The country of origin of a utility cart

N337134 January 17, 2024 OT:RR:NC:N2:206 CATEGORY: Origin Laura Oliver A. N. Deringer 173 West Service RoadChamplain, NY 12919 RE:  The country of origin of a utility cart Dear Ms. Oliver: In your letter dated December 18, 2023, you requested a country of origin ruling on a utility cart, which you filed on behalf of your client Meridian International Co. The article under consideration is a wheeled garden utility cart. You state that the utility cart is used as a vehicle for moving heavy items from one place to another. The subject utility cart consists of three main components: a plastic base, metal handle and frame, and plastic wheels. 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). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In Uniroyal case, the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe." In the present case, the plastic base is made in Thailand with high-density polyethylene (HDPE) sourced from Thailand. The plastic base is then imported into China. The frame and wheel component assemblies are manufactured in China. Chinese sourced raw steel is used to manufacture the handle, stator and wheel frame by bending and punching. The metal handle and stator are welded together. China sourced powder coating is sprayed onto the handle using a spraying machine. China sourced polypropylene is put through an injection machine to produce the plastic wheels. The handle is then attached to the Thailand-sourced plastic base, and wheels are attached to the bottom of the base to create the finished utility cart. The finished product is packed into a carton for shipping. You state that you believe that the country of origin of the utility cart is Thailand because its character is imparted by the Thailand sourced plastic base. We disagree. You cited two cases as precedents in supporting your assertion. These rulings do not apply to the case at issue, since they dealt with the essential character for classification purposes. Please note that the analysis for determining the classification of goods is not controlling when it comes to origin determinations. However, we will address each ruling. The garden caddy described in ruling NY N236443, dated December 21, 2012, is not similar to the garden utility cart at issue. The garden caddy’s main function was to hold and organize garden tools, and not to transport them. The two wheels in the garden caddy were for easy movement.  Thus, it was classified in subheading 9403 of the Harmonized Tariff Schedule of the United States (HTSUS), as furniture, with the essential character of the caddy for classification purposes correctly identified as the base. However, the garden cart under consideration is designed to transport goods. As a result, the wheels carry as much importance as the base. A similar analysis applies for the hose reel trolley of ruling NY 808014, dated April 12, 1995. The essential character of the trolley is its plastic reel because the function of the reel is to hold a garden hose wound around it. The wheels are subsidiary to the base. Thus, it was classified in subheading 3904, HTSUS, as a household article of plastic, with the essential character of the trolley for classification purposes correctly identified as the reel. Although the manufacturing operations in China of the Chinese components appear to be complex, the actual assembly of the base, wheels, and the handle do not render the substantial transformation of the components. As a result, we need to identify the character of the utility cart. As we stated above, the cart cannot function as a cart without its wheels and its base. Since the final assembly occurs in China and the value of the Chinese components with labor is higher than that of the Thai base, the country of origin for the utility cart will be China. 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 liana.alvarez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division