H332525

H332525 AMW CATEGORY: Origin Ms. Allison Kepkay, Esq. White & Case LLP 701 Thirteenth Street, NW Washington, DC 20005 RE: Country of Origin; Refrigerated and Non-Refrigerated Trailers; Section 301 Measures; Country of Origin Marking Dear Ms. Kepkay: This is in response to your correspondence, dated May 11, 2023 , on behalf of your client, CIMC Refrigerated Trailer Co., Ltd., (“CIMC”), regarding the country of origin of certain refrigerated and non-refrigerated truck trailers imported into the United States from Canada for purposes of Section 301 measures and for marking. Your request, originally submitted as an electronic ruling request to the National Commodity Specialist Division, was forwarded to this office for review. FACTS: The products at issue are certain refrigerated and non-refrigerated truck trailers classified under subheading 8716.39.00, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for: “Trailers and semi-trailers…; Other trailers and semi-trailers for the transport of goods; Other; Other; Other; Other.” You state that the subject truck trailers are detachable, non-motorized trailers intended to be pulled by motorized truck units to transport merchandise. The refrigerated and non- refrigerated trailers consist of a trailer body, with components from China, and an undercarriage, which is referred to as a “bogie,” with components from the United States. The refrigerated trailers also contain a refrigeration unit with components from the United States. Additional components and subassemblies from China and the United States are imported into Canada for final assembly in Canada. The bogie is the assembly that provides the movement-related functions of the trailer. Specifically, the bogie contains the trailer’s suspension (e.g., the brakes system, shock absorption), rack, axles (which function to rotate the wheels and support weight), wheels, and tires. The “box,” meanwhile, consists of the enclosed upper portion of the trailer that is used to contain material for transportation. You state that the refrigerated and non- refrigerated trailers are almost exactly alike aside from the presence of a United States-origin refrigeration unit in the former that enables transportation of temperature-sensitive merchandise. The trailer components are imported into Canada where they are assembled into the complete trailers. This process occurs via two stages, both of which contain several steps: (1) assembly of the “bogie”; and (2) final assembly. The first stage of the Canadian assembly is the completion of the “bogie” subassembly. The bogie provides the ability for the trailer to move. All bogie components are imported from the United States, including the suspension assembly, which consists of the axle, frame, air spring, hangar, and other components. Once in Canada, the remaining bogie components are combined with the suspension to create the complete bogie. Specifically, you state that the bogie subassembly production includes the following steps: 1. Installation of brake system: attach air chamber, auto slack adjuster, brake kits, and air tank; 2. Installation of antilock brake system (“ABS”) and plumbing: screw ABS valve onto the air tank, tighten brake hoses on the ABS connectors, bolt height control valve onto suspension, bolt TireMaax CP pressure control system onto suspension and push air tubing to connector, bolt on air tank (including ABS valve and brake hose) and air chamber to the suspension, push seal, ABS sensor, sensor spring clip, and bearing onto the suspension; 3. Installation of wheel-end system: push hub and drum assembly, screw on spindle nut, tighten spindle nut, screw on cap screw with cap washer and tighten; 4. Installation of lubrication: inject lubrication as needed; and 5. Installation of wheels and tires: push tire on wheel and inflate tire, put separator plate between steel wheel and aluminum wheel, and bolt on wheels with wheel nuts. The second stage is the final assembly of the trailer units. In this stage, the bogie is attached to the remaining components of the trailer, and the trailer box is constructed. You state that this stage occurs at ten different assembly stations over approximately 12 steps: 1. Station One: The trailer floor is attached to an upper coupler. Wires and air tubing are run along the side of the floor for the purposes of electrical and air brake connections. 2. Station Two: The trailer walls are moved into position and riveted to the floor assembly. The front wall is put into place and riveted into a solid connection. 3. Station Three: The rear frame and door assembly are moved into place and riveted to the sidewalls. The roof assembly is then moved and tacked into place. 4. Station Four: Automatic drilling equipment is used to drill holes through the top of the wall and roof assemblies. The roof is riveted to fasten the wall and roof assemblies. 5. Station Five: Landing gear assemblies and bumper tubes are then attached to the trailer “box.” 6. Station Six: An automated weld machine welds the floor to the sidewall assemblies for the length of the trailer. 7. Station Seven: For refrigerated trailers, the refrigeration unit is attached to the front wall of the trailer. 2 8. Optional stations: Work to implement specific interior options or other work is performed in this station. 9. Station Eight: The bogie subassembly is placed under the trailer and attached to the underside of the trailer. 10. Station Nine: The bogie axles are attached, and workers check the air and electrical system on a machine to ensure brake timing and electrical connections function correctly. 11. Optional Station: Optional equipment (e.g., aerodynamic side skits) is installed. 12. Station Ten: The trailer is inspected and specified decals installed. You state that the entire production process requires approximately 90 professionally trained workers, including engineers, quality inspectors, welders, truck drivers, and forklift drivers. You provided a list of the components used in the refrigerated and non-refrigerated trailers as well as the cost and sourcing information. ISSUE: What is the country of origin of the subject trailers imported from Canada for purposes of the application of Section 301 measures and marking? LAW AND ANALYSIS: Section 301 Measures The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(b) and (f), HTSUS. Among the subheadings listed in U.S. Note 20(f) of Subchapter III, Chapter 99, HTSUS is subheading 8716.39.00, HTSUS, under which the subject trailers are classified. When determining the country of origin for purposes of applying current 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, 681 F.2d 778 (C.C.P.A. 1982). The substantial transformation determination is based on the totality of the evidence. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204 (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 tra

Section 301 Measures The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(b) and (f), HTSUS. Among the subheadings listed in U.S. Note 20(f) of Subchapter III, Chapter 99, HTSUS is subheading 8716.39.00, HTSUS, under which the subject trailers are classified. When determining the country of origin for purposes of applying current 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, 681 F.2d 778 (C.C.P.A. 1982). The substantial transformation determination is based on the totality of the evidence. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204 (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 3 

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