OT:RR:CTF:VS H352465 RRB
Juan Moreno
Sandler, Travis & Rosenberg, PA
414 Jackson Street
San Francisco, CA 94111
RE: County of Origin; United States-Colombia Trade Promotion Agreement (CTPA);
Regional Value Content; Lifthauler Trailers
Dear Mr. Moreno:
This is in response to your correspondence, dated August 12, 2025, on behalf of
Brandes OES, LLC (“Brandes”), requesting a binding ruling pursuant to 19 CFR §
177.1. Your request concerns the country of origin and eligibility for preferential tariff
treatment under the U.S.-Colombia Trade Promotion Agreement (“CTPA”) of certain
Lifthauler Trailers.
Although the importer has not requested confidential treatment, the business
confidential information contained within brackets in italics will not be released to the
public and will be withheld from the published version of this ruling.
FACTS:
The products at issue are 45-foot Combo Lifthauler Trailers (“Lifthauler Trailers”)
manufactured in Colombia. The Lifthauler Trailers have an air-ride suspension
designed for commercial transportation. They incorporate a steel chassis and a load-
bearing flatbed aluminum deck, along with integrated mechanical, pneumatic, and
electrical systems.
You explain that the Lifthauler Trailers are manufactured in Colombia from CTPA
originating and nonoriginating materials. The processing operations in Colombia
consist of the following:
• laser cutting, chamfering, CNC bending, and hole routing of steel and aluminum
components;
• fabrication and welding of the structural trailer chassis frame and load-bearing
platform;
• assembly of functional subassemblies, including air-ride suspension modules,
electrical harnesses, kingpin system, and floor decking components;
• final integration of all subassemblies and installation of tires, axles, lights, wiring, and
mechanical fittings;
• painting and surface treatment to ensure corrosion resistance and final finishing; and
• quality assurance processes.
You state that the processes are performed by skilled technicians in Colombia
using advanced manufacturing equipment. The subject trailer will be complete and
operational upon export. It is intended for use as a freight transport platform.
You further state that the finished trailer is classified in subheading 8716.39.00,
Harmonized Tariff Schedule of the United States (“HTSUS”), as “Trailers and semi-
trailers; other vehicles, not mechanically propelled; and parts thereof: Other trailers and
semi-trailers for the transport of goods: Other: Other: Other: Platform type.”
In support of this ruling request, you also provided a costed bill of materials. The
costed bill of materials sets forth the country of origin of each component, value of each
component, and whether each component is classified outside of heading 8716,
HTSUS. According to this document, the Lifthauler Trailers are made up of the
following components:
• Trailer stickers from Colombia, China
• Flooring components from China and Malaysia that are assembled in Colombia
into floor decking
• Various fasteners from China
• Air system components from China, Mexico, and the United States are
assembled into an air tank assembly in Colombia
• Electrical system components from China, the United States, and Mexico,
including a harness kit, assembled in Colombia
• Suspension system components from Turkey that are assembled in Colombia
• Miscellaneous components from the United States and Colombia, assembled
into integrated subassemblies in Colombia
• Valve components from the United States
• Axles from China
• Landing gear from the United States that are assembled and installed in
Colombia
• Electrical Peterson light kit components from the United States and China and
installed in Colombia
• Tires from Colombia
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• Steel wheels from China
• Winch assembly components from China assembled in Colombia
The costed bill of materials further sets forth the cost for each of the components, as
well as final processing, labor, profit, taxes, and overhead in Colombia. Some of the
higher costs are as follows:
Material Description Country of Origin Colombia/USA Value of
Materials (VOM)
VIN Tag Originating [$***]
Decal Sheet Set Originating [$***]
DOT Bumper Plate Originating [$***]
Miscellaneous King Pin Originating [$***]
Spool Bolster Component
Used in Integrated Assembly
Mudflap Originating [$***]
Valve Components Originating [$***]
Harness Kit Originating [$***]
Dump Valves for Air System Originating [$***]
Landing Gear Originating [$***]
“Lic Plate Lite” for Electrical Originating [$***]
System
Air Brake Hoses Originating [$***]
Front Electrical Connections Originating [$***]
Used in Electrical System
Floor Braces for Integrated Originating [$***]
Subassemblies
Air Tank Assembly Originating [$***]
Component
Peterson Light Kit Originating [$***]
Components
Tires Originating [$***]
Suspension System Nonoriginating [$***]
Components
Axles Nonoriginating [$***]
Brass Kit Nonoriginating [$***]
Steel Wheels Nonoriginating [$***]
Winch Assembly Nonoriginating [$***]
Colombia Vendor Costs Colombia/USA Value of Materials
(VOM)
Labor [$***]
Overhead Allocation [$***]
Engineering & Design [$***]
Vendor Profit [$***]
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Vendor Colombian Tax Payments [$***]
In addition to the costed bill of materials, you also provided visual and narrative
documentation of the manufacturing operations performed in Colombia. This includes
process diagrams, step-by-step descriptions, and photographs in support of your ruling
request.
