OT:RR:CTF:EMAIN H318593 SKK
Center Director
Consumer Products & Mass Merchandising Center of Excellence and Expertise
U.S. Customs & Border Protection
1699 Phoenix Parkway, Suite 400
College Park, Georgia 30349
Attn: Cody A. Miller, Import Specialist; Sandra Needham, Supervisory Import Specialist
Re: Application for Further Review of Protest No. 1303-20-102671; Tariff classification of hybrid steel and aluminum hydraulic floor jacks from China; base metals; Application of Section 301 China products trade remedy
Dear Center Director:
This is our decision regarding an Application for Further Review (AFR) of Protest No. 1303-20-102671, filed by counsel on behalf of Costco Wholesale Corporation (Protestant). The Protest and AFR concern the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of hybrid hydraulic floor jacks. The AFR was forwarded to this office for consideration. No sample was provided for examination.
FACTS:
The subject merchandise is described as the “Arcan 3-ton Professional Grade Hybrid Service Jack (Costco Item 996603).” It measures 61 centimeters (cm) by 30.2 cm by 15.2 cm (exclusive of handle). It weighs 26.4 kilograms (kg) and has a lifting capacity of 6,000 pounds. The jack is comprised of 68.50% by weight of steel, 31% by weight of aluminum, and .5% rubber and plastic. A representative photograph of the subject merchandise is set forth below:
The protest covers four entries of the subject articles, which were made at the port of Baltimore between June 7, 2019, and July 3, 2019 and originally liquidated between April 17, 2020 and May 29, 2020 under heading 8425, HTSUS, specifically subheading 8425.42.00, HTSUS, which provides for “[P]ulley tackle and hoists other than skip joists; winches and capstans; jacks: Jacks; hoists of a kind used for raising vehicles: Other jacks and hoists, hydraulic.” As products of China, the subject merchandise was also subject to additional ad valorem duties pursuant to U.S. Note 20 to Subchapter III, Chapter 99 (subheading 9903.88.03 and, for entries made between May 10, 2019 and June 15, 2019, 9903.88.09, HTSUS).
ISSUE:
Whether the subject hydraulic jacks are eligible for the Section 301 trade remedy provided for in U.S. Note 20(yy)(73) to Chapter 99, HTSUS, under subheading 9903.88.46, HTSUS?
LAW AND ANALYSIS:
A decision on classification and the rate and amount of duties chargeable is a protestable matter under 19 U.S.C. §1514(a)(2). The subject Protest was timely filed on October 14, 2020, within 180 days of liquidation, pursuant to 19 U.S.C. 1514(c)(3). Further Review of Protest No. 1303-20-102671 is properly accorded pursuant to 19 CFR § 174.24(b), as the Protestant has alleged that the decision against which the Protest was filed involves questions of law and fact that have not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts. Namely, the protestant alleged that the decision to liquidate under subheading 9903.88.03 was inconsistent with the scope of an exclusion to the China 301 trade remedy, and in particular the requirement that the products under the exclusion be composed “of steel”.
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. If the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 will then be applied in order.
As an initial matter, we note that there is no dispute concerning CBP’s classification of the subject merchandise under subheading 8425.42.00, HTSUS, which provides for “[P]ulley tackle and hoists other than skip joists; winches and capstans; jacks: Jacks; hoists of a kind used for raising vehicles: Other jacks and hoists, hydraulic.” We further note that products of China classified under subheading 8425.42.00 HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty under subheading 9903.88.03 or, if applicable, an additional 10 percent ad valorem rate of duty under subheading 9903.88.09, HTSUS. See U.S. Note 20 to Subchapter III, Chapter 99.
Protestant claims that the subject hydraulic floor jacks are excluded from additional duties because they satisfy the exclusion for certain hydraulic automobile jacks provided for under Chapter 99, subchapter III, U.S. note 20(yy)(103) under subheading 9903.88.46, HTSUS.
