OT:RR:CTF:VS H346945 ACH
Ms. Mireya Ruano
Veyer LLC
6600 N Military Trail
Boca Raton, FL 33496
RE: USMCA Eligibility; Country of Origin Marking; Section 301 Measures; Task Chairs
Dear Ms. Ruano:
This is in response to your ruling request dated April 1, 2025, filed on behalf of Veyer
LLC (“Veyer”) concerning the eligibility of the MFTC 200 Multi-Function Task Chair (“chair”)
manufactured in Mexico and imported into the United States, for preferential tariff treatment
under the U.S.-Mexico-Canada Agreement (“USMCA”), and country of origin for purposes of
marking and Section 301 Trade Remedies.
FACTS:
The MFTC 200 Multi-Function Task Chair is a manual gas lift, variable height
adjustment, swivel seat that is constructed of a plastic and metal frame. The upholstered seat has
a swivel mechanism, five wheeled casters, and armrests. Seating is provided for a single
individual. The chair will be packaged unassembled for retail sale and will contain all hardware
required for assembly. The applicable subheading for the subject merchandise will be
subheading 9401.39.00, Harmonized Tariff Schedule of the United States (“HTSUS”), which
provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and
parts thereof: Swivel seats with variable height adjustment: Other: Household.”
The ruling request outlines an operation wherein the textile component (mesh fabric),
rubber component (rubber strips), plastic components (armrests, gas lift cover, casters), metal
components (seat foundation plate mechanism, seat back plate, gas lift, armrests, bolts), and
plywood components (cut to shape seat foundation) will be sourced from China. These seating
components will be shipped to Mexico. Plastic seating components (injection molded backrest
frame, swivel base) and polyurethane foam will be sourced from Mexico.
The bill of materials (BOM) for the chairs, the costs of the materials and their origin is as
follows:
Article Cost Country of Origin
Upholstery $0.92 China
Foam $3.18 Mexico
Plywood $1.72 China
Back Frame $8.68 Mexico
Base $5.04 Mexico
Armrest $7.39 China
Gas lift cover $0.12 China
Castor $1.04 China
Seat Plate $11.29 China
Steel Back Plate $2.74 China
Gas Lift $2.64 China
Bolts $2.48 China
Packaging $7.61 Mexico
Others $2.06 China
Overhead- Factory and $7.29 Mexico
Machinery
In-house Labor Cost $4.65 Mexico
Vendor Profit Margin per $4.55 Mexico
Unit
Freight $4.71 Mexico
D&D + CS $4.16 Mexico
In Mexico, the following production will occur: (1) the Chinese textile mesh fabric will
be cut to shape and sewn to form the seat backrest and seat foundation components using sewing
machines, (2) the cut to shape plywood seat components will undergo drilling and riveting, (3)
the seat backrest frame decorative cover and the gas lift cover will be created using plastic
materials and injection molding machines, (4) the polyurethane foam will be cut to shape, spray
glued to the wooden seat foundation, and upholstered using foam cutting machines, spray
equipment, and glue guns, (5) the rubber strips will be cut to specific lengths, (6) additional
seating components will be assembled using nail guns and hand tools, and (7) labels and packing
materials will be locally sourced. The complete, upholstered, and unassembled seating
components will be inspected, packed, labeled, and then exported to the United States.
ISSUES:
1. Whether the chairs will be eligible for preferential tariff treatment under the USMCA
2. What is the country of origin of the chairs for purposes of marking and Section 301 trade
remedies?
LAW AND ANALYSIS:
1. Eligibility for Preferential Tariff Treatment under the 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 and enacted on
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January 29, 2020 with the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19
U.S.C. § 4511(a)). General Note (“GN”) 11, HTSUS, implements the USMCA and sets forth the
criteria for determining whether a good is an originating good for purposes of the USMCA.
GN 11, HTSUS states, in relevant part:
(b) For the purposes of this note, a good imported into the customs territory of the
United States from the territory of a USMCA country … 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)); ….
The chairs contain nonoriginating materials from China; therefore, they are not goods
wholly obtained or produced entirely in a USMCA country under GN 11(b)(i). Moreover, under
GN 11(b)(ii), the subject merchandise is not a good produced entirely in Mexico, exclusively
from originating materials. Therefore, CBP must determine whether the non-originating
materials meet the requirement of GN 11(b)(iii) and GN 11(o).
