De Minimis (also called the Tolerance Rule) is an allowance in most FTA rules of origin that permits a small percentage of non-originating materials that fail the applicable tariff shift rule to be disregarded, so long as the finished good otherwise satisfies the rule.
The threshold and scope vary by agreement:
- USMCA — Up to 10% of the adjusted value of the good may be non-originating materials that don't undergo the required tariff shift (Article 4.12)
- KORUS — 10% of the adjusted value
- CAFTA-DR — 10% of the adjusted value
- NAFTA (historical) — 7% of transaction value
- Textiles and apparel — Tighter rules (typically 7% by weight of the component fiber determining classification, with carve-outs)
De minimis applies only to the tariff shift requirement — it does not relax regional value content thresholds, wholly obtained requirements, or specific processing requirements. If a rule requires both a tariff shift and an RVC, de minimis can save the tariff shift, but the RVC must still be met (and the de minimis non-originating material's value is included in the non-originating value for RVC calculation).
Some products are excluded from de minimis treatment under specific FTAs — typically agricultural products like dairy, sugar, edible animal products, and certain processed foods listed in the agreement annex.
For non-preferential origin (i.e., substantial transformation), there is no formal de minimis rule, though courts and CBP apply a general principle that minor or inconsequential foreign content does not defeat origin in the country of major processing.
De minimis is applied per finished good, not aggregated across multiple SKUs. Origin determinations must be made on an entry-by-entry basis with the relevant bill of materials.