In your ruling request, you assert that based on the costed bill of materials, the
regional value content in Colombia is close to 60 percent based upon the build-up
method. Based on this document, the total purchase price for the subject merchandise
is $29,167.67. In an email, dated September 15, 2025, you confirmed you and your
client’s understanding that the purchase price of $29,167.67 represents the adjusted
value of the merchandise (exclusive of transportation, insurance and related services
incident to the international shipment of the merchandise from the country of exportation
to the country of importation). You further state that while some nonoriginating
components may be classified as parts of subheading 8716.90, HTSUS, none are
classified in any of the other subheadings under heading 8716, HTSUS. You also
assert that the processing operations performed in Colombia effect a substantial
transformation of the imported components sufficient to confer Colombian origin for tariff
and marking purposes.
ISSUES:
(1) Whether the subject Lifthauler Trailers qualify for preferential tariff treatment under
the CTPA.
(2) What is the country of origin of the subject Lifthauler Trailers for purposes of marking
and trade remedies?
LAW AND ANALYSIS:
1. Eligibility under the CTPA
The U.S.-Colombia Trade Promotion Agreement Implementation Act (“CTPA”),
Public Law 112-42, 125 Stat. 462, is implemented in the Harmonized Tariff Schedule of
the United States at General Note (“GN”) 34. GN 34(b) provides in relevant part:
(b) For the purposes of this note, subject to the provisions of subdivisions (c),
(d), (n) and (o) thereof, a good imported into the customs territory of the
United States is eligible for treatment as an originating good of Colombia or
of the United States under the terms of this note if–
(i) the good is wholly obtained or produced entirely in the territory of
Colombia or of the United States, or both;
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(ii) the good is produced entirely in the territory of Colombia or of the
United States, or both, and--
(A) each of the nonoriginating materials used in the production of the
good undergoes an applicable change in tariff classification
specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-
content or other requirements set forth in such subdivision (o);
and
satisfies all other applicable requirements of this note and of
applicable regulations; or...
Since the Lifthauler Trailers contain nonoriginating materials, they will not qualify
as originating pursuant to GN 34(b)(i). We must therefore consider whether the
Lifthauler Trailers qualify as originating pursuant to GN 34(b)(ii).
You state that the Lifthauler Trailers are classified in subheading 8716.39.00,
HTSUS, which provides for “Trailers and semi-trailers; other vehicles, not mechanically
propelled; and parts thereof: Other trailers and semi-trailers for the transport of goods:
Other: Other: Other: Platform type.” We agree. See, e.g., New York Ruling Letter
(“NY”) L84115, dated April 21, 2005, and NY F80959, dated December 22, 1999. The
applicable rule of origin set forth in GN 34(o), Chapter 87, Rule 11 provides as follows:
11. (A) A change to subheading 8716.10 through 8716.80 from any other
heading; or
(B) A change to subheading 8716.10 through 8716.80 from subheading
8716.90, whether or not there is also a change from any other heading,
provided that there is a regional value content of not less than:
(1) 35 percent under the build-up method, or
(2) 45 percent under the build-down method.
