H343750

H343750 June 4, 2025 OT:RR:CTF:VS H343750 AMW CATEGORY: Origin Joseph F. Walter Livingston International Professional Services 670 Young Street Tonawanda, New York 14150 RE: Outdoor Barrel Saunas; United States-Mexico-Canada Agreement; Section 301 Trade Remedies Dear Mr. Walter: This is in response to your request, dated November 15, 2024, filed on behalf of Red Rock Outdoors Co. (“Red Rock”) in which you request a binding ruling regarding the eligibility of certain outdoor barrel saunas for preferential tariff treatment under the United States-Mexico- Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division (“NCSD”) for response. FACTS: The following facts are based on your November 15, 2025, ruling request. The product under consideration is an unassembled, prefabricated wooden barrel sauna building (hereinafter, the “barrel sauna”). The merchandise is described as a “barrel sauna” because, upon final assembly at the installation site in the United States, the units resemble a wooden barrel. Based on its referral memorandum, the NCSD determined that the unassembled barrel saunas would be classifiable under subheading 9406.10.10, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for prefabricated buildings of wood. According to your request, each barrel sauna is manufactured in both China and Mexico using Canadian-origin hemlock and cedar woods. In China, the wood is kiln-dried, sawed into boards, and sanded. The boards are then fashioned into the following prefabricated components: front sauna panel (door end), back sauna panel, indoor floor, bench and bench back, and the cradles for holding the barrel sauna’s body in place. The NCSD has advised that the wood boards completed in China are classified under heading 4407, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Wood sawn or chipped lengthwise, sliced or peeled….” The boards that are further manufactured into the prefabricated components would be classified under heading 4418, HTSUS, which provides for “Builders’ joiner and carpentry of wood, including cellular wood panels and assembled flooring panels…”, and heading 9401, HTSUS, which provides for “Seats…, whether or not convertible into beds, and parts thereof….” The barrel sauna’s stainless steel and glass components are also sourced from manufacturers in China. These include the following: fasteners, barrel hoops, glass door, windows, light fixtures, and asphalt shingles. After manufacturing in China, the components, door, fasteners, fixtures, accessories, and remaining wood boards are exported to Mexico. In Mexico, the boards that will form the outer circumference of the barrel sauna are continuously shaped to add a dado joint near each board end, which is a rounded shape that permits one section of wood to connect with another. These curved edges will allow the façade boards to fit together and form the round outer surface of the barrel sauna. Here, the NCSD has advised that the continuous shaping of the boards in Mexico causes a tariff shift from heading 4407, HTSUS, to either heading 4409, HTSUS, which relates to “Wood…continuously shaped…” or heading 4416, HTSUS, which relates to “Casks, barrels…and parts thereof, of wood, including staves….” After the stave boards are shaped in Mexico, they are packed together with the remaining Chinese-origin components (e.g., prefabricated doors, floors, benches, metal components, and windows) for shipment to the United States. Outside of the continuously shaped stave boards, the remainder of the Chinese-origin components are not further manufactured in Mexico. Finally, the costed bill of materials provided by the requestor indicates that the value of the components totals $856.40 from China and $809 from Mexico. ISSUE: Are the imported sauna barrels eligible for preferential tariff treatment under the USMCA when imported from Mexico into the United States? What is the country of origin of the subject barrel saunas for the purpose of Section 301 remedies? LAW & ANALYSIS: USMCA Eligibility The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(a)(i) provides: Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of 2 this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and . . . GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; (ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; (iii) the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or … Here, the subject barrel saunas contain non-originating materials. As such, they are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor are they goods produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the goods qualify under GN 11(b)(iii). With respect to GN 11(b)(iii), the subject barrel saunas are not “a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials” under GN 11(b)(iii) because they do not satisfy “all applicable requirements.” Under GN 11(l)(xvi), “production” means “growing, cultivating, raising, mining, harvesting, fishing, trapping, hunting, capturing, breeding, extracting, manufacturing, processing or assembling a good” or “the farming of aquatic organisms through aquaculture,” and does not include the term “packaging.” Thus, the nonoriginating materials packaged as part of the kits in Mexico will not satisfy “all applicable requirements” of GN 11. See Headquarters Ruling (“HQ”) H321859, dated August 5, 2021 (determining that unassembled dog pens and extension kits assembled in Mexico with Chinese and USMCA-origin materials was not “produced” in a USMCA country). 3 Next, GN 11(b)(iv) provides exceptions to the tariff shift rule under GN 11(b)(iii), noting in relevant part that products that are imported into the United States in an unassembled state but are classified as assembled goods pursuant to GRI 2(a), HTSUS, may qualify as USMCA- originating goods pursuant to GN 11(b)(iv)(B)(2) and (C) if the regional value content (“RVC”) calculated under GN 11(c)(i)-(ii) is not less than 60 percent i

USMCA Eligibility The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(a)(i) provides: Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of 2 

 this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and . . . GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; (ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; (iii) the good is a good produced entirely in the territory of one or more USM