There are two separate exclusions within Chapter 99 that pertain to hydraulic jacks:
Chapter 99 Note 20(yy)(73): “Hydraulic floor jacks of steel, each measuring not more than 81 cm by 41 cm by 25 cm, weighing not more than 52 kg (described in statistical reporting number 8425.42.0000).
Chapter 99 Note 20(vv)(103): “Hydraulic jacks of a kind for raising vehicles, with a lifting capacity of not more than 550 kg (described in statistical reporting number 8425.42.0000).
As U.S. note 20(vv)(103) under subheading 9903.88.43, HTSUS, is limited to hydraulic car jacks with a lifting capacity of not more than 550 kilograms (1,212.54 lbs), and does not cover floor jacks, the exclusion is inapplicable to the subject merchandise.
U.S. note 20(yy)(73) specifies four requirements to qualify for Section 301 duty exclusion. Each hydraulic floor jack must: 1) be described by statistical reporting number 8425.42.0000; 2) measure not more than 81 cm by 41 cm by 25 cm; 3) weigh less than 52 kg; and 4) be a hydraulic floor jack of steel. As regards the first criterion, as noted supra, there is no dispute the subject hydraulic floor jacks are classified in subheading 8425.42.00, HTSUS. “Jacks” are a named exemplar of heading 8425, HTSUS, and, as such, the subject articles are eo nomine provided for in heading 8425, specifically under subheading 8425.42.00, HTSUS, which provides for “other hydraulic jacks.” The subject articles also satisfy the dimensional and weight criteria set forth in the exclusion, as they measure 61 cm by 30.2 cm by 15.2 cm and weigh 26.4 kg. As regards the fourth and final criterion for the hydraulic floor jack be “of steel,” we note that the subject jacks are composed primarily of steel and aluminum. Note 3, Section XV, HTSUS, provides, in pertinent part, that throughout the tariff schedule, the expression “base metals” includes steel and aluminum. Note 7, Section XV, HTSUS, governs the classification of articles composed of two or more base metals, and states:
Except where the headings otherwise require, articles of base metal (including articles of mixed materials treated as articles of base metal under the General Rules of Interpretation) containing two or more base metals are to be treated as articles of the base metal predominating by weight over each of the other metals.
With respect to the subject jacks, the steel components of the jack account for 68.50% of its weight, as compared to the aluminum component which accounts for 31% of the jack’s weight. Therefore, consistent with Note 7, Section XV, HTSUS, as steel predominates by weight over each of the other metals, the subject hydraulic jacks are treated as articles of steel and satisfy the fourth criterion set forth in the U.S. note 20(yy)(73) and qualifies to be entered under subheading 9903.88.46, HTSUS.
Based on the foregoing, the subject hydraulic jacks are not subject to Section 301 duties under secondary tariff numbers 9903.88.03 or 9903.88.09, HTSUS, as they are eligible for the exclusion provided for in secondary tariff number 9903.88.46, HTSUS, subchapter III to chapter 99, U.S. note 20 (yy)(73), HTSUS. HOLDING:
By application of GRIs 1 and 6, the subject hybrid hydraulic jacks are classified under heading 8425, HTSUS, specifically subheading 8425.42.00, HTSUS, which provides for “[P]ulley tackle and hoists other than skip joists; winches and capstans; jacks: Jacks; hoists of a kind used for raising vehicles: Other jacks and hoists, hydraulic.” The 2019 column one, general rate of duty is free.
Products of China classified under subheading 8425.42.00, HTSUS, unless specifically excluded, are subject to additional ad valorem rates of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03 or 9903.88.09, as applicable, in addition to subheading 8425.42.00, HTSUS, listed above.
The subject hydraulic jacks are eligible for exclusion from Section 301 duties under secondary subheading 9903.88.46. As the HTSUS is subject to periodic amendment, you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheadings. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
You are instructed to ALLOW the protest.
You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division