Malaysia
COUNTRY OF DIFFUSION: Taiwan

"Country of Diffusion" is a new term for me. A quick search found this (which I have not read but looks potentially useful):

http://www.faqs.org/rulings/rulings2007HQW968421.html

Yes, ADI very often refer to themselves as ADI so I did too.

That just means where the wafers are made as they seem to have settled on the term "diffusion" for the fabrication of the wafer.  That does answer one question for me.  The country of origin will be the place it was packaged, not necessarily where it was diffused. 

Thanks

This is true for pharmaceuticals, too. It is common for a product to be manufactured in bulk in one country and shipped to another for final packaging. e.g, with Ventolin (for asthma) that's sold in the US, the actual inhaler may be manufactured in Normandy (France) or North Carolina (US) but they get put in the cardboard boxes in North Carolina, so they are labelled as "Manufactured in USA".

[SiliconWizard]

Permit me to add some confusion.

I received some parts direct from Analog Devices Inc (I assume that's the same ADI ) so I just had a look at the paperwork.

It specifies:

COUNTRY OF ASSEMBLY: Malaysia
COUNTRY OF DIFFUSION: Taiwan

"Country of Diffusion" is a new term for me. A quick search found this (which I have not read but looks potentially useful):

http://www.faqs.org/rulings/rulings2007HQW968421.html

Yes, ADI very often refer to themselves as ADI so I did too.

That just means where the wafers are made as they seem to have settled on the term "diffusion" for the fabrication of the wafer.  That does answer one question for me.  The country of origin will be the place it was packaged, not necessarily where it was diffused. 

Thanks

This is true for pharmaceuticals, too. It is common for a product to be manufactured in bulk in one country and shipped to another for final packaging. e.g, with Ventolin (for asthma) that's sold in the US, the actual inhaler may be manufactured in Normandy (France) or North Carolina (US) but they get put in the cardboard boxes in North Carolina, so they are labelled as "Manufactured in USA".

Well, rules for stating that some product is "made in xxx" depend on the country. Not quite sure for the USA, but over here, for a product to be claimed "made in France", the rule is that the product must have its "last significant transformation step" in France. I guess it's probably something similar in the USA and in many other countries. Thing is, this rule is vague enough that it's relatively easy to spoof. The only real thing it prevents is that the product be 100% manufactured in another country. Just "packaging" a product should not be enough to qualify, but if the production cost of the product is low enough, it may still be considered significant... and I guess in the example you gave, that could pass indeed, as packaging medical devices, however simple it may be, is usually part of the certification (the packaging must protect the products properly during transport so they are still valid), so it's probably very easy to justify it's a significant last step.

[cdev]

That last step is where the value gets added, in the case of a drug, the value of the active ingredient might shift from .00000032 cents to $1000 a pill

For a better explanation of how they price drugs, see Donald Light's explanation of the Market Spiral pricing algorithms for cancer drugs.

which is basically "buy or die" see
Pharmamyths .net for the details.

I also attached a PDF from the wto site on country of origin's legal aspects (from a a German law firm).