H315297

HQ H315297 August 25, 2021 OT:RR:CTF:VS H315297 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 Manual Cushion Frame; Section 301 trade remedy; USMCA Marking Dear Mr. Page: This is in response to your request, dated October 19, 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 an automotive manual cushion frame. FACTS: The product at issue is an automotive manual cushion frame produced from 42 to 46 components under five different sourcing scenarios. In each scenario, assembly will take place in Mexico from components of Mexican and Chinese origin. The assembly operations for the subject manual cushion frames under each scenario are largely the same: Production Scenario one Under the first production scenario, YFS will source all 46 components from Mexico, except for a Chinese origin pump (part number 3021904), which will be used for adjusting the seat. In this scenario, YFS will create four main subassemblies: a left- and right-hand bracket, a linkage subassembly, and a cross tube subassembly. The two side brackets will be produced by joining the following components from Mexico: a stamped side bracket, a bushing, a stamped linkage and a flat rivet. Bushings are assembled to the linkage through a riveting process to provide continuous lubrication to the joint. Once combined, that assembly is placed in a riveting machine where the flat rivet is plugged to the slot hole of the linkage and the stamped side bracket. YFS will also weld the components to create a single assembly at nine individual weld points. YFS will then create the linkage subassembly, which will be used to support user seat adjustment. The linkage assembly will be produced from an assignment tube, a toothed linkage, and a stamped linkage bracket, all of which will be sourced from Mexico. To produce the linkage subassembly, bushings will be assembled to a non-welding slot hole of the linkage. A pin-shaped fixture is applied to ensure the accurate assembly position of the toothed-linkage. Slot holes found in the linkage and the center of the tube are used to maintain the profile of the whole assembly during the nine-step welding process. The final subassembly, the cross-tube subassembly will create additional structural integrity for the finished automotive manual cushion frame. The cross-tube subassembly will be produced by welding four components of Mexican origin: a stamped washer, a cross tube, a stamped linkage, and a seat tilt recliner rotary assembly. First, the washer is joined to the linkage and the linkage and tube are positioned in a specially designed fixture to prepare them for the assembly process. Slot holes of the linkage and center of the tube are used to maintain those items’ profile. The seat tilt recliner rotary assembly is joined; then, the tube and linkage are welded together. After any required painting and quality control processes, these four subassemblies will be combined through an assembly operation with seven additional components of Mexican origin to produce the external skeleton for the cushion frame. These additional components are a plastic bushing bearing, a plastic bushing, a spring clip, a collar headed screw, a flanged locknut, a stamped cover plate and a self-locking screw. The linkage subassembly will be welded to the rear extrusion hole of each side bracket subassembly with the combined structure locked by a clip assembled at the edge of the extrusion hole. Then, these subassemblies will be joined with a rivet plugged into the front slot hole of the side bracket subassemblies and cross tube subassembly. Finally, YFS will produce the cushion frame skeleton subassembly from 22 components of Mexican origin and the aforementioned pump of Chinese origin. The additional components of Mexican origin include a stamped cushion pan that will form the foundation for the cushion and eventual frame use; the spring mat seat that will create the support/”bounce” of the seat; the two stamped tracks, which will mount the finished frame in the motor vehicle; a stamped riser mount, towel bar and bracket track mounting that will create further structural integrity/framing for the finished assembly; and various fasteners and fastening components in the form of screws, nuts, springs, and bushings. To create the cushion frame skeleton assembly, the two stamped tracks are positioned and assembled to the unlock lever mechanism, the towel bar and tube. The cushion frame skeleton subassembly is then assembled to the track assembly with four mounting screws to permit structural adjustment. The cushion pan and spring mat seat are then joined into the growing assembly, as well as the stamped riser mount and bracket track mounting through an arc welding process. Finally, a torsional spring is inserted into the tube forming part of the linkage subassembly to create the necessary resistance. The final frame will then be adjusted to the required design position before the pump is joined to the final automotive manual cushion assembly. Production Scenario Two Under the second production scenario proposed by YFS, all the component sourcing and production operations will be the same as scenario one, except YFS will also source the seat tilt recliner rotary assembly that is incorporated into the cross tube subassembly from China as well as the pump. Production Scenario Three With the third proposed production scenario, a slight variation in the sourcing and production operations is being proposed. Once again, as in scenario one and two above, the pump incorporated into the cushion frame skeleton subassembly will again be sourced from China. In addition, YFS will source the complete linkage subassembly, which will include a Chinese origin assignment tube, toothed linkage, and stamped linkage bracket as well. Finally, YFS will also source the stamped washer, cross-tube, and stamped linkage as its own subassembly from China before it is integrated with the seat tilt recliner rotary assembly of Mexican origin through the welding process to form the cross tube subassembly at YFS's operations in Mexico. All other assembly, higher level assembly and final assembly operations will still occur in Mexico. Because of the change in sourcing, the number of components required for production in Mexico will decrease from 46 to 42. Production Scenario Four For the fourth proposed production scenario, YFS will again source the same 46 components referenced in scenarios one and two above. In this fourth scenario, the parts that will be sourced from China are the pump incorporated into the cushion frame skeleton subassembly, and the stamped side brackets that each form part of the side bracket subassemblies. The remaining 43 components will be sourced from Mexico and all the riveting, welding, and further assembly required to produce the complete manual cushion frame will remain in Mexico. Production Scenario Five Finally, under the last production scenario, YFS will source the two stamped side brackets referenced in scenario four from China but will source the pump from Mexico. YFS will also source the toothed linkage that forms part of the linkage subassembly from China as well. This again will result in a bill of materials comprised of 46 components, with 43 of Mexican origin. The automotive manual cushion frame is classified under subheading 9401.90.10, Harmonized Tariff Schedule of the United States (“HTSUS”). Additionally, in the second scenario, the seat tilt recliner rotary assembly from China and eighteen other parts from Mexico will also be classified under 9401.90.10, HTSUS. ISSUE: What is the country of origin of the automotive manual cushion frame in each of the five scenarios for purposes of applying Section 301 trade remedies? What is the c

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