The country of origin of an electric air pump for the purposes of 301 Trade Remedies

N324931 April 19, 2022 CLA-2-84:OT:RR:NC:N1:102 CATEGORY: Origin Heather Litman Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 707 Wilshire Blvd., Suite 4150 Los Angeles, California 90017 RE: The country of origin of an electric air pump for the purposes of 301 Trade Remedies Dear Mr. Litman: In your letter dated March 21, 2022, you requested a country of origin ruling on behalf of your client, Intex Recreation Corp. Descriptive information was provided with your request. Electric air pumps, series 666XX electric air pumps, are used to inflate plastic articles, such as air mattresses, pool floats, and inflatable furniture. The four pumps primarily consist of a motor, a pump housing, a vane, a cavity shell, a pump cover, and a top cover. The electric air pumps are similar in design, but differ in how they are powered, either receiving power from batteries, or via a power cord that is designed to connect to a cigarette lighter socket or a wall outlet. In operation, the user attaches an appropriately sized nozzle onto the air pump, which is then attached to the article that will be inflated. The air pumps are packaged with a variety of accessories, including nozzles, hoses, adaptors, and for some series, batteries. With regard to country of origin for the purposes of 301 Trade Remedies, each electric pump is assembled in Vietnam from Vietnamese-origin sheet steel and Chinese-origin small parts, including shafts, wires, bushes, etc. The motor is assembled in Vietnam and begins by stamping steel sheets from Vietnam into star-shaped rounds. Afterwards, the rounds are stacked and laminated together. The laminated rounds are then assembled to a Chinese shaft, insulation stars and a Chinese commutator to form the rotor core. Afterwards, Chinese wire is wound around the stator and a Chinese slot chock is inserted and welded into place. The rotor assembly is joined to a cooling fan, and insulation. Insulating glue is applied. The assembly process continues in Vietnam, with the stator housing being stamped and formed from a Vietnamese steel sheet. The housing is then joined with a Chinese caliper and magnets to form the stator housing assembly. Next, a washer assembly is joined to the rotor assembly. The connected washer and rotor assembly are inserted into the stator housing. Plastic end caps are connected. The motor is then magnetized, sealed and welded to a Chinese PCB assembly. Various inspections, and tests are completed on the motor. Afterwards, a Chinese vane is press-fitted onto the motor. The motor and vane are then assembled to a Chinese top cover and Chinese cavity, which is subsequently inserted into the Chinese air pump housing. The components are screwed into place and the necessary wiring connections are made to the housing and Chinese switch. The Chinese power cord is then installed and connected to the necessary wiring. Each completed air pump is inspected, tested and packaged with Chinese accessories: nozzles and additional accessories. The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, 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.” For tariff purposes, 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). The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character and use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). 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.” 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. For the electric air pump, components from Vietnam and China are joined or assembled to each other in Vietnam during the final assembly of the pump. As described above, the assembly processes in Vietnam are not complex and do not result in a substantial transformation of the components, i.e., press-fitting of the Chinese vane onto the motor. In HQ rulings H303864, dated December 26, 2019, and H318255, dated November 3, 2021, CBP explains that the assembly operations to make pumps, such as the press-fitting of components, are regarded as being rather simple. It is our view that the origin of the electric air pump, for the purposes of Section 301 Trade Remedies, is determined by its essence, the motor. Based on the information provided, it is our opinion that the origin of the motor is Vietnam.  It is stated that the rotor and stator, which are the dominant components of the motor, are manufactured in Vietnam.  The rotor cores are produced in Vietnam by stamping the steel, which are then stacked and laminated together.  Also in Vietnam, the stator is assembled by combining a Vietnamese origin sheet steel with a Chinese origin caliper and magnets.  Therefore, we can determine that the origin of the motor is Vietnam. Thus, as the country of origin of the motor is Vietnam, the country of origin of the electric air pumps, series 666XX electric air pumps, is Vietnam for the purposes of 301 Trade Remedies. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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.  You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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, contact National Import Specialist Sandra Martinez at Sandra.martinez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division