N364352

U.S. Department of Homeland Security U.S. Customs and Border Protection National Commodity Specialist Division One World Trade Center, Suite 51.201 New York, NY 10007 U.S. Customs and Border Protection N364352 September 2, 2026 OT:RR:NC:N2:206 CATEGORY: Origin Clarissa Photikarmbumrung MAT Holdings, Inc. 6700 Wildlife Way Long Grove, IL 60074 RE: The country of origin of brake hubs Dear Ms. Photikarmbumrung: In your letter, dated August 17, 2026, you requested a country of origin ruling on brake hubs for marking purposes; for purposes of applying trade remedies under Section 301, as amended, from China, and additional duties; and applicability of the United States-Mexico-Canada Agreement (USMCA). The articles under consideration are described as a Front Hub-drum Assembly (high-runner), Part Number (PN) MHP-A001ALP; Front Assembly, PN 243076, and Rear Assembly, PN 343076. Each assembly consists of a hub, wheel stud, bearing cup, and tone ring. Additionally, PN MHP-A001ALP contains an oil port plug; PN 243076 has a front brake drum, nut, and an outer bearing cup; and PN 343076 has a rear brake drum, flange stud, nut, and an outer bearing cup. The articles are designed to be used with heavy-duty trucks as original equipment manufacturers (OEM) goods. You state that the hubs for each assembly are imported to Mexico from China in a rough, unfinished state. In Mexico, the hubs undergo computer numerical control (CNC) turning, hole drilling, thread tapping, and countersinking. Then, the bearing cups from China and Thailand, tone ring, and studs are hydraulically pressed into the holes. Finally, the brake drums of Mexican origin are mechanically coupled with the hubs. Marking: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin 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. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of the marking laws and regulations. Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in sections 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile and apparel goods which are subject to the provisions of 19 CFR 102.21. See 19 CFR 102.11. Applied in sequential order, 19 CFR 102.11(a) provides that the country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) 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 Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. The products at issue are neither "wholly obtained or produced" nor "produced exclusively from domestic materials." Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the items, and paragraph (a)(3) must be applied next to determine the origin of the finished articles. The hubs are classified under subheading 8708.99, Harmonized Tariff Schedule of the United States (HTSUS). The tariff shift requirement in Part 102.20 for the item at issue states: A change to subheading 8708.99 from any other subheading, except from parts or accessories of the goods of subheading 8708.40, 8708.50, 8708.80, 8708.91, 8708.92, 8708.94, or 8708.95. None of the separate components of the hubs is classified in subheading 8708.99, HTSUS, or any of the listed excepted subheadings. As a result, the tariff shift is met and the Front Hub-drum Assembly (high-runner), PN MHP-A001ALP; Front Assembly, PN 243076, and Rear Assembly, PN 343076 can be marked as products of Mexico. Additional Duties: When determining the country of origin for purposes of applying current trade remedies under Section 301 and additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. 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). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). It has been a long-standing CBP position that assembly of components does not result in a substantial transformation. You state that “[t]he imported Chinese component is not commercially usable as a brake hub prior to its processing in Mexico. Being a raw casting, it cannot be installed in any vehicle or integrated with other automotive systems.” In National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the court considered sockets and flex handles which were either cold formed or hot forged into their final shape prior to importation, speeder handles which were reshaped by a power press after importation, and the grip of flex handles which were knurled in the U.S. The court found that the drill bit blanks underwent no significant change in character or use when they were processed into the finished drill bits in China. In other words, the drill bit blanks had the very essence of the finished drill bits and the processing that was performed in China did not change the shape, character or predetermined use of the drill bits. Similarly in this case, the processes that occur in Mexico do not render the Chinese components a new name, character or use. The end-use of the components from China is predetermined before they arrive in Mexico for further processing and assembly, as the hubs are recognizable as such. Furthermore, the assembly of the components with the rest of the China-sourced parts does not result in a substantial transformation in Mexico. As a result, it is the opinion of this office that the country of origin of the Front Hub-drum Assembly (high-runner), PN MHP-A001ALP; Front Assembly, PN 243076, and Rear Assembly, PN 343076 will be China for purposes of applying trade remedies under Section 301, as amended, from China, and additional duties. USMCA: 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)). G

is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. 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). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). It has been a long-standing CBP position that assembly of components does not result in a substantial transformation. You state that “[t]he imported Chinese component is not commercially usable as a brake hub prior to its processing in Mexico. Being a raw casting, it cannot be installed in any vehicle or integrated with other automotive systems.” In National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the court considered sockets and flex handles which were either cold formed or hot forged into their final shape prior to importation, speeder handles which were reshaped by a power press after importation, and the grip of flex handles which were knurled in the U.S. The court found that the drill
bit blanks underwent no significant change in character or use when they were processed into the finished drill bits in China. In other words, the drill bit blanks had the very essence of the finished drill bits and the processing that was performed in China did not change the shape, character or predetermined use of the drill bits. Similarly in this case, the processes that occur in Mexico do not render the Chinese components a new name, character or use. The end-use of the components from China is predetermined before they arrive in Mexico for further processing and assembly, as the hubs are recognizable as such. Furthermore, the assembly of the components with the rest of the China-sou