Tariffs have become a foremost concern for U.S. companies sourcing materials or products globally. Whether you’re importing high-value components for medical devices or software-integrated hardware, using foreign goods for your products or packaging (or having other relationships with foreign markets), sudden shifts in trade policy can disrupt margins overnight.
For decision-makers—especially those without full-time in-house counsel—having strategic legal solutions will be critical in times of financial and economic uncertainty. CLARK.LAW has received a number of inquiries about this topic as we work with our clients to implement proactive, data-driven solutions that align legal strategies with real business goals.
There are a number of possibilities to consider in order to minimize the direct impact your company feels from the Trump Administration’s historic tariff expansions. We want to explore a number of options for you as you consider ways to prepare for what’s to come.
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Substantial Transformation and Country of Origin Rules
The country of origin matters. A product’s origin affects not just labeling but tariff exposure. U.S. Customs uses the “substantial transformation” test to decide where a product truly originates. This test asks whether the product underwent a process that resulted in a new article of commerce with a different name, character, or use.
Businesses can reduce tariff impact by importing components and performing meaningful assembly or manufacturing in the U.S. For example, medtech companies importing circuit boards or sensors may build out final devices domestically. When done correctly, this can shift the origin of the product to the U.S., making it exempt from certain country-specific tariffs.
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Strategic Bundling with Domestic Goods
Bundling doesn’t automatically change a product’s tariff classification, but it can create strategic advantages. If your company offers kits or multi-part systems, structuring the package so the domestic component holds the “essential character” is a smart move. U.S. Customs evaluates these kits based on what drives the product’s core function, not just how it’s packaged.
If your U.S.-made software or hardware dominates in value or utility, and the imported component supports rather than defines the bundle, you may be able to classify the entire package under the domestic good’s Harmonized Tariff Schedule (HTS) code. Caution is key—every case depends on proper classification and supporting documentation.
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Using Foreign Trade Zones for Flexibility and Savings
Foreign Trade Zones (FTZs) offer legal and logistical advantages for companies that operate across borders. Goods can be shipped into an FTZ without immediate duty payment. Assembly or manufacturing inside the FTZ may alter the product enough to qualify for lower duties—or even reset its country of origin if substantial transformation occurs.
This can benefit medtech or SaaS-enabled hardware firms that import sensors, cases, or chips, assemble them domestically in an FTZ, and then enter the finished product into U.S. commerce. The FTZ acts as a buffer and a staging ground, giving your company flexibility and potential cost reduction.
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Tariff Engineering as a Legal Design Strategy
When product design determines tariff rate, strategic engineering becomes a business decision. Altering materials, features, or functionality to land in a more favorable HTS classification is not only legal—it’s expected by companies protecting their margins.
For example, consider a company that manufactures connected diagnostic tools. Small changes in plastic content, battery type, or interface configuration can shift tariff brackets. A clear understanding of HTS classifications must back these moves and, often, confirmed with a binding ruling from U.S. Customs.
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Requesting Binding Rulings from U.S. Customs
Binding rulings bring legal clarity before the risk appears. Businesses can request an official decision from Customs and Border Protection (CBP) on how a proposed product will be classified, including its country of origin. Submitting a detailed description of your manufacturing process and final goods can lock in classification decisions and protect you from unexpected enforcement actions.
This works exceptionally well for evolving product lines. Whether rolling out new software-integrated hardware or changing your supply chain, a binding ruling removes the guesswork from a high-stakes area of international business.
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Trade Agreement Opportunities and Strategic Sourcing
The U.S. has multiple trade agreements that offer favorable tariff treatment, including the United States-Mexico-Canada Agreement. Sourcing components from Mexico or Canada and performing final assembly in the U.S. can open the door to preferential treatment. This tactic supports cost efficiency while maintaining quality control.
Companies in medtech and healthcare software can use this strategy to build North American supply chains that still benefit from tariff protections without sacrificing speed or reliability.
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Re-Importation Under HTS 9801 for Returned U.S. Goods
Products originally made in the U.S. that are returned (such as warranty items or demo units) can come back duty-free under HTS 9801. This applies only if the goods were not advanced in value or improved abroad. Detailed records are essential: proof of U.S. manufacturing, serial numbers, and export documents all help secure this benefit.
This is especially relevant for high-value equipment or devices frequently returned for maintenance or replacement. Avoid paying duties twice by documenting it right the first time.
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Rely on Data-Driven Legal Solutions in Times of Uncertainty
Tariffs create legal and financial uncertainty, leaving many American companies and workers concerned about their future. Safety will come in numbers. With the right strategy, that risk becomes more manageable.
CLARK.LAW delivers data-driven legal solutions grounded in precision, efficiency, and peace of mind. Contact our team to learn more about your options and deploy modern, business-aligned legal strategies for your company. When so much is changing, you need to rely on the future of business law rather than outdated strategies that leave you behind.
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