Being produced out of state doesn't get you out of it. If you import something from out of state, the act of importing causes VAT to be due on its value. If you then add value in the factory, you owe that too. The total VAT is always equal to the sale price. (If you like to promote exports you then give a refund for products not sold in the state.)

That gives a heavy incentive to lie about where it was produced. That’s fine when imports are tracked across a border, but not in the system we have in the US.