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U.S. Product Content – What it Means to Exporters
February 20, 2020 Office of Small Business/Office of Communications

So, you are ready to export your products. Target markets have been carefully chosen. The products have been modified to align with each market’s needs and preferences. Packing, labels and documentation have been translated and redesigned. You have found a great freight forwarder to ship your products and have completed the required trade paperwork. There is even a plan in place on how to handle returns and warranty issues. Now, you really need some way to protect your products from foreign buyer nonpayment, political risks, and other commercial issues.

EXIM provides a number of solutions to assist U.S. companies that export including Export Credit Insurance.

Upon reviewing EXIM’s eligibility criteria one piece of information stands out – U.S. content. But what does that mean to you?

EXIM’s U.S. content criteria specifications state:

Each product must have more than 50% U.S content based on all direct and indirect costs, including but not limited to labor, materials, research and administrative costs, exclusive of profit.

But what does that mean?

You satisfy the EXIM’s content requirements if you import a product for $5.00 and then spend $5.01 in additional labor, repackaging, warehousing, inventory control, accounting, etc.

Chart: Foreign Content Cost $5, U.S. Content Cost $5.01, Total Cost $10.01, Sales Price $25, Profit $14.99, percentage of U.S. content
  • Foreign Content Cost ($5.00) + U.S. Content Cost ($5.01) = Total Cost ($10.01)
  • U.S. Content Cost ($5.01)/Total Cost ($10.01) > 50%
  • 50.05% > 50%

It is that simple. Just remember not to include profit in your content calculation.

To schedule and export consultation, just click here and complete a brief questionnaire . Then an expert will arrange a time to discuss how EXIM might be able to support and increase your international sales.

Get a Free Export Finance Consultation Today!

EXIM’s Blog postings are intended to highlight various facets of exporting, but the postings are not legal advice, and are not intended to summarize all legal requirements associated with exporting.