The country of origin of trailer wheels

N320503 August 5, 2021 MAR-2:OT:RR:NC:N2:206 CATEGORY: Country of Origin Ting-Ting Kao White & Case LLP 701 Thirteenth Street NW Washington, DC 20005 RE: The country of origin of trailer wheels Dear Mr. Kao: This is in response to your letter dated July 13, 2021, requesting a ruling on the country of origin of trailer wheels for marking purposes and for purposes of applying trade remedies under Section 301 of the Trade Act of 1974, as amended, from China, which you filed on behalf of your client, Asia Wheel Co., Ltd. (Asia Wheel). The products under review are steel trailer wheels, which are comprised of a wheel disc that has been pressed and welded into a wheel rim. The finished trailer wheels are painted according to customer specifications. You state that Asia Wheel imports rectangular steel plates from China or another country into Thailand. In Thailand, the rectangular steel plates are made into the rims and discs. The rims go through the following manufacturing steps: coiling, butt-welding, slag removing, weld polishing, flexpanding, first, second, and third rolling, final expanding, and valve hole punching. The discs undergo die cutting, first drawing, flanging, bolt holes punching, 60-degree forming, central hole punching, and vent holes punching. After these processes, Asia Wheel welds the rims and discs to assemble steel trailer wheels and paints the trailer wheels according to customer specifications. 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.” The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).Further, in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, 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, “…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, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. In the present case, the steel rectangular plates imported into Thailand undergo a substantial physical change to become trailer wheels. As a result, the substantial transformation of the steel plates into the trailer wheels occurs in Thailand. Therefore, the country of origin of the trailer wheels will be Thailand for marking purposes and for purposes of applying trade remedies under Section 301, of the Trade Act of 1974, as amended. 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.” This ruling is being issued under the provisions of Part 177 of the Customs 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 liana.alvarez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division