Based on the costed bill of materials, some of the nonoriginating components do
not satisfy the tariff shift requirement set forth in GN 34(o), Chapter 87, Rule 11(A)
because they remain classified in heading 8716, HTSUS. Therefore, we must turn to GN
34(o), Chapter 87, Rule 11(B).
Per GN 34(o), Chapter, 87, Rule 11(B), which sets forth the RVC requirement
under either the build-up or build-down method, you state that according to the costed bill
of materials, the value of the Colombian-origin chassis frame, deck, and integrated
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assemblies, combined with final processing, labor and overhead, constitutes more than
35% of the adjusted value of finished trailer using the build-up method.
Pursuant to GN 34(g)(i), the RVC for a good referred to in subdivision (o) of this
note on the basis of the build-down method described in subdivision (g)(i)(A) or the build-
up method described in subdivision (g)(i)(B) of this note shall be calculated as follows:
(A) For the build-down method, the regional value content of a good may be
calculated on the basis of the formula RVC =((AV - VNM) / AV) X 100,
where RVC is the regional value content, expressed as a percentage; AV
is the adjusted value of the good; and VNM is the value of nonoriginating
materials that are acquired and used by the producer in the production of
the good, but does not include the value of a material that is self-
produced, or
(B) For the build-up method, the regional value content of a good may be
calculated on the basis of the formula RVC = (VOM / AV) X 100, where
RVC is the regional value content, expressed as a percentage; AV is the
adjusted value of the good; and VOM is the value of originating materials
that are acquired or self-produced, and used by the producer in the
production of the good.
Per GN 34(g)(ii),
(A) For the purpose of calculating the regional value content of a good under
subdivision (g)(i)..., the value of a material is:
(1) In the case of a material that is imported by the producer of the
good, the adjusted value of the material;
…
(3) in the case of a material that is self-produced, the sum of—
(I) all expenses incurred in the production of the material,
including general expenses, and
(II) an amount for profit equivalent to the profit added in the
normal course of trade.
(B) The value of materials may be further adjusted as follows:
(1) for originating materials, the following expenses, if not included in the
value of an originating material calculated under subdivision (A) above,
may be added to the value of the originating material:
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(I) the costs of freight, insurance, packing and all other
costs incurred in transporting the material within or between
the territory of Colombia or of the United States, or both, to
the location of producer;
(II) duties, taxes and customs brokerage fees on the material
paid in the territory of Colombia or of the United States, or
both, other than duties and taxes that are waived, refunded,
refundable or otherwise recoverable, including credit against
duty or tax paid or payable; and
(III) the cost of waste and spoilage resulting from the use of the
material in the production of the good, less the value of
renewable scrap or byproducts;…
In addition, GN 34(e)(iii) defines the term “adjusted value” as follows:
…the value determined in accordance with Articles 1 through 8, Article 15
and the corresponding interpretive notes of the Agreement on
Implementation of Article VII of the General Agreement on Tariffs and
Trade 1994 referred to in section 101(d)(8) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(8)), adjusted, if necessary, to exclude
any costs, charges or expenses incurred for transportation, insurance and
related services incident to the international shipment of the merchandise
from the country of exportation to the place of importation.
Under the first part of GN 34(o), Chapter 87, Rule 11(B), whether or not there is a
change to subheading 8716.39, HTSUS, from any other heading, there must be a
change to that subheading from subheading 8716.90, HTSUS. You explain that those
nonoriginating components that remain classified in heading 8716 are classified as
parts of trailers under subheading 8716.90, HTSUS. Assuming these classifications to
be accurate, we find that the tariff shift requirement in GN 34(o), Chapter 87, Rule 11(B)
is met.
