H315295

HQ H315295 April 9, 2021 OT:RR:CTF:VS H315295 JMV CATEGORY: Origin Jeremy R. Page Page-Fura PC 939 W. North Avenue, Suite 750 Chicago, IL 60642 RE: Country of origin of an Automotive Headrests; Section 301 trade remedy; Marking Dear Mr. Page: This is in response to your request, dated October 3, 2020, filed on behalf of your client Yanfeng Seating Mexico S.A. de C.V. (“YFS”). In your letter, you request a binding ruling on the applicability of Section 301 trade remedies and country of origin marking for three different automotive headrests. FACTS: The products at issue are three different automotive headrests: an L-shaped headrest, an L-shaped wire headrest and a folding headrest, under two different sourcing scenarios. All three headrests will be produced in Mexico from parts of Mexican and Chinese origin. L-shaped Automotive Headrest The first headrest that is a subject of this ruling request is an L-shaped headrest that will be placed on the rear deck of the back seat in a motor vehicle. Three components are involved in the production of the L-shaped headrest: a basic support frame of Chinese origin, shaped foam “stuffing” of Mexican origin, and either leather of Mexican origin or PVC of Chinese origin. The production first entails cutting to shape and sewing the leather or PVC, depending on customer needs, which will function as the headrest cover. The cover will be stuffed with the “formed-to-shape” foam of Mexican origin to create the head support and the support frame will be inserted into the head support to produce the final product. L-Shaped Automotive Wire Headrest This second headrest is a variant of the first L-shaped headrest. The L-shaped automotive wire headrest has the same outward appearance as the L-shaped headrest noted above and is produced through the same production steps and sourcing patterns. However, the L-shaped automotive wire headrest incorporates an additional wire of Mexican origin to create additional stability for the overall headrest assembly. The wire will be joined with the frame of Chinese origin before they are assembled to the head support to form the finished headrest assembly. Folding Automotive Headrest – Sourcing Scenario 1 YFS is also proposing to produce an automotive back seat folding headrest under two different sourcing patterns. Although the sourcing of components may differ, the production of the headrest in each scenario involves the same discrete operations. First, a toothed plate assembly is produced by arc welding a toothed plate axis of Mexican origin and a toothed plate of Chinese origin together. Then, the second subassembly, the core plate welding subassembly, is created by combining 19 additional parts to the tooth plate assembly. All but one (a Chinese pawl) of these additional 19 parts are sourced from Mexico. The first step in the production of the core plate welding subassembly is the riveting of the bracket right subassembly to the pawl. Once joined, that bracket subassembly is then joined with the pawl axis, toothed plant spring, E-ring and rotate spring to form a complete subassembly. From here, that subassembly is combined with the tooth plate assembly, tube-connect, left bracket, CC bar and washer, all of which are clamped into place through a specially designed fixture before they are arc welded to produce the final core plate welding subassembly. The core plate welding subassembly is then arc welded with two hooked rods of Chinese origin to form the complete core part welding assembly. Then, the core part welding assembly will be joined with a front cover, a rear cover, a screw, a release pin and a button assembly, all of Mexican origin, to produce the core part assembly. Finally, once the core assembly has been produced, it will be combined with a bracket, and a headrest produced from either Chinese origin PVC or Mexican origin leather, which is cut and sewn in Mexico, and foam produced and formed to shape in Mexico. With that final assembly complete, the finished Folding Headrest identified by YFS as Part Number 84913926 is complete. Folding Automotive Headrest – Sourcing Option 2 As an alternative to the above sourcing pattern, YFS is also contemplating a slight variation in which the initial toothed plate assembly discussed above would be produced in China from a toothed plate axis and a toothed plate of Chinese origin. That assembly would then still be further assembled in Mexico with the same 19 components noted above under the same production processes to produce the core plate welding subassembly discussed above. However, while the overall production would remain the same, 17 of those additional 19 components would instead be sourced from China. However, the remaining steps involving all onward production in Mexico and the sourcing of all remaining components as discussed under the first folding headrest scenario will be followed to produce the finished folding headrest. As an automotive headrest, these products are properly classified under subheading 9401.90.10, of the Harmonized Tariff Schedule of the United States (“HTSUS”). For the L-Shaped Headrests, the only non-originating component is the bracket, which is classified under subheading 8302.30, HTSUS as a form of vehicle mounting. Similarly, for the folding headrest under scenario 1, the only non-originating components are the toothed plate, the pawl, and rod, all of which are again considered mounting elements under subheading 8302.30, HTSUS. For the folding headrests under scenario 2, seven parts will be classified under subheading 9401.90.10, HTSUS: the CC bar, pawl axis, two mech stops, washer, bumper stop, and e ring. Additionally, five parts will be classified under subheading 8302.30, HTSUS and eight will be classified under chapter 73, HTSUS. ISSUE: What is the country of origin of the automotive headrests for purposes of applying Section 301 trade remedies? What is the country of origin of the automotive headrests for marking purposes? LAW AND ANALYSIS: Section 301 Duties The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 7.5% will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(s), HTSUS. Among the subheadings listed in U.S. Note 20(s) of Subchapter III, Chapter 99, HTSUS, is 9401.90.10, HTSUS. When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. 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, 69 C.C.P.A. 151 (1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation h

Section 301 DutiesThe United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 7.5% will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(s), HTSUS. Among the subheadings listed in U.S. Note 20(s) of Subchapter III, Chapter 99, HTSUS, is 9401.90.10, HTSUS. When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. 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, 69 C.C.P.A. 151 (1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occ