The USVI Tariff Advantage
The U.S. Virgin Islands is an insular possession of the United States. With the right production steps recognized by CBP as substantial transformation, goods can be considered USVI-origin and re-enter the U.S. mainland without Section 301 tariffs.
Substantial transformation and country-of-origin
Normally, re-exported products are taxed based on the country where they were manufactured. However, if HIP performs production steps in the USVI that meet the U.S. Customs and Border Protection (CBP) standard for substantial transformation—such as additive manufacturing of key components, firmware installation, and calibration—the country of origin shifts to the U.S. Virgin Islands.
In that case, goods may enter the U.S. mainland without Section 301 tariffs, creating a powerful competitive and cost advantage for our clients.
CBP pre-approval, not guesswork
HIP’s strategy relies on documented compliance. We work with CBP in advance to secure pre-approval of transformation activities, giving clients assurance that goods qualify as USVI origin and enter the U.S. tariff-free. We’ve already guided clients through this process and can execute at scale.