In order to calculate the VOM under the build-up method, we begin by adding the
value of all the originating components (i.e., those of U.S. or Colombian origin). The
costed bill of materials also provides values for labor, overhead, engineering & design,
vendor profit and vendor Colombian tax payments, which you state are incurred in
Colombia and are not connected to the importer.
Pursuant to GN 34(g)(i)(B), the VOM under the build-up method is the value of
originating materials that are acquired or self-produced, and used by the producer in the
production of the good. Therefore, we must look to GN 34(g)(ii)(A)(3), which provides
that the value of a material that is self-produced for purposes of calculating the regional
value content must include all expenses incurred in the production of the material,
including general expenses, and an amount for profit equivalent to the profit added in
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the normal course of trade. Moreover, GN 34(g)(ii)(B)(1) must be taken into account.
This provision states that the VOM may include the cost of freight, insurance, packaging
and all other costs incurred in transporting the material within or between Colombia or
the United States or both, to the location of the producer; duties, taxes and customs
brokerage fees; and the cost of waste and spoilage. Accordingly, values for labor,
overhead, engineering & design, vendor profit and vendor Colombian tax payments,
which you state are incurred in Colombia and are not connected to the importer, should
be included when calculating the VOM under the build-up method.
Here, the VOM is calculated by adding up the value of all components of U.S.
and Colombian origin plus labor, overhead, engineering & design, vendor profit and
vendor Colombian tax payments. The total VOM calculated by adding up these items is
$17,145.09. Because you confirmed that the purchase price of $29,167.67 represents
the adjusted value of the merchandise (exclusive of transportation, insurance and
related services incident to the international shipment of the merchandise from the
country of exportation to the country of importation), we will divide the VOM by this
figure as the adjusted value. Thus, using the formula from GN 34(g)(i)(B), the RVC
under the build-up method is ($17,145.09 / $29,167.67) x 100, which is 58.8%.
Because the RVC under the build-up method is greater than 35%, the applicable rule of
origin under GN 34(o), Chapter 87, Rule 11(B)(1) is satisfied. As the requisite rule of
origin for merchandise classified in subheading 8716.39.00, HTSUS, is met, we agree
that the Lifthauler Trailers will qualify as originating goods under the CTPA.
2. Country of Origin for Marking and Trade Remedies
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).
Part 134 of the U.S. 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), 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. When
determining the country of origin for purposes of applying current trade remedies, the
substantial transformation analysis is also applicable. See, e.g., Headquarters Ruling
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Letter (“HQ”) H301619, dated November 6, 2018. A substantial transformation occurs
when, as a result of manufacturing process, a new and different article emerges, having
a distinct name, character or use, which is different from that originally possessed by
the article or material before being subjected to the manufacturing process. See United
States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).
In National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d
1201 (Fed. Cir. 1993), the court held that hand tool components imported from Taiwan
and used to make flex sockets, speeder handles, and flex handles were not
substantially transformed in the United States. The court focused on the fact that the
components had been cold-formed or hot-forged into their final shape before
importation and their use was predetermined at the time of importation. Id. at 311-312.
The court stated that the fact that there was only one predetermined use of the imported
articles did not preclude the finding of substantial transformation but that the finding
would be based on a “totality of the evidence.” Id. at 312.
In order to determine whether a substantial transformation occurs when
components of various origins are assembled into completed products, CBP considers
the totality of the circumstances and makes such determinations on a case-by-case
basis. 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. Additionally,
factors such as the resources expended on product design and development, the extent
and nature of post-assembly inspection and testing procedures, and worker skill
required during the actual manufacturing process will be considered when determining
whether a substantial transformation has occurred. No one factor is determinative.
In HQ H022169, dated May 2, 2008, CBP found that an imported mini-truck
glider was substantially transformed as a result of assembly operations performed in the
United States to produce an electric mini-truck. The decision was based on the fact that
under the described assembly process, the imported glider lost its individual identity and
became an integral part of a new article possessing a new name, character, and
use. In addition, a substantial number of the components added to the imported glider
were of U.S. origin. The glider was assembled with approximately 87 different
components, 68 of which were of U.S. origin. The batteries, charger, and gear box
were of U.S. origin, and other major parts, including the electric motor and brakes, were
of foreign origin.
