H329175

HQ H329175 August 15, 2023 OT:RR:CTF:VS H329175 ARU CATEGORY: Origin Oscar Palacios, LCB, CCS Trade Policy Advisor C.H. Robinson International 680 Knox Street, Suite 210 Torrance, CA 90502 RE: Country of Origin; USMCA; Section 301 Dear Mr. Palacios: This is in response to your December 5, 2022 ruling request, filed on behalf of [XXXXX] (or “importer”), regarding United States Mexico Canada Agreement (USMCA) eligibility and the country of origin for purposes of marking and Section 301 applicability of various models of passenger vehicle, light truck, heavy truck, and industrial tires. You have asked that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information designated as confidential in your request and contained within brackets in the ruling will not be released to the public and will be withheld from published versions of this ruling. FACTS: The importer [XXXXX] currently produces several models of passenger vehicle, light truck, heavy truck and industrial tires in China from components obtained in China with the exception of the natural rubber, which is obtained from a non-USMCA country [XXXXX] and imported to the Chinese production plant. Subsequently, the produced tires are imported into the United States ‘as is’ and will not be fitted or affixed to any wheel or wheel assemblies. In their request, the importer asks us to consider an alternative scenario in which the manufacturing operations would be undertaken in Mexico. The items under consideration have been identified as various models of passenger, light truck, heavy truck, and industrial tires. The importer states that the sizes will vary at time of production from 12 inches and higher, but all are of radial construction. The following information on five tire models is provided: Passenger Vehicle Tire, Steel belt PCR tire, New pneumatic steel belt radial tire for passenger car, subheading 4011.10, Harmonized Tariff Schedule of the United States (HTSUS) Passenger Vehicle/Light Truck Tire, Steel belt LTR tire, New pneumatic steel belt radial tire for passenger vehicle or light truck, subheading 4011.20, HTSUS Passenger Vehicle/Light Truck Tire, All steel TBR tire, New pneumatic steel belt radial tire for passenger car or light truck, subheading 4011.20, HTSUS Industrial Vehicle Tire, All steel wide off-the-road (OTR) tire, Radial tire for engineering application, non-directional pattern, RIM > 61cm, section width 24” (inclusive) or more, subheading 4011.80, HTSUS Industrial Vehicle Tire, All steel narrow section OTR tire, Radial tire for engineering applications, non-directional pattern, RIM > 61cm, section width up to 24”, subheading 4011.80, HTSUS According to the information provided, the raw materials will be sourced from multiple countries. The natural rubber will be sourced from [XXXXX], while the remaining components will be sourced from China. The raw materials will be imported directly to the manufacturing facility in Mexico where they will be used in the production of the completed tires. The raw materials are used to produce multiple components to be incorporated into the tires. The fabric and steel materials are used to produce cords, plies, and bead wires. The rubber is processed and turned into different sheets of rubber for use in the tire production. The chemicals are used throughout the production process to add cohesion between all the components. The importer [XXXXX] describes the manufacturing process in Mexico as follows: start by rolling a thin airtight sheet of synthetic rubber over a rotating flexible cylinder. This thin sheet acts as the inner liner tube of the finished tire. The casing ply is then added over the liner tube. The casing ply is made up of individual cords that are twisted like cables of either fabric or steel, laid side-by-side and encased in rubber. Two strong hoops of steel wire called bead bundles are put in place to anchor the sidewall ply and eventually hold the tire against the rim. The casing ply is folded over the bead wire to lock the bead bundles in place. Next, additional bead rubber sheets are added along with the sidewall rubber sheet. The flexible cylinder then inflates the unfinished tire giving it its traditional round shape and additional tread piles are applied on the casing ply that will be under the final tread rubber. The tread rubber is comprised of multiple chemical components, such as carbon black and silica and are combined with the natural and synthetic rubber. The final tread rubber sheet is added and gives the finished tire its performance characteristics. Once the final tread rubber is applied, the unfinished tire is removed from the cylinder and taken to the mold for the vulcanization process. The vulcanization process begins when the unfinished tire is placed on a mold and inflated with hot water or steam, which causes the tire to press against the mold, the tire is heated to cure the rubber and bond the components. After this curing process is complete, the tire is removed from the mold for cooling and then testing. Each tire is inspected for flaws such as bubbles or voids in the rubber of the tread, sidewall, and interior of the tire. Then, the tire is placed on a test wheel, inflated, and spun. Once the tire has been inspected and run on the test wheel, it can be moved to its final staging point for packing and shipping. A flowchart of the production process was provided. ISSUE: Whether the passenger vehicle, light truck, heavy truck, and industrial tires are eligible for USMCA preferential tariff treatment and what the country of origin is for purposes of marking and Section 301 duties. LAW AND ANALYSIS: Country of Origin 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 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. Title 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 product-specific rule of origin for goods classified within heading 4011 states: 4011.10-4012.90 A Change to subheading 4011.10 through 4012.90 from any other subheading, including another subheading within that group. Based on the facts presented, the foreign materials are classified outside of heading 4011, HTSUS. As such, all foreig

Country of Origin 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 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. Title 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 product-specific rule of origin for goods classified within heading 4011 states: 4011.10-4012.90 A Change to subheading 4011.10 through 4012.90 from any other su