N350046

N350046 July 10, 2025 CLA-2-84:OT:RR:NC:N1:164 CATEGORY: Classification; Origin; Marking TARIFF NO.: 8466.10.0175; 9903.01.25 Fay Jin Great Star Industrial USA, LLC 9836 Northcross Center Court, Suite A Huntersville, NC 28078 RE: The tariff classification, country of origin, and marking of a tool set Dear Fay Jin: In your letter dated June 10, 2025, you requested tariff classification, country of origin, and marking determinations regarding a 51-piece tool set. Product information was submitted with your request. The item under consideration is described as a tool set comprising 51 items imported together inside of a plastic molded case. The tool set will be imported within external packaging and ready for retail sale. The contents of the set include: 1 - Adjustable wrench (China) 1 - Pair of long nose pliers (China) 1 - Claw hammer (China) 14 - Nut driver bits (China) 30 - Bits (China) 1 - Magnetic bit driver (Vietnam) 1 - Utility knife (China) 1 - Tape measure (China) 1 - Level (China) Classification Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1, HTSUS, states in part that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3. The instant tool set consists of at least two different articles that are, prima facie, classifiable in different headings. It consists of articles put up together to carry out a specific activity (i.e., home improvement or construction projects). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the set in question is within the term “goods put up in sets for retail sale.” GRI 3(a) states in part that when two or more headings each refer to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific, even if one heading gives a more precise description of the good. GRI 3(b) states in part that goods put up in sets for retail sale, which cannot be classified by reference to 3(a), are to be classified as if they consisted of the component which gives them their essential character. The factor or factors which determine essential character varies with the goods under consideration. Explanatory Note Rule 3(b)(VIII) lists factors such as the nature of the material or component, their bulk, quantity, weight or value and the role of a constituent material in relation to the use of the good. It is the opinion of this office that the magnetic bit driver, functioning as a tool holder, imparts the essential character of the tool set because it is used with a large quantity of nut driver bits and other bits. Without the magnetic bit driver, the utility of the included bits would be significantly impeded and thus the overall functionality of the tool set would be irreparably encumbered. The applicable subheading for the 51-piece tool set will be 8466.10.0175, HTSUS, which provides for Parts and accessories suitable for use solely or principally with the machines of headings 8456 to 8465…; tool holders for any type of tool for working in the hand: Tool holders and self-opening dieheads: Other. The general rate of duty will be 3.9 percent ad valorem. Country of Origin Regarding country of origin for Section 301 Trade Remedies and additional duty purposes, you state that all component items are of Chinese origin except the magnetic bit driver, which is from Vietnam. When determining the country of origin for purposes of applying current trade remedies under Section 301 and additional duties, 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). According to the CBP website under Section 301 Trade Remedies Frequently Asked Questions, “When importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set (i.e., the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy, then the entire set will be subject to the additional 25 percent duties. If the HTSUS provision under which the entire set is classified is not covered by the Section 301 remedies, but the set contains components that are classified in a subheading covered by the 301 list, the 301 duties will not be assessed on the individual components.” In this case, the magnetic bit driver of Vietnamese origin imparts the essential character of the 51-piece tool set and thus controls the classification and country of origin of the entire set. Accordingly, the country of origin is Vietnam. Effective April 5, 2025, Executive Orders implemented “Reciprocal Tariffs.” All imported merchandise must be reported with either the Chapter 99 provision under which the reciprocal tariff applies or one of the Chapter 99 provisions covering exceptions to the reciprocal tariffs. At this time products from all countries will be subject to an additional 10 percent ad valorem rate of duty. At the time of entry, you must report the Chapter 99 heading applicable to your product classification, i.e. 9903.01.25, in addition to subheading 8466.10.0175, HTSUS, listed above. 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/. Marking Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940). Part 134 of the U.S. Customs and Border Protection (CBP) Regulations (19 C.F.R. 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 C.F.R. 134.1(b)), defines “country of origin” 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 the marking laws and regulations. A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character or use, 

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). According to the CBP website under Section 301 Trade Remedies Frequently Asked Questions, “When importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set (i.e., the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy, then the entire set will be subject to the additional 25 percent duties. If the HTSUS provision under which the entire set is classified is not covered by the Section 301 remedies, but the set contains components that are classified in a subheading covered by the 301 list, the 301 duties will not be assessed on the individual components.” In this case, the magnetic bit driver of Vietnamese origin imparts the essential character of the 51-piece tool set and thus controls the classification and country of origin of the entire set. Accordingly, the country of origin is Vietnam. Effective April 5, 2025, Executive Orders implemented “Reciprocal Tariffs.” All imported merchandise must be reported with either the Chapter 99 provision under which the reciprocal tariff applies or one of the Chapter 99 provisions covering exceptions to the reciprocal tariffs. At this time products from all countries will be subject to an additional 10 percent ad valorem rate of duty. At the time of entry, you must report the Chapter