Alan Edward Klein
Member
There is a legal loophole here, which lets the country that made the "last substantial transformation" be regarded as the country of origin.
See here: https://taxation-customs.ec.europa....origin-goods/non-preferential-rules-origin_en
This loophole allows luxury items manufactured in low cost countries to be imported into high cost countries where a small finishing process is carried out and marked as originating in the high cost country.
It is also the basis for classifying items that have components from two or more countries. For example, most large format lenses including those manufactured in Germany were mounted in Copal shutters that were made in Japan. For some lenses at least, it is possible that the cost of the cells is far less than the cost of the shutter. Yet, the lens is considered to be manufactured in Germany.
However, the November 2024 judgment in the Harley Davidson case regarding motorcycles "manufactured" in Thailand to avoid the punitive duties imposed on US manufactured motorcycles ruled that the origin of such items would be determined on the basis of the origin of the major portion of its parts.
See: https://www.cassidylevy.com/news/eu...case-on-last-substantial-transformation-test/
It would be interesting to see how luxury brands mark their goods in the coming years.
Kumar
Vietnam has agreed to discuss this issue with the US to get some relief from high US tariffs for this very reason. Vietnam doesn't want these high tariffs applied to its actual, home-made products. So, it appears to be willing to stop this shady practice of transshipping Chinese-made goods. We'll see what happens. What's interesting is that much of Japanese products are made today in Vietnam, China and Thailand. If deals aren't made, Japan could start manufacturing more of their photo products at home again.