By Richie Lin    Photo：CANVA

U.S. President Trump's announcement of reciprocal tariffs has shocked the world. However, according to the U.S. federal government document, the HTSUS 9903.01.34 (hereinafter referred to as the "U.S. Content rule") described, if U.S.-origin components (U.S. content) account for more than 20% of the customs value of imported goods, the portion made in the U.S. may be exempt from the tariff. This could benefit the tech supply chain, including AI servers, iPhones, and MacBooks, thereby slightly easing the impact on Taiwan's technology sector.

According to the U.S. Content rule, if U.S.-origin components make up more than 20% of the customs value of a product exported to the U.S., the U.S.-made portion may be exempt from the tariff. Although the rule does not specify exactly how U.S. content should be calculated, industry experts speculate that for high-demand products like AI servers, up to 60% of the cost comes from GPUs (graphics processing units) supplied by NVIDIA, a U.S. company. This portion is likely to qualify as U.S. content and could be eligible for partial tariff exemption.

To comply with the U.S. content rule (e.g., HTSUS subheading 9903.01.34) and benefit from reduced or exempted additional tariffs (like the new 32% tariffs on Taiwanese goods), here's what you and your company should do step by step:

1. Evaluate Product Composition

• Break down your product's Bill of Materials (BOM).
• Identify all U.S.-origin parts/components and their respective values.
• Determine whether 20% or more of the total customs value comes from U.S. content.

U.S. content means materials/components that are either:

• Wholly obtained or produced in the U.S., or
• Substantially transformed in the U.S. (i.e., undergo meaningful manufacturing or change in form/use).

2. File Everything Thoroughly

You will need to present below but not limited to documents in front of Customs and Border Protection (CBP).

• Supplier certificates of origin
• Invoices and cost breakdowns
• BOM with value allocations
• Manufacturing process descriptions
• Freight and insurance records if relevant
• Keep all records related to origin, valuation, and entry filings for at least 5 years, as required by U.S. customs law.

3. Train Your Logistics & Compliance Teams

Make sure:

• Staff know how to identify U.S. content
• Your customs broker understands how to file the split entry properly.
• You’re set up to respond quickly to any CBP inquiries or audits.

4. Split Your Customs Entry

When filing customs:

• Create two lines in your Entry Summary:
  • Line 1 – U.S. content portion: Apply HTSUS 9903.01.34 + standard HTSUS classification. Declare numbers of product in this line
  • Line 2 – Non-U.S. portion: Use the same HTS code, but apply the additional tariff code (e.g., 9903.01.61 for the 32%). No need to declare numbers of products in this line.

This is crucial: You only pay the extra tariff on the non-U.S. content.

5. Sample of Split Entry (HTSUS 9903.01.34 Format)

When customers face the shock of reciprocal tariffs in the USA, they need a well-experienced customs broker to guide them if their products can be applied to US content rule. You can reach out to richie_lin@tgl-group.net if need any advices.

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