H315287

HQ H315287 April 21, 2021 OT:RR:CTF:VS H315287 UBB CATEGORY: Origin Thomas M. Keating Rock Trade Law LLC 134 N. LaSalle St. Suite 1800 Chicago, IL 60602 RE: Country of origin marking and tariff applicability under HTSUS 9903.88.01 of a centrifugal water cooling pump manufactured in Mexico Dear Mr. Keating, This is in response to your ruling request letter dated October 14, 2020. In your letter you requested a finding that certain centrifugal cooling pumps produced by Johnson Electric North America are considered products of Mexico for all country of origin purposes, including 19 CFR 134.1 marking purposes, and are not subject to additional tariffs under Section 301. FACTS: You describe the subject merchandise as a centrifugal pump with an internal permanent magnetic direct current motor (“centrifugal pump” or “pump”). The centrifugal pump is used as a cooling pump for the battery pack in Hybrid or all-electric passenger automobiles. The pump is not used to cool internal combustion engines. You classify the pump under subheading 8413.70.20, of the Harmonized Tariff Schedule of the United States (“HTSUS”). You further note that while this classification carries a general duty rate of “Free”, items classified under this tariff provision are subject to an additional 25 perfect tariff when the country of origin is China, pursuant to List 1 of the Section 301 China tariffs. You state that the components used to manufacture the pumps originate from China, Serbia and various other third-party countries. At Johnson Electric’s factory in Mexico, approximately 27 unique components are manufactured into subassemblies for a brushless DC motor, including a stator, rotor and housing subassemblies. The subassemblies are then combined to assemble a finished centrifugal pump. You describe the key manufacturing processes used to create the subassemblies and centrifugal pump as: stamping, plastic injection molding and over-molding, winding of the bobbin to create the field coil, magnetization, ultra-sonic welding and soldering. You argue that these methods completely change the identity of the components. You note that there are 34 separate steps required to manufacture each pump. The manufacturing process for each of the subassemblies and the centrifugal pump are described in more detail below: Stator Subassembly You state that the stator subassembly consists of eight (8) steps, all performed at the Johnson Electric factory in Zacatecas, Mexico. To produce the stator subassembly, first the individual stator laminations are formed by feeding slitted Japanese silicon steel sheet into a progressive die and stamping it in a high-speed press. This process blanks and pieces the die into a lamination. The laminations are then stacked and compressed to form a stator stack. The front bobbin is then formed by injection molding thermo-plastic resin from Japan using an injection molding process. A rear bobbin is formed by over molding three Chinese electric terminals with thermo-plastic resin from Japan in an injection molding process. Front and back bobbins formed in Mexico are then joined with the lamination stack using a pneumatic press. Copper winding wire from Mexico is then spun around the stator assembly in a specific pattern that provides a finished motor with characteristics such as power, torque and efficiency. The stator is then placed in an electric spot welder, where a high voltage current and force is applied against the terminal hooks and copper winding wire, fusing the wire to the terminal and forming a permanent electrical connection. Finally, the electrical integrity of the stator is tested. Rotor Subassembly You state that the rotor subassembly consists of eight (8) steps that all take place at Johnson Electric’s factory in Zacatecas, Mexico. First, individual rotor laminations are formed by stamping Japanese slitted silicon steel sheet in a progressive die, which blanks and pierces the flat sheet into a lamination. Multiple laminations are then stacked and compressed to form a rotor stack. An impeller blade guard and a bushing holder are then formed by plastic injection molding of thermo-plastic resin from Japan. The formed lamination stack and bushing holder are then joined with unmagnetized magnets and two bushings (from China) by over-molding with thermoplastic Japanese origin resin in an injection molding machine, creating a rotor. The rotor is then over-molded a second time with Japanese thermoplastic resin to form a rotor-impeller subassembly. Next, the injection molded blade cover is ultra-sonically welded to the rotor impeller. Finally, the new rotor assembly is placed into a machine that induces an electromagnetic field around the subassembly to transform the ferrite bars into permanent magnets, making the rotor functional. Motor Housing Subassemly Production You state that the motor housing subassembly process consists of six (6) steps performed at Johnson Electric’s factory in Mexico. First, a plastic EMC coated motor housing from China is fit with the previously assembled stator subassembly to create a housing assembly. A rubber sleeve (from China) is then fitted around the housing assembly. A rubber o-ring and six metal springs (from China) are inserted into the motor housing assembly using a machine. A plastic EMC coated waterproof sleeve with a shaft is then fitted into the housing assembly. The housing assembly is vacuum cleaned and a washer is inserted into the shaft of the stator assembly. Finally, lubricant is added to the sleeve in preparation for the rotor/impeller assembly. Pump Final Assembly You state that the final pump assembly consists of twelve (12) steps performed at Johnson Electric’s Mexico factory. First, the rotor and stator are machine fit into the housing subassembly. The rotor is then lubricated and a rubber o-ring is added to the housing. Thermoplastic resin from Japan is injection molded into a volute using a plastic injection molding process. A ceramic washer (from China) is fit to the volute, and the volute is fit to the o-ring of the housing and screwed into place. The pump is then tested. Next, a pump controller printed circuit board controller (PCBA) from Serbia is inserted into the housing base and screwed into place. The PCBA is then soldered onto the housing terminals to form a permanent electrical connection. An o-ring is then seated to the base of the housing and a gap filler is added to protect the PCBA from vibration. An air vent is inserted into an end cap (from China), and the end cap assembly is fit to the pump sub assembly. The end cap is secured to the base of the housing with screws as fasteners. Finally a controller leakage test is performed. ISSUE: What is the country of origin of the centrifugal pumps for all country of origin purposes, including marking and the application of Section 301 trade remedies? LAW AND ANALYSIS: Marking The marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin (or its container) 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. Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. To provide a more seamless transition to the U.S.-Mexico-Canada Agreement (“USMCA”) for Canadian and Mexican traders, at this time, CBP continues to utilize the marking rules in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods of those countries. 19 C.F.R. § 102.11(a) provides that the country of origin of a good is the country in which: The good is wholly

Marking The marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin (or its container) 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. Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.To provide a more seamless transition to the U.S.-Mexico-Canada Agreement (“USMCA”) for Canadian and Mexican traders, at this time, CBP continues to utilize the marking rules in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods of those countries. 19 C.F.R. § 102.11(a) provides that the country of origin of a good is the country in which:The good is wholly obtained or produced;The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. “Material” means a good that is incorporated into another good as a result of production with respect to that other good, and includes parts, ingredients, subassemblies, and components.” 19 C.F.R. § 102.1(l). “Foreign material” is defined in Section 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The centrifugal pump is neither “wholly obtained or produced” nor “produced exclusively from domestic materials.” Therefore, paragraphs (a)(1) and (a)(2) can