The tariff classification, country of origin, and eligibility under the United States-Mexico-Canada Agreement (USMCA) of prefabricated electrical buildings (E-Houses)

N362808 July 21, 2026 CLA-2-85:OT:RR:NC:N2:220 CATEGORY: Origin Mannie Birk CN Customs Brokerage Services USA Inc. 17642 S Ashland Avenue Homewood, IL 60430-1339 RE: The tariff classification, country of origin, and eligibility under the United States-Mexico-Canada Agreement (USMCA) of prefabricated electrical buildings (E-Houses) Dear Mr. Birk: In your letter dated July 1, 2026, you requested a ruling on behalf of your client, Pembina Midstream (USA) Inc, for E-Houses. There are two items under consideration in your request, which are individually identified as the Wheaton E-House and the Rogers E-House and further described as prefabricated electrical buildings designed to house and support the operation of electrical equipment including a variable frequency drive (VFD), high voltage transformers, switchgear, motor control center (MCC), HVAC system, programmable logic controller (PLC), automatic transfer switch, and other minor electrical components such as electrical wiring and battery backup systems. Once installed, the E-Houses provide centralized and secured electrical infrastructure at hydrocarbon liquids and natural gas pump stations. You state that the primary purpose is to provide power to and control for AC motors that drive the pumps at the pump station. We note that power is supplied directly from the electrical grid and the E-House does not generate electricity on its own. After importation, both E-Houses will have transformers and HVAC control panels installed on site. These items are not included in the importation of the E-Houses. The provided technical specifications indicate that the maximum voltage of the E-Houses is 480 V. In your request, you state that the manufacturing process for the E-Houses occurs in Canada. Structural building components and electrical equipment are imported into or sourced directly from Canada. The building structure is fabricated and assembled, then the electrical equipment is installed within the structure and tested for proper functionality. The finished E-House is then exported to the United States where it is installed at the pump station site, connected to the power grid and the transformers and HVAC control panels are added. Classification The applicable subheading for the E-Houses will be 8537.10.9170, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity…: For a voltage not exceeding 1,000 V: Other: Other: Other.” The general rate of duty will be 2.7 percent ad valorem. Origin With respect to the origin, both E-Houses are globally sourced products, integrating components from numerous countries to create finished electrical control and distribution apparatuses. While some components, including transformers, motor control centers, and PLC control panels are sourced from Canada, and building fabrication takes place in Canada, other components originate from the United States, Mexico, Austria, Korea, Taiwan, and China. Specifically, the VFD is from Austria. The switchgear and automatic transfer switch are from Mexico. The PLC hardware, UPS, batteries, and HVAC control panels are from the United States. The structural and architectural components originate from Korea, Canada, Taiwan, and China. Each E-House begins assembly in Canada with the fabrication of the structural steel framed building, which serves as the base upon with all electrical apparatus are assembled. The various electrical components described above are fitted into the building and connected with electrical wiring. Finally, all equipment within the building, along with the associated interconnected wiring, is tested to confirm functionality. When determining the country of origin for purposes of applying current trade remedies under Section 122 and additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter 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). Concerning the country of origin of the E-Houses, it is our opinion that each of the foreign components are substantially transformed in Canada when integrated into the finished articles. While there are key components essential to the functionality of each E-House (such as the VFD, switchgear, automatic transfer switch, UPS system, etc.) that are produced outside of Canada, it is not until all the components are fully assembled in Canada that a functional E-House assumes the shape, character and use of the finished article. Accordingly, the origin of both E-Houses is Canada. USMCA Eligibility The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note ("GN") 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a "good originating in the territory of a USMCA country" only if- (i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; (ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; (iii) the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); As the subject E-Houses contain non-originating goods, they are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i). Additionally, under GN 11(b)(ii), the E-Houses are not goods produced entirely in Canada exclusively from originating materials. Therefore, we must determine whether the non-originating materials undergo the tariff shift and other requirements provided for in GN 11(b)(iii) and GN 11(o). The applicable tariff shift rule for goods classified under heading 8537, HTSUS, states, in relevant part: 1. (A) A change to heading 8537 from any other heading, except from printed circuit assemblies of subheading 8538.90 or moulded parts of subheading 8538.90 Based on the information provided, the Austrian VFD, the Korean corrugated steel, Taiwanese rim exit device, Chinese rim cylinder and Chinese closer would be classified outside of heading 8537, HTSUS, as well as outside of the noted subheading within the rule. As such, the non-originating items satisfy the tariff shift rule. The E-Houses are eligible for preferential treatment under the USMCA upon importation to the United States. 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 Gary Chaffee at gary.chaffee@cbp.dhs.gov. Sincerely, (for) James P. Forkan Director National Commodity Specialist Division