OT:RR:NC:N2:206
Adrian Gonzalez
Global Alliance Solutions LLC.
201 S Austin Dr. Pharr, TX 78577
RE: The country of origin of a brake caliper
Dear Mr. Gonzalez:
In your letter dated November 3, 2023, you requested a country of origin ruling on the brake caliper for marking purposes and for purposes of applying trade remedies under Section 301 of the Trade Act of 1974, as amended, from China, which you filed on behalf of your client, BBB Industries.
The subject article is a brake caliper (Part Number 99P17306B), which is a crucial component of a disc brake system in a vehicle. Its primary function is to apply pressure to the brake pads, which in turn creates friction against the brake rotor or disc. This friction slows down or stops the rotation of the wheel, allowing the vehicle to come to a controlled stop. The brake caliper houses the brake pads and contains pistons or cylinders that push the pads against the rotor when the brakes are applied. When the driver presses the brake pedal, hydraulic pressure is generated, which is transmitted to the caliper through brake lines or hoses. This pressure causes the pistons inside the caliper to move, pushing the brake pads against the rotor.
You state that new and unused brake calipers are imported from China into Mexico, where they undergo a rigorous remanufacturing process, similar to the refurbishment or rebuilding of used or worn, non functional brake calipers, to ensure that it meets BBB’s standards of quality. This procedure includes disassembly, meticulous inspection, replacement of any necessary parts, reassembly, and thorough testing. During the remanufacturing process, the worn or damaged parts of the brake caliper core are carefully inspected, disassembled, and cleaned. Any faulty or worn components, such as seals, pistons, or sliders, are replaced with new or reconditioned ones. The core also undergoes machining or sandblasting to restore its original dimensions and surface finish.
Once any necessary repairs and replacements are completed, the brake caliper core is reassembled and tested to ensure proper functioning and adherence to safety standards. The remanufactured brake caliper core should meet or exceed the performance specifications of a brand-new unit.
The "country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. The "country of origin" is defined in 19 CFR 134.1(b) 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 this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin."
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 required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11.
Applied in sequential order, 19 CFR Part 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 brake caliper is 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 caliper, and paragraph (a)(3) must be applied next to determine the origin of the finished article. The brake caliper is classified in subheading 8708.30, Harmonized Tariff Schedule of the United States (HTSUS). The tariff shift requirement in Part 102.20 for subheading 8708.30 states:
A change to mounted brake linings and pads from any other heading, except from brake linings and pads of subheading 6813.20 or 6813.81; or
A change to other brakes or servo-brakes or parts thereof from any other heading.
The brake calipers from China are classified in the same subheading as the remanufactured brake calipers from Mexico. Thus, no change in tariff classification occurs. Therefore, the tariff shift is not met. As a result, Part 102.11(a) does not apply.
Section 102.11(b) states, in relevant part:
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 [("GRI")] 3, where the country of origin cannot be determined under paragraph (a) of this section:
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….
The brake caliper is made in China and does not incorporate any components from Mexico. Accordingly, the country of origin of the brake caliper for marking purposes will be China.
Regarding the applicability of Section 301 trade remedies to the brake caliper under consideration, CBP relies on the substantial transformation analysis when determining the country of origin for purposes of applying Section 301 trade remedies. The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
The Chinese brake caliper does not emerge from the remanufacturing process in Mexico with a new name, character or use. Although the remanufacturing process enhances the caliper’s performance, it does not change its intended designation, function, and use. As a result, it is the opinion of this office that no substantial transformation occurs in this case. Therefore, the brake caliper is considered a product of China and will be subject to the additional duties under Section 301, of the Trade Act of 1974, as amended.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division