The chairs are classifiable under subheading 9401.39.00, HTSUS. The applicable rule of
origin for the subject merchandise under GN 11(o) provides, in relevant part:
Change in tariff classification rules.
Chapter 94
…1. (A) A change to subheading 9401.10 through 9401.80 from any other chapter; or
(B) A change to subheadings 9401.10 through 9401.80 from subheading 9401.90,
whether or not there is also a change from any other chapter, provided there is a
regional value content of not less than:
(1) 60 percent where the transaction value method is used; or
(2) 50 percent where the net cost method is used.
Under GN 11(o), Rule 1(A) of Chapter 94, HTSUS, the nonoriginating mesh fabric and
rubber strips undergo the permissible tariff shift from another chapter to subheading 9401.30.80,
HTSUS (2012).1 While the information presented is not entirely clear how each segment of the
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The USMCA was drafted under the 2012 HTSUS. “Some tariff items do not have product-specific rules of origin
because the USMCA was negotiated using the 2012 HS. If the good in question corresponds to a tariff item without
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chair is produced in Mexico, not all components will undergo the permissible tariff shift because
they are still classified in subheading 9401.90, HTSUS (2012), as parts of chairs (nonoriginating
plywood and seat foundation, plastic and metal armrests, plastic gas lift cover, plastic casters,
metal seat foundation plate, metal back plate, and metal gas lift). Accordingly, section A is not
satisfied. Therefore, under section B, regional value content (“RVC”) must be analyzed.
GN 11(c)(ii)-(iii) governs the calculation of regional value content:
(ii) Transaction value method. --- An importer, exporter or producer of a good
may calculate the regional value content of the good on the basis of the following
transaction value method:
RVC = ((TV-VNM)/TV) X 100
where RVC means the regional value content of the good, expressed as a
percentage; TV means the transaction value of the good adjusted to exclude any
costs incurred in the international shipment of the good; and VNM means the
value of nonoriginating materials, including materials of undetermined origin,
used by the producer in the production of the good.
(iii) Net cost method.-- An importer, exporter or producer of a good may calculate
the regional value content of a good on the basis of the following net cost method:
RVC = ((NC - VNM)/NC) X 100
where NC means the net cost of the good; RVC means the regional value content,
expressed as a percentage; and VNM is the value of nonoriginating materials,
including materials of undetermined origin, used by the producer in the
production of the good.
The BOM includes the total costs of the originating and nonoriginating materials, as well
as the production costs. Based on the provided BOM, the net cost of the chairs is $68.87. The
bill of materials indicates that the value of the nonoriginating materials is $32.42. Here, based
on information provided by Veyer, the regional value content under the net cost method is 52.9
percent, which is above the amount required under the change in tariff classification rules of GN
11(o). Therefore, since the tariff shift requirements of GN 11 are satisfied, the chairs are eligible
for preferential tariff treatment under the USMCA.
a product-specific rule, until a rule is implemented, the analysis should be performed using the 2012 HTSUS tariff
item and its corresponding product-specific rule.” https://www.cbp.gov/trade/priority-issues/trade-agreements/free-
trade-agreements/USMCA/FAQs. Since subheading 9401.30, HTSUS, has been moved to subheading 9401.39,
HTSUS, CBP is using the 2012 version of the HTSUS for this portion of the ruling. Since the regulations for
marking under 19 C.F.R. § 102.11 incorporate an updated version of the HTSUS, the marking analysis is conducted
under the current HTSUS.
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2. Country of Origin 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
container) will permit in such a manner as to indicate to an 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
markings on the imported goods the country of which the good is the product. "The evident
purpose is to mark the goods so 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." United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).
Part 134, Customs and Border Protection (“CBP”) Regulations (19 CFR § 134),
implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.
Section 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 §§ 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 hierarchy for determining the country of origin of a good for marking purposes. See
19 C.F.R. § 102.11(a). Since the chairs will be imported from Mexico, section 102 will govern
the determination of whether the chairs are products of Mexico.
Section 102.11(a) provides a hierarchy for determining the country of origin of a good for
marking purposes. Applied in sequential order, the hierarchy establishes 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.
