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Technical Articles & Industry Trends
The Trade Agreement Act (or T.A.A.), passed in 1979, is U.S. legislation designed to protect and optimize the trade operations between the United States and associated countries. The Act, comprised of agreements and negotiations settled between the U.S. and those other countries, outlines its purpose as, among other things, “[to foster] an open world trading system; to expand opportunities for the commerce of the United States… and to improve the rules of international trade.”
When referring to goods and products purchased or traded under this Act, they will be considered “TAA compliant” if they satisfactorily abide by the rule of origin. The rule states that the product must be of the U.S. or one of its approved countries. To be “of” those regions, the rule states it must be “wholly the growth, product, or manufacture of that country or instrumentality, or in the case of an article which consists in whole or in part of materials from another country or instrumentality, it has been substantially transformed into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.”So, what does this mean? In short, the product must be made in an approved country or must at least be substantially transformed within that country. This “substantial transformation” usually comes in the form of processing and/or manufacturing taking place in an approved country after being brought in from a non-approved country. As an example, ingredients brought in from other countries that are baked into a processed food product have been substantially transformed.
As of January 2025, there are 127 TAA compliant countries, which span all continents.You can scroll your mouse to explore the interactive map below, or view the complete list of countries here.
TAA compliance is necessary for products utilized by numerous U.S. government bodies and other non-federal regulated bodies. The Department of Defense, including all branches of the military, and the Department of Transportation, including the Federal Aviation Association, are both examples of a wide net of potential end users who require TAA compliance in their solutions. This means that any equipment or device manufacturers aspiring to claim a coveted GSA (General Services Administration) contract and sell to a government entity must offer computer products that comply with this standard.
We talked about how processed food ingredients were TAA compliant because of the substantial transformation. Now, let’s look at a technical example. Consider a cell phone. If a cell phone enclosure and physical hardware is manufactured in, say, China, before being imported to the U.S., where the software and programming is implemented, the phone would be considered TAA compliant. This is because the product was more or less a shell that was not functional as a phone before those steps in the U.S. That warrants the substantial transformation, and results in a label of U.S. origin. See the U.S. Customs and Border Protection Ruling H014068 for related insight and other applicable cases.If the phone was fully programmed with a basic Chinese software, then imported to the U.S., where that software was replaced, it may instead be ruled to have a Chinese origin. The phone could already function and was merely altered for regional compatibility. This can vary case by case, but it may not constitute a substantial transformation and, as such, wouldn’t be TAA compliant.So, what’s the takeaway from this example? A computer is an amalgamation of countless components, hardware, and software; just how much needs to be made in a compliant country to be deemed TAA compliant? The answer is surprisingly straightforward. If no substantial transformation occurs, then at least 50% of the device’s manufacturing cost must originate from TAA compliant countries.
Whether you’re an equipment manufacturer seeking a TAA compliant monitor or computer to implement in your next solution, or an end-user working within strict compliance constraints, look no further than Teguar’s wide array of TAA compliant options. Check out a few of our most popular products for customers of these types, or get in touch with us below for even more information. Lastly, if you’ve got a larger project requiring TAA compliance and some specific customization needs, our Custom Product Group is ready and willing to jump in and make that happen, too.
Madelyn Brannan serves as the Digital Marketing Coordinator at Teguar, which presents an engaging opportunity to learn new things. She strives to help current and future customers by making them aware of the solutions that Teguar can provide. When Madelyn isn't researching things like you've just read about, they like to draw and play tabletop games.
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