Similarly, in NY N324668, dated March 24, 2022, CBP considered the country of
origin of a mobile scissor lift with a hydraulic lifting platform. The subject merchandise
consisted of five major structural subassemblies produced in Poland, including the arm
platform, chassis, counterweight and assembly pin. The control system included
electrical components sourced from Germany and Italy, while the driving system
consisted of a gear box sourced from India. The hydraulic system contained
components sourced from Poland, Germany, and Italy. The electrical system consisted
of a motor from Germany, sensor from Italy, switch from France, harness cable from
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Poland, battery from Vietnam, and battery charger from Mexico. Other components
consisted of tires, fastening pieces, plastic covers, and fuses sourced from China.
Production of various subassemblies and the final mobile scissor lift in Poland consisted
of machining the metal components for the arm subassembly and chassis by way of a
sawing tube, punching holes, lathing, laser cutting, pressing, drilling, tapping, bending,
burring, and boring. This was followed by welding of the metal components. Final
assembly of the subassemblies into the mobile scissor lift consisted of installation,
fastening, wiring of the motor and motor controller, mounting, testing, calibration, and
inspection. Here, CBP found that the processing performed in Poland was not simple;
in addition to the final assembly in Poland, all of the major structural subassemblies
were manufactured from steel material and transformed into integral subassemblies in
Poland. Moreover, the complex operations performed in Poland resulted in the
individual parts losing their separate identities such that the country of origin of the
mobile scissor lift was Poland.
On the other hand, in HQ H267876, dated December 23, 2015, CBP considered
whether intermodal shipping containers made of various components, including foreign
origin side, roof, and floor panels were substantially transformed by assembly
operations in the United States. It found that the assembly operations did not change
the predetermined use of the panels, all of which originated from one country. Relying
on National Hand Tool, CBP concluded that the essential character of the intermodal
shipping container was imparted by the foreign origin panels, which like National Hand
Tool, were already formed in their final shape prior to importation. See also, HQ
H273529, dated May 13, 2026 (holding that the country of origin of intermodal shipping
containers was Korea because the Korean-origin roof and side panels imparted the
essential character of the intermodal shipping containers whereas the assembly
operations in the United States were not sufficient to result in a substantial
transformation).
In the instant matter, while certain foreign components, including trailer axles,
steel plates and wheels, fasteners, and suspension components, are integrated into the
final assembly, many of the most important subassemblies, including the air-ride
suspension modules, electrical harnesses and electrical system, kingpin system, and
floor decking components, are assembled in Colombia through complex manufacturing
operations described above. Additionally, laser cutting, chamfering, CNC bending, and
hole routing of steel components that are integral to the trailer chassis frame, and
fabrication and welding of the structural trailer chassis frame and load-bearing platform,
are complex operations performed in Colombia. As in NY N324668 and HQ H022169,
the most complex assembly operations in the instant matter occur in the same country
as where the most significant components or subassemblies are also manufactured.
Based on the totality of the circumstances, where functional and complex
subassemblies are manufactured in Colombia, where the structural chassis frame is
manufactured in Colombia, and where the final assembly operations take place in
Colombia to manufacture the finished Lifthauler Trailer, we find that the non-Colombian
components are substantially transformed and lose their individual identities to become
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integral components of the finished trailer. Accordingly, the country of origin of the
Lifthauler Trailer will be Colombia for purposes of marking and trade remedies.
HOLDING:
The country of origin of the subject Lifthauler Trailers for purposes of marking
and trade remedies will be Colombia.
The subject Lifthauler Trailers qualify for preferential tariff treatment under the
CTPA.
A copy of this ruling letter should be attached to the entry documents filed at the
time the goods are entered. If the documents have been filed without a copy of this
ruling, it 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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