With the emergence of a transformed trade landscape, companies that understand the country of origin for their imports are at a crucial strategic advantage.
Article Highlights:
Through its first four months alone, 2025 has been one of the most volatile years for international trade in decades. A raft of tariffs levied by the U.S. against other countries, retaliatory measures by those nations, and tit-for-tat escalations between America and many of its most important trading partners have created a tumultuous trade landscape. For many U.S. businesses and manufacturers that rely on global supply chains, the result has been a climate of uncertainty and fear.Â
In the midst of this uncertainty and fear, however, organizations are learning that data visibility can help them enhance their agility and capacity to respond effectively to this dynamic new environment. The more firms grasp about their supply chains, direct and subtier manufacturers, and the complex pathways their imports take from raw materials to finished goods, the more resilience theyâre able to foster. To achieve this supply chain resilience, companies are working to obtain a battery of different types of data. These include supply chain maps, Harmonized Tariff Schedule (HTS) codes, and manufacturing site locations.Â
One of the most essential data points businesses are now striving to obtain for their imports is country of origin (COO). Though it may seem more straightforwardâeven obviousâcompared with multifaceted codes and labyrinthine supply chains, it now plays a disproportionately large role in the costs associated with importing goods into the U.S.
A productâs country of origin, frequently abbreviated as its âCOO,â refers to the nation where it was originally manufactured. More than just a fact related to a commodity, material, or good, COO is also a legal designation and enforceable requirement. According to the U.S. Customs and Border Protection (CBP), âEvery article of foreign origin entering the United States must be legibly marked with the English name of the country of origin unless an exception from marking is provided for in the law.â
Because many items now undergo manufacturing steps in a number of different countries en route to becoming the final product purchased by an importer, COO designation is not always immediately clear. For goods that are manufactured in multiple countries, Customs and Border Protection follows the legal principle of substantial transformation. As the U.S. International Trade Administration (ITA) outlines on its website, this principle stipulates that the COO of items made in multiple nations is determined by using the final country where a substantial transformation took place.Â
The COO designation for imports may be the most impactful it has ever been this century. This is because the country of origin is the determining factor in most of the Trump administrationâs tariffs. While President Trump has also implemented a number of sectoral tariffs since taking office in January, the past month has seen an unprecedented spike in the tariff rates for dozens of major trading partners worldwide.Â
But businesses shouldnât think of country of origin as merely a classification trigger officers use when imposing tariffs on their imports. Rather, COOs are consequential data points importers themselves can use to help increase awareness of their vulnerabilities and cultivate greater supply chain resilience.
Organizations that know the COO of their imports are able to determine the tariff costs associated with them ahead of time. Moreover, they can also use analytics and data reporting tools to calculate their collective tariff responsibilities based on the total number of goods they import.Â
This can help manufacturers understand costs and changes to overhead, and revise revenue forecasts for the remainder of 2025 and beyond. It also helps put total tariff costs in perspective, giving supply chain executives a single cogent number illustrating the full financial consequences of maintaining existing sourcing.Â
Beyond just giving importers the geographical data necessary to understand tariff costs, COO data also paints a picture of companiesâ global supply chainsâand the major dependencies embedded within them. A larger automotive manufacturer, for example, may import tens of thousands of components over the course of a single year, with over half of those parts being shipped to the U.S. from China. But without complete COO data, the automaker may not be aware of just how dependent they are on Chinese manufacturing for the production of their vehicles.Â
Beyond just giving importers the geographical data necessary to understand tariff costs, COO data also paints a picture of companiesâ global supply chainsâand the major dependencies embedded within them.
In this way, COO data can serve as consequential supply chain risk management (SCRM) information, allowing businesses to see potential vulnerabilities in their supply chain stemming from an overreliance on specific countries.Â
A proactive approach to supply chain risk management means keeping one eye on the future, trying to practice the ârisk sensingâ necessary to decipher where the next wave of threats are coming from. For example, while the 10% tariffs on major manufacturing nations like Vietnam, Malaysia, and Thailand may seem manageable today, those figures could shift dramatically after the Trump administrationâs 90-day pause has expired.Â
Being able to parse COO data can help organizations identify where potential future vulnerabilities lieâgiving them the data-driven justification to develop and implement supply chain mitigation measures. A U.S. manufacturer importing primarily from China and a number of South Asian nations may want to diversify toward the U.S., Canada, and Mexico, where the risk of high tariff rates are considerably lower.Â
Few SCRM strategies are invoked as frequently as supply chain diversification. But while the idea of diversifying oneâs suppliers and sourcing to encompass a variety of countries, manufacturers, and sites sounds relatively straightforward on the surface, itâs a nearly impossible task to execute without clear parameters or a narrowly defined scope. Thatâs because many large U.S. companies source tens of thousands of parts every year, working with hundreds of manufacturers across a multitude of countries and regions. It simply isnât feasibleâor strategically necessaryâto secure alternative suppliers for 500 manufacturers, or carry out a complete overhaul of a complex supply chain thatâs been built up over many years.Â
But while the idea of diversifying oneâs suppliers and sourcing to encompass a variety of countries, manufacturers, and sites sounds relatively straightforward on the surface, itâs a nearly impossible task to execute without clear parameters or a narrowly defined scope.
Instead, organizations need to approach supply chain diversification with a magnifying glass and a scalpel, identifying the specific parts and commodity categories that are most in need of broader, more diversified sourcing. COO data can help procurement professionals make these determinations by giving them a full picture of where all their parts are coming from, and where the dependencies and potential future bottlenecks lie.Â
In the current trade environment, U.S. manufacturers are doing just about everything in their power to offset the high costs imposed by the Trump administrationâs tariff regime. One leading-edge strategy in this emerging playbook is restructuring the manufacturing processes of a given product or subassembly so that the final location of substantial transformationâwhich determines COOâshifts from a high-tariff country to a low-tariff one. While measures like these are complex and demand significant expertise, they can pay off in meaningful, lasting ways.
To start the work of engineering a new manufacturing process, however, businesses need to be able to parse the COOs of all their imports. With the full picture of where their parts and subassemblies are coming from, they can then decide which goods are worth implementing this resource-intensive process for.Â
When used effectively, COO data on products, parts, and subassemblies can give U.S. importers actionable insights into where their goods are being manufactured. By combining individual data points into larger reports on COO patterns and distributions across thousands of goods, firms can act decisively to mitigate tariff impacts and avoid future trade risks. SCRM platforms can be powerful resources for this type of risk management, giving users credible, up-to-date information on the COOs of hundreds millions of electronic components all over the world.Â
SCRM software Z2Data can reveal critical dependencies with a unique Sourcing Status feature that allows users to:
Whether companies are looking to reduce dependencies on countries, regions, or manufacturers, Z2Data has the data to guide shrewd strategic actions. To learn more about Z2Data and how the platform can help businesses use COO data to mitigate risk across supply chains, schedule a free demo with one of our product experts.
Z2Dataâs integrated platform is a holistic data-driven supply chain risk management solution, bringing data intelligence for your engineering, sourcing, supply chain and compliance management, ESG strategist, and business leadership. Enabling intelligent business decisions so you can make rapid strategic decisions to manage and mitigate supply chain risk in a volatile global marketplace and build resiliency and sustainability into your operational DNA.
Our proprietary technology augmented with human and artificial Intelligence (Ai) fuels essential data, impactful analytics, and market insight in a flexible platform with built-in collaboration tools that integrates into your workflow. Â