Mr. Alex Romero
A.F. Romero Co.
1749 Stergios Road
Calexico, CA 92231
RE: The country of origin of steel tubing; Applicability of Section 232 Duties
Dear Mr. Romero:
This is in response to your letter dated June 27, 2018, in which you requested a binding ruling on behalf of Merchant Metals Inc., as to the country of origin of steel tubing/pipe for use as fence posts in ornamental fence panels.
Steel tubing manufactured in the United States is exported to Mexico where it will be painted, passed through an iron phosphate treatment to inhibit rust and then chemically etched. The tubing is then imported back to the United States. These square tubes are made to various sizes ranging from 2” x 2” to 4” x 4” and have lengths ranging from 3’ to 10’.
You state that the raw tubing is classified in subheading 7306.61.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel, other, welded, of noncircular cross section, of square or rectangular cross section, having a wall thickness of less than 4 mm, of iron or nonalloy steel.
Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), as amended, provides that unless excepted, every article of foreign origin imported into the U.S. 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 U.S. the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements of 19 U.S.C. 1304. Pursuant to 19 CFR 134.1(b), 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Since in this case, the raw tube/pipe is shipped to Mexico to undergo further processing, the NAFTA Marking Rules set forth at 19 CFR 102.20 would apply. Based on your classification of the imported pipe in subheading 7306.61.5000, HTSUS, the rule of origin set forth at 19 CFR 102.20(n) would be:
7301-7307…………… A change to heading 7301 through 7307 from any other heading, including another heading within that group….
The raw pipe enters Mexico classified in heading 7306, HTSUS, and after treatment, it is returned to the United States classified in heading 7306, HTSUS. As such, a change of heading does not occur.
Since the tariff shift rule set forth in 19 CFR 102.20 is not satisfied, pursuant to 19 CFR 102.11(b)(1), the country of origin of the good would be the country of the single material that imparts the essential character to the good. The rule of interpretation set forth in 19 CFR 102.18(b)(1)(iii) states that if there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under 102.11. Therefore, the raw pipe would be the single material that imparts the essential character to the good.
Accordingly, the country of origin of the imported finished pipe under 19 CFR 102.11 would be the country of origin of the raw pipe for country of origin marking and duty purposes. In this particular case, it would be the United States, and therefore in our opinion the tubing is not subject to Section 232 duties.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Mary Ellen Laker at [email protected]
Steven A. Mack
National Commodity Specialist Division