OT:RR:NC:N2:206
Hongcheol Jeong
CTR Co., Ltd.
551 Gongdan-ro, Seongsan-gu, Changwon-si Chanwon City, 51557 South Korea
RE: The country of origin of an inner and an outer tie rod
Dear Mr. Jeong:
In your letter dated June 24, 2024, you requested a country of origin ruling on inner and outer tie rods.
The articles under review are the Inner Tie Rod and Outer Tie Rod (tie rods) used in passenger vehicles. You state that the tie rods are essential components that connect the steering rack and the steering knuckle, all of which are directly connected to the vehicle's steering system. They serve two main functions: connecting the steering mechanism to the wheels and maintaining proper wheel alignment. The tie rods are found on each front wheel and join the steering gear to the steering knuckle, transferring the steering force of the driver turning the steering wheel through the steering mechanism, allowing for the movement of the steering mechanism, to direct the vehicle as intended.
Theinner tie rodserves as the starting point and consists of a threaded shaft that connects to theouter tie rodend. This threaded shaft allows for adjusting the overall length of the tie rod, which is essential for achieving the proper alignment of the front wheels. This adjustment ensures optimal tire wear and provides stable handling for the vehicle. Theouter tie rodend is responsible for linking the tie rod assembly to thesteeringknuckle. It is comprised of aball jointenclosed within a housing, enabling flexibility and rotational motion. Theouter tie rodend transfers thesteeringinput received from theinner tie rodend to thesteeringknuckle, resulting in the desired wheel movement.
Based on the bill of materials (BOM) supplied to this office with your request, there are two manufacturing scenarios:
In Scenario 1, the inner tie rod contains a ball pin and inner tie rod socket of Chinese origin, and a ball seat of Korean origin. The outer tie rod consists of a ball stud and outer tie rod socket of Chinese origin, and a ball seat, boot, plug, clamp ring, and protective cover of Korean origin.
In Scenario 2, the inner tie rod is comprised of the ball pin and ball seat from Korea, and the inner tie rod socket from China. The outer tie rod consists of the outer tie rod socket from China, and the rest of the components from Korea.
In both scenarios, all components are imported into Mexico for final assembly into the inner and outer tie rods.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
The "country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin."
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. 102.21. See 19 C.F.R. 102.11.
Applied in sequential order, 19 CFR Part 102.11(a) provides that the country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The tie rods are neither "wholly obtained or produced" nor "produced exclusively from domestic materials." Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the tie rods, and paragraph (a)(3) must be applied next to determine the origin of the finished article. The tie rods are classified under subheading 8708.94, Harmonized Tariff Schedule of the United States (HTSUS). The tariff shift requirement in Part 102.20 for the tie rods at issue states:
A change to parts for steering systems of tractors suitable for agricultural use, parts for steering systems of other tractors (except road tractors), parts of cast-iron or to other parts for steering systems from any other good of subheading 8708.94 or from any other subheading, except from parts or accessories of the goods of subheading 8708.40, 8708.50, 8708.80, 8708.91, 8708.92, or 8708.95 through 8708.99; or
A change to any other good of subheading 8708.94 from parts for steering systems of tractors suitable for agricultural use, parts for steering systems of other tractors (except road tractors), parts of cast-iron or from other parts for steering systems of subheading 8708.94, except when the change is pursuant to General Rule of Interpretation 2(a), or from any other subheading, except from parts or accessories of the goods of subheading 8708.40, 8708.50, 8708.80, 8708.91, 8708.92, or 8708.95 through 8708.99, when that change is pursuant to General Rule of Interpretation 2(a).
Since the tie rods are parts of steering systems, only the first rule applies. Here, we have several parts that are classified within subheading 8708.94, HTSUS. Thus, the tariff shift is not met. As a result, Part 102.11(a) does not apply.
Section 102.11(b) states, in relevant part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation [("GRI")] 3, where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good.
In determining the "essential character" of the finished good, Section 102.18(b)(1) provides, in relevant part:
(b) (1) For purposes of identifying the material that imparts the essential character to a good under Part 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under Part 102.20 specific rule or other requirements applicable to the good (ii) Materials that may be considered include materials produced by the producer of the good and incorporated in the good. For example, if a producer of a good purchases raw materials and converts those raw materials into a component that is incorporated in the good, that component is a material that may be considered for purposes of identifying the materials that impart the essential character to the good, provided that the component is classified in a tariff provision from which a change in tariff classification is not allowed under the specific rule
In Scenario 1, all components of the inner and outer tie rods that are classified in a tariff provision from which a change in tariff classification is not allowed are of Chinese origin. Accordingly, the country of origin of the tie rods for marking purposes is China.
In Scenario 2, the inner tie rod contains the Korean ball pin and the Chinese inner tie rod socket that are classified in subheading 8708.94, while the outer tie rod contains the Korean ball stud and the Chinese outer tie rod socket, classifiable in 8708.94. Since there are multiple countries of origin for the components from which a change in tariff classification is not allowed, we must apply Section 102.18(b)(2), which states:
(b) (2) For purposes of determining which one of two or more materials described in paragraph (b)(1) of this section imparts the essential character to a good under Part 102.11, various factors may be examined depending upon the type of good involved. These factors include, but are not limited to, the following:
(i) The nature of each material, such as its bulk, quantity, weight or value; and
(ii) The role of each material in relation to the use of the good.
According to the BOM supplied, the Korean ball pin in the inner tie rod is the bulkiest component and has the highest value compared to the rest of the components. As a result, the country of origin of the inner tie rod for marking purposes in Scenario 2 is South Korea.
The outer tie rod includes the Chinese outer tie rod socket that has the highest value and the Korean ball stud, which is the bulkiest compared to the rest of the components. Although both components play a significant role in the function of the outer tie rod, it is the outer tie rod socket that swivels the wheels left and right during steering, while the ball stud allows for smooth swiveling. As a result, the essential character of the outer tie rod is the outer tie rod socket. Therefore, the country of origin of the outer tie rod for marking purposes is China in Scenario 2.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division