Revocation of NY N302378 and NY N331974; Country of origin of a brake hose

H325607 August 29, 2025 OT:RR:CTF:VS H325607 RRB CATEGORY: Origin Stephen Michael Ridolphi J Juan Brake Systems C/ Miguel Servet, 21-23 Gava-Barcelona, 08850 Spain RE: Revocation of NY N302378 and NY N331974; Country of origin of a brake hose Dear Mr. Ridolphi: This is to inform you that U.S. Customs and Border Protection (“CBP”) has reconsidered New York Ruling Letter (“NY”) N302378, dated February 15, 2019, concerning the country of origin marking of Teflon and Nylon steel-braided brake hoses. We have also reconsidered NY N331974, dated May 3, 2023, which addresses the country of origin for duty purposes of substantially similar merchandise. For the reasons set forth below, we hereby revoke NY N302378 and NY N331974 with respect to the country of origin marking and country of origin for duty purposes, respectively, of the subject brake hoses. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke NY N302378 and NY N331974 was published on July 2, 2025, in Volume 59, No. 27 of the Customs Bulletin. No comments were received in response to the proposed action. FACTS: In NY N302378, the brake hoses at issue were described as follows: The two items under consideration have been identified as Teflon Steel-Braided Hoses and Nylon Steel-Braided Hoses. You state in your request that the Teflon and Nylon hoses with steel wire braided around are produced in Spain. The raw materials, such as Teflon, Nylon, and steel wire are supplied by European companies. After the hoses are unpacked, they are put through machines, where the steel wire is braided around it. Finally, the outer nylon cover is extruded on top at the Spanish supplier. Once the outer sheath is extruded on the tubes, it is then repackaged for shipment to your facility in China. In China, the brake hoses are assembled with steel fittings and/or ZAMAK clamps, the latter of which are supplied by European companies. Once this simple assembly is complete the braided brake hoses are packaged for shipment to the United States. In NY N302378, CBP found that the merchandise was substantially transformed in China such that the country of origin for marking purposes was China. In NY N331974, the brake hoses at issue were described as follows: In your request, you state that this Front Brake Hose is used on Harley Davidson motorcycles. It is assembled in Thailand from materials/components from Thailand, Japan, China, Germany, United States and Poland. Descriptive literature and pictures were provided with your request. The item under consideration has been identified as Part# 000-S22-1H3 (Motorcycle Front Brake Hose). The Front Brake Hose has an inner tube made of fluorine resin, SUS wire braiding and thermoplastic urethane outer cover. The brake hose assembly is comprised of subassemblies L2ASSY and L1ASSY. These assemblies are comprised of: 1) Hoses 2) Pipe Fittings 3) Banjo Fittings 4) Flange Bearings 5) Shrink Tube 6) Grommets 7) Bolts 8) Washers 9) Brackets 10) 3M Tape The finished Front Brake Hose assembly is used to deliver braking force to the brake pads via hydraulic pressure and brake fluid. You state that the Front Brake Hose assembly is composed primarily of bulk roll Japanese origin hose (fluorine resin, SUS wire braiding and thermoplastic urethane outer cover), which is imported into Thailand where it is cut to specific length and then crimped. Additionally, you state that the fittings used are imported into Thailand from China, Germany, United States and Thailand. The finished brake hoses are then packaged for export to the United States. In NY N331974, CBP found that the merchandise was substantially transformed in Thailand such that the country of origin for duty purposes was Thailand. ISSUE: What is the country of origin of the subject brake hoses for marking and duty purposes? 2 LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940). The regulations implementing the requirements and exceptions to 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) provides as follows: “Country of origin” means 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; …. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling (“HQ”) H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments, Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). To determine whether a substantial transformation occurs, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post- assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative. The Court of International Trade more recently interpreted the meaning of “substantial transformation” in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016). Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight. All of the components of the flashlight were of 3 Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States and assembled into the finished Generation II flashlight. The Energizer court reviewed the “name, character and use” test utilized in determining whether a substantial transformation had occurred and noted, citing Uniroyal, Inc. v. United States, 3 C.I.T.220, 226 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post- importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 312 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In HQ 561392, dated June 21, 1999, CBP considered the country of origin marking requirements of an insulated electric conductor which involved an electrical cable with pin connectors at each end used to connect computers to printers and other peripheral devices. The cable and connectors were made in Taiwan. In China, the cable was cut to length and connectors were attached to the cable. CBP held that cutting the cable to length and assembling the cable to the connectors in China did not result in a substantial transformation. In NY N336508, dated December 5, 2023, CBP addressed the country of origin of two types of hoses used to connect a variety of appliances (e.g., washing machines, dishwashers, and ice makers) to water sources. The first item consisted of a polyvinyl chloride (“PVC”) hose reinforced with braided stainless steel, with fittings, while the second item consisted of a PVC hose reinforced with polymer, with fittings. The first manufacturing phase for these hoses took place in either Taiwan or Thailand, where the hoses were extruded from white PVC, braided with polyester reinforcement, and coated with clear PVC resin. The hoses were then spooled onto rolls for shipment