OT:RR:CTF:VS H313369 JMV
Jose Fierro
Jose Alfredo Fierro Customs Broker
13526 Bradford St.
El Paso, TX 79928
RE: Section 301 Measures; Chinese Origin; USMCA
Dear Mr. Fierro:
This is in response to your correspondence, dated August 13, 2020, in which you request a ruling on whether certain Chinese-origin components, which are eligible for United States-Mexico-Canada Agreement (“USMCA”) preferential tariff treatment pursuant to General Note (“GN”) 11(p) of the Harmonized Tariff Schedule of the United States (“HTSUS”), are also subject to additional tariffs under Section 301. Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for response.
FACTS:
The facts underlying this ruling are the same as the facts at issue in Headquarters Ruling H312426, dated August 7, 2020. In HQ H312426, the importer is a U.S. company that has contracted with a Mexican maquiladora facility to provide certain logistical services. The merchandise at issue, described as “high tech goods” including automatic data processing machines, digital processing units, input/output units, and storage units, is of Chinese origin and will be imported to Mexico directly from China.
Once the merchandise arrives in Mexico, it will be transferred to the maquiladora facility, where workers will provide sorting, picking, packing, and shipping services in preparation for importation into the United States. You state that the goods will be exported to the United States in the same condition as they were imported into Mexico.
Based on the information in your submission, the merchandise will be classified in the following provisions of the HTSUS:
8471.50.0150;
8471.70.4065;
8471.70.5065;
8471.70.6000;
8471.70.9000;
8471.80.1000;
8473.30.1140;
8473.30.1180;
8473.30.5100;
8504.40.6012;
8504.40.6018;
8517.62.0020; and
8517.62.0090.
In HQ H312426, CBP found that the the Chinese-origin goods at issue will be deemed USMCA originating pursuant to GN 11(p) and, provided that all other requirements are met, will be eligible for USMCA preferential tariff treatment when imported into the United States from Mexico. You now ask us to consider whether the goods at issue will be subject to additional tariffs under Section 301.
ISSUE:
Whether the USMCA eligible Chinese origin goods are subject to duty under Section 301.
LAW AND ANALYSIS:
The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(b) and (f), HTSUS. Among the subheadings listed in U.S. Note 20(b) and (f) of Subchapter III, Chapter 99, HTSUS, are 8471.70.4065; 8471.70.5065; 8471.70.6000; 8471.70.9000; 8471.80.1000; 8473.30.1140; 8473.30.1180; 8473.30.5100; 8504.40.6012; and 8504.40.6018, HTSUS.
U.S. Note 20(a), which provides additional guidance on the applicability of the Section 301 measures to the subheadings listed in U.S. Note 20(b), states:
Products of China that are classified in the subheadings enumerated in U.S. note 20(b) to subchapter III and that are eligible for special tariff treatment under general note 3(c)(i) to the HTSUS, or that are eligible for temporary duty exemptions or reductions under subchapter II to chapter 99, shall be subject to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.01.
Similarly, U.S. Notes 20(e), which applies to subheadings listed in U.S. Note 20(f), states:
Products of China that are classified in the subheadings enumerated in U.S. note 20(f) to subchapter III and that are eligible for special tariff treatment under general note 3(c)(i) to the tariff schedule, or that are eligible for temporary duty exemptions or reductions under subchapter II to chapter 99, shall be subject to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.03.
GN 3(c)(i) lists the programs under which special tariff treatment may be provided, including USMCA. The goods under consideration are deemed originating under the USMCA pursuant to GN 11(p), HTSUS, and therefore, are eligible for special tariff treatment under GN 3(c)(i), HTSUS. However, because no processing occurs in Mexico other than sorting, picking, packing, and shipping services, the goods remain products of China. The additional duties under Section 301 are applicable on all the goods at issue, except those classified under subheading 8517.62.00, HTSUS, which is not currently listed in U.S. Note 20 of Subchapter III, Chapter 99, HTSUS.
HOLDING:
The country of origin of the subject goods for purposes of Section 301 is China and therefore, subject to the Section 301 duties.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch