The tariff classification and eligibility for partial duty exemption of laminated truck flooring made in China

N325290 April 19, 2022 CLA-2-44:OT:RR:NC:N4:434 CATEGORY: Classification TARIFF NO.: 4421.99.9880; 9903.88.03 Kim Tao Mason Floors, Inc. 5940 S. Rainbow Blvd. 400 #79525 Las Vegas, NV 89118 RE: The tariff classification and eligibility for partial duty exemption of laminated truck flooring made in China Dear Ms. Tao: In your letter, dated April 7, 2022, you requested a tariff classification and eligibility for a partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), on laminated wood flooring used in trucks and trailers. Detailed information on the product and manufacturing operations were provided for our review. The finished flooring panels consist of red oak laminated boards connected end-to-end by finger jointing and side-to-side by edge gluing. The panels will come in varying sizes, measuring between 1058-15898 mm in length by 103-350 mm in width by 28-35 mm in thickness with lap joinery on both edges. First, we will address classification. The applicable subheading for the truck flooring will be 4421.99.9880, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other articles of wood: Other: Other: Other: Other: Other.” The rate of duty will be 3.3 percent ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current. Next we examine the eligibility of 9802.00.80, HTSUS, which provides a partial duty exemption for articles assembled abroad in whole or in part of fabricated components, the product of the United States, which: (a) were exported in condition ready for assembly without further fabrication; (b) have not lost their physical identity in such articles by change in form, shape or otherwise; and (c) have not been advanced in value or improved in condition abroad except by operations incidental to the assembly process such as cleaning, lubrication, and painting. All three requirements of subheading 9802.00.80, HTSUS, as spelled out in (a) (b) (c) above, must be satisfied before a returning good may receive a duty allowance. The definition of “fabricated components” as applicable to 9802.00.80, HTSUS, can be found in 19 CFR 10.14(a). An article entered under this tariff provision is subject to duty upon the full cost or value of the imported assemble article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24). You describe the manufacturing process as follows: red oak lumber measuring from1800-5000 mm in length by 76-550 mm in width by 25.4 mm in thickness are sourced in the United States. The U.S. lumber is shipped to mainland China where the lumber is cut into strips; all defects, such as knots and cracks, are removed; finger joint tenons are machined at the two ends of each strip; the strips are connected in length by finger joints and bonded together side-by-side with melamine glue. Finally, the panels are grooved along the edges and planed before packaging. You add that the raw material red oak makes up approximately 85% of the cost of the final product. The U.S. lumber is subjected to manufacturing operations in China that constitute further fabrication and are not mere assembly operations allowable under 9802.00.80, HTSUS. They have lost their physical identity by change in form, shape or otherwise, and have been advanced in value or improved in condition abroad by operations more than incidental to the assembly process. Accordingly, the scenario presented for sending lumber from the United States for further manufacturing processing in China fails to meet the requirements for treatment under subheading 9802.00.80, HTSUS. Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 4421.99.9880, HTSUS, unless specifically excluded, are subject to an additional 25% percent ad valorem rate of duty.  At the time of importation, you must report the Chapter 99 subheading, 9903.88.03, in addition to subheading 4421.99.9880, HTSUS, listed above. The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.  For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively. 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, contact National Import Specialist Charlene Miller at charlene.s.miller@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division