CLA-2-82:OT:RR:NC:N1: 118
Robert Stang
Husch Blackwell LLP
1801 Pennsylvania Ave., N.W., Suite 1000 Washington, DC 20006
RE: The tariff classification and applicability of Section 301 trade remedies to a 14-Piece Hole Saw Kit assembled in Vietnam with components from Vietnam and China
Dear Mr. Stang:
In your submission, dated June 9, 2023, on behalf of SM Products, LLC d/b/a Spyder Products ("Spyder Products"), you requested a ruling on the tariff classification of a 14-Piece Hole Saw Kit and the application of Section 301 trade remedies.
The merchandise, identified as a Spyder 14pc. Carbide Tipped Hole Saw Kit # 600880, consists of the following:
Eleven tungsten carbide tipped ("TCT") hole saw blades, all of which are manufactured in Vietnam from raw materials sourced in Vietnam. The hole saw blades are used to create precise circular cuts.
Two pilot bits, one High Speed Steel ("HSS") and one TCT, manufactured in China from materials sourced in China. The pilot bits are responsible for drilling a pilot hole, centering the cut, and stabilizing the hole saw.
One arbor adapter ("arbor") manufactured in China from materials sourced in China. The arbor connects the hole saw blade to the pilot bit. The arbor also allows for rapid core ejection, quick diameter changes, angle cuts, and enlargement of existing holes.
You have stated that the 14 pieces will be housed and retailed in a fitted carrying case. You further state that the Vietnam-origin components are fabricated on-site at a Vietnamese facility from a variety of raw materials. The three components from China are shipped to the factory in Vietnam. In Vietnam all 14 components (11 from Vietnam and 3 from China) are placed into the storage case. Thereafter, the storage case is sealed for packing and export to the United States.
The 14-Piece Hole Saw Kit is imported in a single retail package that contains articles that are classifiable under different headings of the tariff. The Explanatory Notes represent the official interpretation of the Harmonized Tariff Schedule (HTS) at the international level. GRI 3 applies when goods are put up for sale collectively and are classifiable under two or more headings of the tariff. GRI 3(b) covers goods put up in sets for retail sale. Explanatory Note X to GRI 3(b) defines "goods put up in sets for retail sale". Such goods: (a) consist of at least two different articles that are classifiable in different headings, (b) consist of products put up together to meet a particular need or carry out a specific activity, and (c) are put up in a manner suitable for sale directly to users without repacking. The subject articles in the 14-Piece Hole Saw Kit, in our opinion, meet the criteria for sets as the terms are defined in the cited Explanatory Note. Therefore, for the purposes of the HTS, the merchandise constitutes a set. Having determined that the items constitute a set for tariff classification purposes, we must decide the essential character. According to the Explanatory Note to GRI 3(b), essential character may be determined by the nature of the material or component, its bulk, quantity, weight, or value, or by the role of the constituent material in relation to the use of the goods. In this case, we find that eleven tungsten carbide tipped ("TCT") hole saw blades impart the essential character to the 14-Piece Hole Saw Kit.
The applicable subheading for the Spyder 14pc. Carbide Tipped Hole Saw Kit # 600880 will be 8202.99.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for handsaws, and metal parts thereof; blades for saws of all kinds (including slitting, slotting or toothless saw blades), and base metal parts thereof: other saw blades, and parts thereof: other (including parts). The general rate of duty will be free.
You also inquired as to whether the 14-Piece Hole Saw Kit is subject to the Section 301 Trade Remedy. Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. Subsequently, USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710) and August 16, 2018 (83 F.R. 40823). Products of China that are provided for in subheading 9903.88.01, 9903.88.02 or 9903.88.03 and classified in one of the subheadings enumerated in U.S. note 20(b) or U.S. note 20(d) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings. Guidance in a situation where sets packaged for retail sale are involved is provided on the CBP website in “Section 301 Trade Remedies Frequently Asked Questions”. The answer to “How are the Section 301 duties assessed in respect to ‘sets’ covered by the Section 301 duty?” reads, in pertinent part, as follows:
When importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set (i.e. the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy, then the entire set will be subject to the additional 25% duties. If the HTSUS provision under which the entire set is classified is not covered by the Section 301 remedies, but the set contains components that are classified in a subheading covered by the 301 list, the 301 duties will not be assessed on the individual components.
Following this guidance, the product, i.e., the hole saw blades, that (1) imparts the essential character to the tool sets, and (2) by which the HTSUS provision under which the complete sets are to be classified, is a product of Vietnam. Thus, the Spyder 14pc. Carbide Tipped Hole Saw Kit # 600880 will not be subject to the Section 301 remedy.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Anthony Grossi at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division