CLA-2-82:OT:RR:NC:N1: 118
Christopher Li
Test Rite Products Corporation
1900 S Burgundy Pl. Ontario, CA 91761
RE: The tariff classification and country of origin of a 31-Piece ½ inch Drive Socket Set
Dear Mr. Li:
In your letter dated January 5, 2023, you requested a country of origin determination ruling on a 31-Piece ½ inch Drive Socket Set, item# GM4212-PT.
The set contains one ½” pear-head ratchet handle, twenty-eight various size metric sockets and two ½” extension bars. Each article is made of chrome-vanadium steel. You have stated that these articles will be packaged for retail sale in China with a Chinese-origin blow-molded fitted storage case.
In your request, you listed the classification of the set as 8466.10.0175, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories suitable for use solely or principally with the machines of headings 8456 to 8465, including work or tool holders, self-opening dieheads, dividing heads and other special attachments for the machines; tool holders for any type of tool for working in the hand: Tool holders and self-opening dieheads: Other”. This is incorrect. The 31 - Piece ½ inch Drive Socket Set contains sockets, drives and extensions. These articles are provided for within heading 8204, HTSUS, in accordance with General Rule of Interpretation (GRI) 1.
As such, the applicable subheading for the 31-Piece ½ inch Drive Socket Set, item# GM4212-PT, will be 8204.20.0000, HTSUS, which provides for “Hand-operated spanners and wrenches (including torque meter wrenches but not including tap wrenches); socket wrenches, with or without handles, drives or extensions; base metal parts thereof: Socket wrenches, with or without handles, drives and extensions, and parts thereof”. The general rate of duty will be 9% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
Your letter describes the following manufacturing processes for the ratchet handle, sockets, and extensions:
Ratchet Handle
Raw steel rod is exported from China into Vietnam, where it is drop forged to the shape and size of the ratchet handle. The fully formed ratchet handle is then exported to China where the inner hole is CNC machined into the handle. It is further ground, polished, plated, and heat-treated. Finally, the handle is assembled with Chinese-origin parts, which include the ratchet head, cover, springs, pawl, and buttons.
Sockets
Raw steel rod is exported from China into Vietnam, where it is cut and cold forged to the final length and approximate shape of each socket. The sockets are further turned and milled through a CNC lathe, which gives them their final shape. The sockets are then exported to China, where they are heat-treated, polished and plated. A stamping machine stamps the size and logo into each socket.
Extensions
Raw steel rod is exported from China into Vietnam, where it is cut and cold forged into the shape and size of each extension. Further in Vietnam, a hole is drilled in order to accommodate the spring and ball. The extensions are then exported to China, where they are heat-treated, polished and plated. A stamping machine stamps the size and logo into each socket. Finally, the extensions are assembled with Chinese origin springs and balls.
Regarding your request for the appropriate country of origin for the finished 31-Piece ½ inch Drive Socket Set, item# GM4212-PT, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means 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 this part; 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, 69 C.C.P.A. 151 (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). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive, and assembly operations that are minimal will generally not result in a substantial transformation.
In regard to the ratchet handle, it is our view that the ratchet handle’s manufacturing operations in Vietnam renders the end-use of the ratchet handle predetermined, as the handle could not be used for any other purpose. The ratchet handle provides the essence of the finished product because it is chiefly responsible for the functional aspect of the ratchet by providing the needed torque and leverage of the ratchet. Further, it is not substantially changed by the addition of the Chinese-origin parts or the minor assembly operations performed in China. In view of these facts, the ratchet handle is considered a product of Vietnam.
Regarding the sockets, it is our opinion that it is the forging operations that impart the essence of the sockets. In Vietnam, the sockets are forged and take on the shape and size of the finished sockets. Based on the provided description and pictures of the finishing operations performed in China, the forged sockets are not substantially changed so as to transform them into a new article with a different name, character or use. Therefore, it is the opinion of this office that the country of origin of the sockets will be Vietnam.
Regarding the extensions, it is our view that it is the forging operations that impart the essence of the extensions. In Vietnam, the extensions are forged and take on the shape and size of the finished extensions. Based on the provided description and pictures of the finishing operations performed in China and the addition of the Chinese components, the forged sockets are not substantially changed so as to transform them into a new article with a different name, character or use. Therefore, it is the opinion of this office that the country of origin of the extensions will be Vietnam.
As we have determined that each article in the set is of Vietnam origin (i.e., the ratchet handle, sockets and extensions), we conclude that the country of origin of the 31-Piece ½ inch Drive Socket Set, item# GM4212-PT, will be Vietnam.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 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, please contact National Import Specialist Anthony Grossi at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division