H342833

H342833 December 19, 2025 OT:RR:CTF:VS H342833 RRB CATEGORY: Origin Nate Bolin K&L Gates LLP 1601 K Street NQ Washington, DC 20006 RE: Country of Origin of an Electronically Commutated Motor; Section 301 Trade Remedy Dear Mr. Bolin: This is in response to your request, dated October 14, 2024, filed on behalf of your client, GMCC & Welling Appliance Component (Thailand) Co., Ltd. (“GAT”), regarding the country of origin of an Electronically Commutated Motor (hereinafter, “the ECM motor”). FACTS: GAT manufactures the ECM motor in Thailand using materials and components from China, Japan and Thailand. The ECM motor is described as a 138 series constant torque motor with a basic power of 1/3 horsepower (“HP”), ½ HP, ¾ HP, and 1 HP for use in a household central air conditioner. The ECM motor is equipped with functions such as constant torque or constant speed. GAT states that the ECM motor consists of three basic subassemblies: (1) rotor subassembly, (2) stator subassembly, and (3) structural aluminum bracket. The rotor subassembly is connected with the stator subassembly and the structural bracket through the bearing. The stator is energized to form a magnetic field, driving the rotor subassembly to rotate and converting the electric energy input into the kinetic energy of the complete ECM motor. The structural bracket, together with the stator subassembly, is used to support the rotor subassembly as it rotates in the stator subassembly. Along with the rotor subassembly, stator subassembly, and structural aluminum bracket, other key components include the shaft, magnet and bearing. GAT explains that it will manufacture the ECM motor in Thailand using materials and components originating in Thailand, Japan, and China. GAT manufactures the rotor subassembly in Thailand using punching and pressing techniques. The rotor subassembly consists of various components, including the inner rotor core, outer rotor core, thermoplastic elastomer (“TPE”) rubber, shaft, magnetic tiles, bearings, and other components. GAT provided our office with a breakdown of the various production steps for the rotor subassembly, beginning with punching silicon steel sheets to produce the rotor core. With respect to the stator subassembly, GAT states that it purchases the stator subassembly from a third party and is not involved in its manufacturing process, which takes place in China. GAT further states that it sources the structural aluminum bracket from a third-party supplier that manufactures the component in Thailand1 and delivers it to GAT for incorporation into the final ECM motor. GAT assembles the final ECM motor in Thailand, where it will place the Thai- origin rotor subassembly and Thai-origin structural bracket with the Chinese-origin stator subassembly and remaining components originating from China, Japan, and Thailand on the main assembly line to produce the finished ECM motor. This includes the magnetization of the rotor subassembly into the stator subassembly, installation of the structural bracket into the rotor and stator subassemblies, and testing and packaging of the finished ECM motor. GAT provided our office with a detailed description of its final assembly steps. GAT also provided a bill of materials indicating that the Thai processing and material costs outweigh the Chinese material costs.2 ISSUE: What is the country of origin of the ECM motor for duty purposes? LAW AND ANALYSIS: 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, 681 F.2d 778 (CCPA 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 1 In a supplemental submission, dated November 11, 2025, GAT submitted a Revised Bill of Materials, which corrected the initial submission, dated October 14, 2024. The supplemental submission confirmed that the structural aluminum bracket is sourced from Thailand, not China. 2 In the supplemental submission, dated November 11, 2025, GAT’s Revised Bill of Materials corrected the costs of the Thai processing and materials costs and the Chinese materials costs based on its revision of the structural bracket sourcing. 2 integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (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 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 occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). The Court of International Trade more recently interpreted the meaning of “substantial transformation” in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (CIT 2016). Energizer Battery involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight. All of the components of the flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States and assembled into the finished Generation II flashlight. The Energizer Battery court reviewed the “name, character and use” test utilized in determining whether a substantial transformation had occurred and noted, citing Uniroyal, Inc., 3 C.I.T. 220, 226, 542 F. Supp. 1026 (1982), aff’d per curiam, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer Battery at 1318. In addition, the court noted that “when the end-use was pre- determined at the time of importation, courts have generally not found a change in use.” Energizer Battery at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 312 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. CBP’s general position is that the country of origin of an electric motor will be determined by where the two most essential components of an electric motor, the rotor and the stator, are made. In turn, the country of origin of the stator and rotor will often be based upon the country where the cores of these components are made. In New York Ruling Letter (“NY”) N325810, dated May 25, 2022, CBP considered the origin of an electric motor under two manufacturing scenarios. In the second scenario, the stator, the structural bracket, the bearing, the shaft, the magnets, and various hardware components were sourced from China. The rotor was manufactured in Thailand by stamping sheet steel into individual laminations, pressing the laminations, inserting the shaft, gluing the magnetic tiles and magnetizing. The manufacture of the printed circuit board assembly (PCBA)

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, 681 F.2d 778 (CCPA 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 1 In a supplemental submission, dated November 11, 2025, GAT submitted a Revised Bill of Materials, which corrected the initial submission, dated October 14, 2024. The supplemental submission confirmed that the structural aluminum bracket is sourced from Thailand, not China. 2 In the supplemental submission, dated November 11, 2025, GAT’s Revised Bill of Materials corrected the costs of the Thai processing and materials costs and the Chinese materials costs based on its revision of the structural bracket sourcing. 2 

integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (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 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 transformati