19 C.F.R. § 102.11(a)(1) is inapplicable because the chairs are not wholly obtained or
produced in a single country. 19 C.F.R. § 102.11(a)(2) is also inapplicable since the chairs are
not produced exclusively from domestic materials. Therefore, the foreign materials must undergo
the applicable tariff shift under 19 C.F.R. § 102.20 to be considered products of Mexico.
The pertinent tariff shift rule for subheading 9401.39, HTSUS, states:
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A change to subheading 9401.10 through 9401.80 from any other subheading
outside that group, except from subheading 9403.10 through 9403.89, and except
from subheading 9401.90 or 9403.90, when that change is pursuant to General
Rule of Interpretation 2(a).
Section 102.18(a) provides:
When General Rule of Interpretation (“GRI”) 2(a) is referred to in § 102.20 as an
exception to an allowed change in tariff classification, this means that such
change will not be acceptable for purposes of that section if the change results
from the assembly of parts into an incomplete or unfinished good which is
classifiable in the same manner as a complete or finished good pursuant to GRI
2(a).
General Rule of Interpretation 2(a) (“GRI 2(a)”) states:
Any reference in a heading to an article shall be taken to include a reference to
that article incomplete or unfinished, provided that, as entered, the incomplete or
unfinished article has the essential character of the complete or finished article. It
shall also include a reference to that article complete or finished (or falling to be
classified as complete or finished by virtue of this rule), entered unassembled or
disassembled.
Based on the information supplied in your submission, some of the materials
included in the chairs are classified under subheading 9401.90, HTSUS. As the chairs
are imported in an unassembled state, they will be classified as a complete chair pursuant
to GRI 2(a), and therefore the chairs would not undergo the requisite tariff shift.
Since an analysis of 102.11(a) has not produced a country of origin determination,
we proceed under the hierarchical country of origin rules to 19 C.F.R. § 102.11(b), which
provides:
Except for a good that is specifically described in the Harmonized System as a
set, or is classified as a set pursuant to General Rule of Interpretation 3, where the
country of origin cannot be determined under paragraph (a) of this section:
(1) The country of origin of the good is the country or countries of origin of the
single material that imparts the essential character to the good…
In determining the “essential character” of the finished good, Section 102.18 provides, in
relevant part:
For purposes of identifying the material that imparts the essential character to a
good under § 102.11, the only materials that shall be taken into consideration are
those domestic or foreign materials that are classified in a tariff provision from
which a change in tariff classification is not allowed under Part 120.20 specific
rule or other requirements applicable to the good. For purposes of paragraph
(b)(1):
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(i) The materials to be considered must be classified in a tariff provision from which
a change in tariff classification is not allowed under the specific rule or other
requirements applicable to the good under consideration. For example, in the
case of a good classified in HTSUS subheading 8607.11 (the rule for which
specifies a change to subheading 8607.11 from any other subheading, except
from subheading 8607.12, and except from subheading 8607.19 when that
change is pursuant to GRI 2(a)), the only materials that may be considered for
purposes of identifying the materials that impart the essential character to the
good are those that are classified in subheading 8607.11, 8607.12 and, if the tariff
shift is pursuant to GRI 2(a), 8607.19
Section 102.18(b)(2) provides:
For purposes of determining which one of two or more materials described in
paragraph (b)(1) of this section imparts the essential character to a good under §
102.11, various factors may be examined depending upon the type of good
involved. These factors include, but are not limited to, the following:
(i) The nature of each material, such as its bulk, quantity, weight or value; and
(ii) The role of each material in relation to the use of the good.
The upholstery fabric, plywood, rubber strips, armrests, gas lift cover, casters, seat
foundation plate mechanism, seat back with mesh and foam, nylon base, and gas lift are
classified as parts of chairs under subheading 9401.90, HTSUS and are entered unassembled into
the United States under GRI 2(a). Based on the information presented, the gas lift from China
seems to undergo little further production and would remain a Chinese material; however, other
segments of the chair, such as the back and seat of the chairs undergo further production by
being formed from foam, plywood and mesh fabric into the back and seat foundations.