to China for further processing. In China, the hoses underwent a second manufacturing phase, during which the hoses were reinforced by braiding with either AISI 304 stainless steel or a polymer material in lieu of stainless steel around the hoses. The hoses were also cut to length, fittings were attached, and they were packed for shipment. CBP held that the reinforcement with braided materials, cutting to length, and the addition of Chinese fittings in China did not substantially transform the hose. Accordingly, CBP held that the country of origin of the finished hose with fittings was either Taiwan or Thailand. In holding as such, CBP cited to NY N211518, dated April 25, 2012. There, CBP noted that in determining the country of origin marking requirements for rubber and plastic hoses, the imported hose is not substantially transformed as a result of cutting to length and attaching fittings. In NY N335595, dated October 4, 2023, CBP also addressed the country of origin of hoses from Thailand that were used to connect a washing machine to a water source in the home. The hoses at issue in NY N335595 were composed of extruded PVC, reinforced with a braided stainless-steel sleeve and fitted on both ends with brass fittings. During the first manufacturing phase in Thailand, PVC resin was extruded to form a PVC hose, which was then spooled onto rolls for shipment and further processing. During the second manufacturing phases, the rolls of hose were shipped to China, where they were reinforced by braiding stainless steel around the hoses. The hoses were then cut to 4 length, and brass fittings were attached. Finally, the finished hoses were packed for shipment. As in NY N336508, CBP held that the reinforcement with braided materials, cutting to length, and the addition of Chinese fittings in China did not substantially transform the hose, again citing to NY N211518 in support of its determination. While HQ 561392 concerned the country of origin of an electrical conductor cable rather than hoses, we believe that the substantial transformation analysis for both commodities is analogous. Like the subject brake hoses, manufacture of electrical conductor cables involve cable that is produced in one country but cut to length with connectors attached in a second country. And with both electrical cable conductors and hoses, cutting the cable or hose to length and attaching fittings or connectors does not change the fundamental character of the final merchandise under the name, character and use test. Accordingly, CBP correctly applied the analysis in HQ 561392 and NY N211518 —that cutting the cable or hose to length and attaching connectors or fittings to the cable or hose did not result in a substantial transformation—to the hoses in NY N336508 and NY N335595. Therefore, it is unclear why CBP departed from that analysis in NY N302378 and NY N331974, which involved hoses manufactured in a substantially similar manner as the hoses in NY N336508 and NY N335595, albeit with different commercial applications. In NY N331974, bulk roll Japanese-origin hose, comprised of fluorine resin, SUS wire braiding, and a thermoplastic urethane outer cover, was imported into Thailand where it was cut to specific length, and fittings, bolts, and grommets were attached to the hose before it was packaged and shipped to the United States, where they will be used as brake hoses on Harley Davidson motorcycles. In NY N302378, the bulk rolls were first manufactured in Spain by braiding steel wire around Teflon and Nylon hoses, followed by extrusion of the outer nylon cover on top of the hose, before it was repackaged in spools for shipment to China, where the hoses were cut to specific length and assembled with steel fittings or clamps for use as brake hoses. Unlike in NY N336508 and NY N335595, where steel wire was braided onto the hoses in the same country as where the hose was cut to length and fittings were attached, even more of the manufacturing of the subject brake hoses at issue happened during the first manufacturing phase before the hose was cut to length and fittings were attached in the final manufacturing phase. In particular, the brake hoses at issue underwent more extensive manufacturing during the first phase when steel wire was braided onto the hoses and the outer nylon cover was extruded on top of the hoses before they were shipped to China in NY N302378 and to Thailand in NY N331974, where they were cut to length and fittings were attached. By the time the brake hoses were shipped to China or Thailand for additional processing, they were no longer simply bulk spools of hose. The steel wire braided reinforcement and extruded plastic cover established the fundamental character of the merchandise as brake hoses. Moreover, based on CBP practice, cutting the brake hose to length and attaching fittings to the brake hose does not substantially transform the brake hoses. Accordingly, CBP should have continued to apply its long-standing position regarding the types of manufacturing operations that will substantially transform hoses and similar merchandise (e.g., the electrical cable in HQ 561392) for purposes of country of origin. Therefore, like the electrical cable in HQ 561392 and the hoses in NY N211518, NY N336508 and NY N335595, we find that cutting the brake hoses to length and attaching fittings to the brake hoses in China in NY N302378, and in Thailand in NY N331974, did not substantially transform the merchandise. 5 HOLDING: Based on the facts provided, the brake hoses in NY N303378, consisting of Teflon and Nylon hoses with steel wire braided around it, followed by extrusion of the outer nylon cover on top of the hose in Spain, are not substantially transformed when they are cut to specific length and fittings are attached in China. Based on the facts provided, the Japanese-origin brake hoses in NY N331974, consisting of fluorine resin, SUS wire braiding and a thermoplastic urethane outer cover, are not substantially transformed when they are cut to specific length and fittings are attached in Thailand. EFFECT ON OTHER RULINGS: NY N302378, dated February 15, 2019, and NY N331974, dated May 3, 2023, are hereby REVOKED. This ruling will become effective 60 days from the date of publication in the Customs Bulletin. Sincerely, Yuliya A. Gulis, Director Commercial and Trade Facilitation Division Cc: QingQing Zhuge Kintetsu World Express 145-68 228th Street, Unit 1 Springfield Gardens, Queens, NY 11413 6