CLA-2-94:OT:RR:NC:N4:463
TARIFF NO: 9403.20.0050; 9903.88.03
Maureen Sharma
Mullally International Inc.
1305 Republican Street
Seattle, WA 98109
RE: The country of origin of a planter dolly
Dear Ms. Sharma:
This ruling is being issued in reply to your letter dated August 28, 2024, requesting the country of origin for a planter dolly. In lieu of a sample, illustrative literature, photos, cost data and a detailed description of manufacturing operations were provided.
The item, identified as Planter Caddy, model number 1807149, is a wheeled circular platform designed to display and move potted plants. It measures 15" in diameter and 3" high. The top plate is made of cold-rolled sheet steel with multiple flower petal-shaped cutouts emanating from the center. A steel ring of square tubing is welded to the underside of the top plate for strength. The top plate sits atop four steel swivel castors with plastic treads, two of which have locking brakes. The castors are affixed to nuts welded to the underside of the top plate. The planter dolly is powder coated, has a maximum capacity of 250 lbs., and weighs approximately 3.7 lbs. It will be sold in packages of two through big box stores for home use. See image below.
Planter Caddy 1807149
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CHINESE ORIGIN MATERIALS
Swivel castors with threaded stems (2 with brakes, 2 without)
Round top plate
Nuts (x 4)
CHINESE OR VIETNAMESE ORIGIN MATERIALS
Rolls of square tubing
PROCESSING OPERATIONS PEFORMED IN CAMBODIA
Bulk materials are received from China (and possibly Vietnam)
Lengths of square steel tube are bent into a ring, cut, welded, ground and drilled
Round top plate is ground and sanded
Ring and top plate are welded together
Nuts (x 4) are welded to top plate
Slag/rough edges are ground
Assembly undergoes a chemical bath, cathode electroplating and powder coating
Castors are affixed to the welded nuts
Finished planter dolly is inspected and packaged
CLASSIFICATION
Although classification was not requested, essentially similar planter dollies in NYRL N333922 and N339090 were classified as non-household metal furniture in subheading 9403.30.0090, Harmonized Tariff Schedule of the United States (HTSUS). However, in this ruling request, you state that the planter dolly will be sold through a big box retailer and that its primary use will be to display plants and planters in the home, garden or patio. Since the primary users will be households, the applicable classification for subject Planter Caddy, model number 1807149, will be subheading 9403.20.0050, HTSUS, which provides for "Other furniture and parts thereof: Other metal furniture: Household: Other: Other." The general rate of duty will be free.
COUNTRY OF ORIGIN
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." 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). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In the Uniroyal case, the court held that a shoe upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe."
According to the provided materials, the Chinese-made top panel, bolts, castors, and square tubing (the latter may be of Vietnamese origin) are imported into Cambodia for further processing. In Cambodia, 1) the top plate is ground and sanded, 2) the square steel tube is bent into a ring, cut, welded, ground and a drain-hole is drilled, 3) the top plate and circular tube are welded together, 4) the nuts are welded to the top plate, 5) the slag/rough edges are ground, 6) the complete assembly undergoes a chemical bath, cathode electroplating and powder coating, 7) the castors are affixed to the welded nuts, and finally, 8) the finished planter dolly is inspected and packaged for export.
You assert that the manufacturing operations—with overwhelmingly Chinese materials—result in the creation of a distinct article with a new name, character and use, and that the processing performed in Cambodia amounts to a substantial transformation and not simply an assembly operation. We disagree.
The Chinese-origin top plate—the planter dolly’s single most expensive component that accounts for more than one third of the material costs—is already dedicated for use as a planter dolly part when imported into Cambodia, provides the functionality of supporting the planter and is largely responsible for the planter dolly’s aesthetic appearance. The Chinese-origin castors, which account for almost half of the material costs, provide the planter dolly with mobility (the planter dolly’s primary functionality) and lift the planter so that it does not mar the floor (the planter dolly’s secondary functionality.) The ring tube welded to the underside of the top plate is the sole component manufactured in Cambodia. Although it provides rigidity to the planter dolly, it cannot be seen, its manufacture is relatively inexpensive and simple and requires little specialized manufacturing equipment or skill—in short, it is only a minor component. The act of welding the nuts to the top plate, performing metal finishing operations and affixing the castors to create a finished planter dolly are all relatively simple operations that account for slightly more than one quarter of the total cost of the article.
In the Uniroyal case, the court held that a shoe upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe." The Chinese top plate is akin to the shoe upper in the Uniroyal case, as it is the very essence of the completed planter dolly. Additionally, the Chinese-origin castors and nuts, and the relatively simple and low-skilled manufacturing operations performed in Cambodia, further the argument that the country of origin of the subject planter dolly remains China.
In the essentially similar NYRL N339090, the top plate was made in Cambodia. In this case, the top plate is made in China. The top plate is of such significance to the functioning of the planter dollies that the change in its country of origin will result in a change of origin of the complete plantar dolly.
Based upon the foregoing, the Chinese top plate, castors and nuts are not substantially transformed by the operations performed upon them in Cambodia, so the country of origin of the Planter Caddy, model number 1807149, remains that of its principal components, China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9403.20.0050, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, 9903.88.03, in addition to subheading 9403.20.0050, HTSUS, listed above. The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at https://hts.usitc.gov/current.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is 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. If the facts are modified in any way, or if the goods do not conform to these facts at the 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 Title 19 of the Code of Federal 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 Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division