1. 🇺🇸 Section 301 Tariffs – Overview of Targeted Chinese Product Categories
Since 2018, the United States has imposed punitive tariffs (Section 301) on thousands of Chinese-origin goods. These additional tariffs—ranging from 7.5% to 25%—are levied on top of the regular Most-Favored Nation (MFN) duty rates under the U.S. Harmonized Tariff Schedule (HTSUS).
| Product Sector | Additional U.S. Duty on Chinese Origin | HTSUS Examples |
| —————————- | ————————————– | ————– |
| Electric vehicles (EVs) | +25% | 8703.80.x |
| Lithium-ion batteries, cells | +7.5% to +25% | 8507.x |
| Consumer electronics | +15% to +25% | 8542.x, 8528.x |
| Solar panels, inverters | +15% | 8541.x, 8504.x |
| Machinery and components | +10% to +25% | 8479.x |
| Steel and aluminum products | +10–25% + Section 232 tariffs | 7210.x, 7610.x |
| Lighting equipment, fixtures | +25% | 9405.x |
| Textiles and apparel | +7.5% to +25% | 6201.x |
—
2. 🇺🇸 Rules of Origin: When Does U.S. Customs Recognize a Product as Hungarian?
For Chinese-origin inputs to be treated as originating in Hungary under U.S. customs law, the product must undergo a “substantial transformation” in Hungary. This requires:
A change in tariff classification (CTC), and/or
A significant transformation in function, character, or use, beyond minimal processing or repackaging.
U.S. origin rules differ from EU ones; the U.S. does not apply value-added thresholds or cumulation in the same way. Documentary proof of transformation is essential.
—
3. 🌍 Case Studies: Products Benefiting from U.S. Tariff Mitigation When Manufactured in Hungary
| Product | U.S. Duty from China | U.S. Duty with HU Origin | Transformation Type in Hungary |
| ————————————- | ——————– | ———————— | —————————————– |
| Electric scooters | \~25% | \~2.5% | Battery and motor integration |
| Notebook computers | \~15% | 0–2.5% | Assembly, BIOS upload, testing |
| Solar inverters | \~15% | \~2.5% | Housing, software installation |
| Home energy storage (e.g., Powerwall) | 25% | 2.5% | Modular assembly and BMS integration |
| LED lighting fixtures | 25% | 3.9% | Component integration, smart control |
| Aluminum frames | 10–25% + §232 | 5–7% | Machining, CNC shaping, surface treatment |
—
4. ✅ When Is Manufacturing Relocation to Hungary Legally Effective for U.S. Customs?
A company may avoid U.S. Section 301 tariffs if:
The product exported from Hungary is classified under a different HTS code than its Chinese components, and
The Hungarian processing adds significant commercial functionality or alters the product’s essential character.
❌ Not sufficient:
Mere repackaging or relabeling
Basic quality checks or assembly without change in function
Cosmetic enhancements without economic relevance
—
5. 📄 Supporting Documentation
To claim Hungarian origin, exporters should prepare:
Detailed bill of materials (BOM),
Production flowcharts showing transformation,
Tariff shift justifications,
Certificates of origin,
Technical descriptions and photos of processing stages.
—
6. 🔧 Strategic Recommendations
Analyze high-tariff Chinese products on the Section 301 list;
Assess feasibility of “substantial transformation” in Hungary (labor, cost, logistics);
Engage legal review for each tariff classification and origin claim;
Consider long-term trade policy risks and rules of cumulative origin.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57
U.S. Tariff Savings Opportunities Through Manufacturing Relocation to Hungary
1. 🇺🇸 Section 301 Tariffs – Overview of Targeted Chinese Product Categories
Since 2018, the United States has imposed punitive tariffs (Section 301) on thousands of Chinese-origin goods. These additional tariffs—ranging from 7.5% to 25%—are levied on top of the regular Most-Favored Nation (MFN) duty rates under the U.S. Harmonized Tariff Schedule (HTSUS).
| Product Sector | Additional U.S. Duty on Chinese Origin | HTSUS Examples |
| —————————- | ————————————– | ————– |
| Electric vehicles (EVs) | +25% | 8703.80.x |
| Lithium-ion batteries, cells | +7.5% to +25% | 8507.x |
| Consumer electronics | +15% to +25% | 8542.x, 8528.x |
| Solar panels, inverters | +15% | 8541.x, 8504.x |
| Machinery and components | +10% to +25% | 8479.x |
| Steel and aluminum products | +10–25% + Section 232 tariffs | 7210.x, 7610.x |
| Lighting equipment, fixtures | +25% | 9405.x |
| Textiles and apparel | +7.5% to +25% | 6201.x |
—
2. 🇺🇸 Rules of Origin: When Does U.S. Customs Recognize a Product as Hungarian?
For Chinese-origin inputs to be treated as originating in Hungary under U.S. customs law, the product must undergo a “substantial transformation” in Hungary. This requires:
A change in tariff classification (CTC), and/or
A significant transformation in function, character, or use, beyond minimal processing or repackaging.
U.S. origin rules differ from EU ones; the U.S. does not apply value-added thresholds or cumulation in the same way. Documentary proof of transformation is essential.
—
3. 🌍 Case Studies: Products Benefiting from U.S. Tariff Mitigation When Manufactured in Hungary
| Product | U.S. Duty from China | U.S. Duty with HU Origin | Transformation Type in Hungary |
| ————————————- | ——————– | ———————— | —————————————– |
| Electric scooters | \~25% | \~2.5% | Battery and motor integration |
| Notebook computers | \~15% | 0–2.5% | Assembly, BIOS upload, testing |
| Solar inverters | \~15% | \~2.5% | Housing, software installation |
| Home energy storage (e.g., Powerwall) | 25% | 2.5% | Modular assembly and BMS integration |
| LED lighting fixtures | 25% | 3.9% | Component integration, smart control |
| Aluminum frames | 10–25% + §232 | 5–7% | Machining, CNC shaping, surface treatment |
—
4. ✅ When Is Manufacturing Relocation to Hungary Legally Effective for U.S. Customs?
A company may avoid U.S. Section 301 tariffs if:
The product exported from Hungary is classified under a different HTS code than its Chinese components, and
The Hungarian processing adds significant commercial functionality or alters the product’s essential character.
❌ Not sufficient:
Mere repackaging or relabeling
Basic quality checks or assembly without change in function
Cosmetic enhancements without economic relevance
—
5. 📄 Supporting Documentation
To claim Hungarian origin, exporters should prepare:
Detailed bill of materials (BOM),
Production flowcharts showing transformation,
Tariff shift justifications,
Certificates of origin,
Technical descriptions and photos of processing stages.
—
6. 🔧 Strategic Recommendations
Analyze high-tariff Chinese products on the Section 301 list;
Assess feasibility of “substantial transformation” in Hungary (labor, cost, logistics);
Engage legal review for each tariff classification and origin claim;
Consider long-term trade policy risks and rules of cumulative origin.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57