OT:RR:NC:N1:102
Junyeong Park
Dream Customs Consulting Company
611-ho, 3-dong, Ace Hitech City Building
775, Gyeongin-ro, Yeongdeungpo-gu
Seoul, 07299
South Korea
RE: The classification and country of origin of a heat pump
Dear Mr. Park:
In your letter dated June 30, 2025, on behalf of your client, KD Navien, you requested a classification and
country of origin ruling for marking purposes.
The heat pump, model number GDHP820035DR1, is an outdoor unit. The outdoor unit consists of a chassis
that incorporates a compressor, a condenser, a motor and fan assembly, a four-way reversing valve, an
expansive valve assembly, a control panel and an accumulator. Once paired with an indoor unit, which is
imported separately, the system heats and cools spaces.
The applicable subheading for the heat pump will be 8415.90.8065, Harmonized Tariff Schedule of the
United States (HTSUS), which provides for Air conditioning machines, comprising a motor-driven fan and
elements for changing the temperature and humidity, including those machines in which the humidity cannot
be separately regulated; parts thereof: Parts: Other: Other: Of heat pumps. The general rate of duty is 1.4
percent ad valorem.
With respect to origin, the final assembly of the heat pump occurs in South Korea using components sourced
from China. The final assembly begins by installing rubber grommets onto the bottom of a compressor. The
compressor, along with an accumulator, is fastened to the base of the chassis. Afterwards, a crankshaft
heating tape is secured to the bottom section of the compressor, and the input wire is connected. Next, valve
assemblies are positioned and bolted in place, and the inlets and outlets of the compressor and the
accumulator are brazed. Subsequently, an expansion valve assembly is secured to a support plate using two
anti-vibration rubbers and cable ties. Then, the inlets and outlets of the hairpin pipes are connected to the
condenser and subsequently brazed. In the next step, the condenser is screwed to the base frame, brazing is
completed, and three corner panels, along with the side panel, are screwed onto the base. Wiring connections
are then completed, a plastic cover is secured in place, and auxiliary components, such as temperature
sensors, a sound jacket, solenoid valves, and insulation materials are installed. During the following steps, a
vacuum process occurs, and the unit is charged and sealed. Lastly, a fan assembly and a main control panel
are installed, a top cover is secured, and wire connections are affixed.
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. Friedlander & 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.
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 this instance, components sourced from China, including components that contribute to the change of
temperature process, are assembled to each other and the chassis in South Korea to produce a heat pump. The
steps that occur during the final assembly process are not complex, as they consist of processes such as
screwing, bolting and brazing, which is recognized as a welding operation used to join pipes to heat
exchangers. See Headquarters Ruling Letter 555377, dated October 16, 1989. Therefore, it is our view that
the Chinese components are not substantially transformed with a new name, character, or use. As such, the
country of origin of the heat pump, model number GDHP820035DR1, is China.
Effective March 4, 2025, pursuant to U.S. Note 2(u) to Subchapter III, Chapter 99, all products of China and
Hong Kong as provided by heading 9903.01.24, HTSUS, other than products classifiable under headings
9903.01.21, 9903.01.22, and 9903.01.23, HTSUS, will be subject to an additional 20 percent ad valorem rate
of duty. At the time of entry, you must report the applicable Chapter 99 heading, i.e., 9903.01.24, in addition
to subheading 8415.90.8065, HTSUS, listed above.
Effective April 5, 2025, Executive Orders implemented “Reciprocal Tariffs.” All imported merchandise must
be reported with either the Chapter 99 provision under which the reciprocal tariff applies or one of the
Chapter 99 provisions covering exceptions to the reciprocal tariffs. At this time products from all countries
will be subject to an additional 10 percent ad valorem rate of duty. At the time of entry, you must report the
Chapter 99 heading applicable to your product classification, i.e., 9903.01.25, in addition to subheading
8415.90.8065, HTSUS, listed above.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under
subheading 8415.90.8065, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad
valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15,
in addition to subheading 8415.90.8065, 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 are subject to change. The text of the most recent HTSUS
and the accompanying duty rates are provided at https://hts.usitc.gov/.
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 Sandra Martinez at [email protected].
Sincerely,
(for)
James Forkan
Acting Director
National Commodity Specialist Division