The tariff classification and applicability of Section 232 additional duties of stainless steel coils

N354071 October 2, 2025 CLA-2-72:OT:RR:NC:N5:117 CATEGORY: Classification TARIFF NO.: 7220.90.0015; 9802.00.60 Mary C. MacLeod North American Stainless Canada Inc. 740 Imperial Rd. N Guelph, Ontario NK1Z3 Canada RE: The tariff classification and applicability of Section 232 additional duties of stainless steel coils Dear Ms. MacLeod: In your letter dated September 22, 2025, you requested the tariff classification and the applicability of Section 232 additional duties of steel coils. The products under consideration are Type 304 stainless steel coils made to ASTM A240. These cold-rolled, annealed coils have a thickness of .0495 inch (1.25 mm), a width 13.21 inches (335.53 mm), and have a PVC coating on one side. The coils will ultimately be used to make step rails for pickup trucks. You suggest classification of the subject coils in subheading 7220.20.1015, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Flat-rolled products of stainless steel, of a width of less than 600 mm: Not further worked than cold-rolled (cold-reduced): Of a width of 300 mm or more: Containing more than 0.5 percent but less than 24 percent by weight of nickel: Other. We disagree. The stainless steel coils have been further worked (coated) and are more specifically provided for elsewhere in heading 7220, HTSUS. The applicable subheading for the plastic-coated stainless-steel coils will be 7220.90.0015, HTSUS, which provides for Flat-rolled products of stainless steel, of a width of less than 600 mm: Other: Containing more than 0.5 percent but less than 24 percent by weight of nickel: Other.” The rate of duty will be free. According to your submission, 43” (1092.2 mm) master stainless steel coils of United States (U.S.) origin melted and poured in the U.S. are shipped to Canada from your parent U.S. mill where they are slit to the customer’s specifications and a protective plastic coating is applied. The cut coils are then shipped to the U.S. where they are made into step rails for pickup trucks. Upon review of the submitted documents, this office finds that the stainless steel coils are eligible for a partial duty exemption. Subheading 9802.00.60, HTSUS, provides a partial duty exemption for: Any article of metal (as defined in U.S. note 3(e) of this subchapter) manufactured in the United States or subject to a process of manufacture in the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing. Subheading 9802.00.60, HTSUS, therefore imposes four requirements: (1) the merchandise must be an article of metal; (2) the metal must either be manufactured in the United States or subject to a process of manufacture in the United States; (3) the metal must be exported for further processing; and (4) the metal must be returned to the United States for further processing. For purposes of subheading 9802.00.60, HTSUS, “metal” includes “base metals enumerated in note 3 to section XV,” which in turn includes steel. See U.S. Note 3(f) to Chapter 98, HTSUS. In this case, all four requirements for subheading 9802.00.60, HTSUS, are met. The U.S. made stainless steel coils are exported for further processing and, after return to the U.S., are further processed in the U.S. where they are made into step rails. Thus, the stainless steel coils may be classified under this tariff provision with duty assessed only on the value of the processing performed outside the U.S., provided there is compliance with the documentary requirements of § 10.9, Customs and Border Protection (CBP) Regulations (19 CFR 10.9). Since the coils are manufactured in the U.S., they are not subject to Section 232 additional duties upon their return to the U.S. under subheading 9802.00.60, HTSUS. When determining the country of origin for purposes of applying current trade remedies under Section 301 (insert Section 301, Section 201, or Section 232, as appropriate), the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“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 National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). You state that the U.S. origin master coils are sent to Canada where they are slit and a protective plastic coating is added. This office finds that the processes (slitting and coating) performed in Canada do not result in a substantial transformation. As such, the country of origin for purposes of applicability of trade remedies is the U.S. Since the coils are of U.S. origin, they are not subject to Section 232 trade remedy duties. The tariffs and additional duties cited above are current as of this ruling’s issuance. 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 at https://hts.usitc.gov 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 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 Denise Hopkins at denise.hopkins@cbp.dhs.gov. Sincerely, (for) Denise Faingar Designated Official Performing the Duties of the Division Director National Commodity Specialist Division