In HQ H345343, dated July 21, 2025, CBP determined that the plastic molding, which
comprised the back and seat of the chairs, imparted the essential character to the chairs. Here,
we believe the seat back provides the essential character of the mesh chairs. The foam and mesh
for the seat back are cut and sewn in Mexico. The seat back makes up a large portion of the
chair, and the seat back is also what renders the chair usable as a task chair and not just as a
stool. Because the seat back is formed from Chinese mesh and a Mexican plastic back frame in
Mexico, under Section 102.11(b), we find that the country of origin of the chairs is Mexico.
3. Section 301 Measures
The United States Trade Representative (“USTR”) has determined that an additional ad
valorem duty of 25 percent will be imposed on certain Chinese imports pursuant to USTR’s
authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section
301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter
III, U.S. Note 20, HTSUS.
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When determining the country of origin for purposes of applying current trade remedies
under Section 301 or other additional duties, the substantial transformation analysis applies.
Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. The test for determining
whether a substantial transformation occurs 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.
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. National Hand Tool Corp. v. United States, 16 C.I.T. 308
(1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). “When processing consists primarily of assembly,
CBP is hesitant to find that a substantial transformation occurred.” HQ H315298, dated June 15,
2021.
In order to determine whether a substantial transformation occurs when components of
various origins are assembled into completed products, the determinative issue is the extent of
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 C.I.T. 204 (1983), aff’d, 741 F.2d 1368 (Fed.
Cir. 1984). The country of origin of the item’s components, extent of the processing that occurs
within a country, and whether such processing renders a product with a new name, character, and
use are primary considerations in such cases. HQ H215657, dated April 29, 2013. Additionally,
factors such as the resources expended on product design and development, extent and nature of
post-assembly inspection and testing procedures, and the degree of skill required during the
actual manufacturing process may be relevant when determining whether a substantial
transformation has occurred. Id. No one factor is determinative. Id.
In Carlson Furniture Industries v. United States, 65 Cust. Ct. 474 (1970), the U.S.
Customs Court ruled that U.S. operations on imported chair parts constituted a substantial
transformation, resulting in the creation of a new article of commerce. The court determined that,
because the importer had to perform additional work on the imported chair parts and add
materials to create a functional article of commerce, the imported parts were not chairs in an
unassembled or knocked-down condition. Id. at 478. After importation, the importer assembled,
fitted, and glued the wooden parts together, inserted steel pins into the key joints, cut the legs to
length and leveled them, and in some instances, upholstered the chairs and fitted the legs with
glides and casters. Consequently, the court found that the operations were substantial in nature,
and that the processing performed in the United States constituted more than the mere assembly
of finished parts. Id.
In NY I83901, dated July 8, 2002, CBP addressed the country of origin of a chair made
through similar processing:
The chair will be manufactured as follows: The master coils of steel will be
imported to China from Taiwan and processed into tubing. The factory in China
will process the tubing into the chair parts, assemble the metal chair parts into a
chair frame sub assembly, and then powder coat the metal chair frame sub
assembly. The frame will then be exported to Taiwan where another factory will
blow mold the plastic, assemble the plastic seat and back onto the chair, and put
the chair into retail packaging. Since the chair frames (furniture parts) are made in
China but the chair is completed (seats and backs) in Taiwan, the chair is
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considered a product of Taiwan and must be marked to reflect Taiwan as the
country of origin.
Here, the assembly of the chairs in Mexico is a substantial transformation. The mesh
fabric is cut to shape and sewn; the wood components are drilled and riveted; the backrest frame,
decorative cover, and gas lift are molded from plastic; the foam is cut to shape; and the rubber
strips are cut to specific lengths. As in Carlson Furniture, the Mexican manufacturer modifies
the components of the chairs and does not simply assemble components with a predetermined
use. Therefore, we find the processing in Mexico constitutes a substantial transformation.
HOLDING:
The chairs qualify for preferential tariff treatment under the USMCA when imported into
the United States. The country of origin of the chairs will be Mexico, and Section 301 duties
will not apply.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “{e}ach ruling letter is issued on
the assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by a {CBP} field office to
the transaction to which it is purported to relate is subject to the verification of the facts
incorporated in the ruling letter, a comparison of the transaction described therein to the actual
transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this
merchandise is entered. If the documents have been filed without a copy, this ruling should be
brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch
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