CLA-2-39:OT:RR:NC:N5: 137
William Powers
Epic Flooring, Inc.
8 The Green, Ste A
Dover, DE 19901
RE: The tariff classification, country of origin and status under the United States-Panama Trade Promotion
Agreement of vinyl flooring planks from Panama (US-PATPA)
Dear Mr. Powers:
In your letter dated July 2, 2025, you requested a tariff classification, country of origin and status under the
US-PATPA ruling.
The products under review are rigid vinyl flooring planks utilizing a click locking system for its installation.
The flooring planks are made using a core of stone polymer composite (SPC), which is a mixture of calcium
carbonate and polyvinyl chloride. A polyvinyl wear layer with a UV coating layer is layered over a polyvinyl
visual layer and adhered to the top side of the core. Attached to the underside is irradiated crosslinked
polyethylene (IXPE) closed foam acoustic padding. Finished rigid flooring planks are typically manufactured
in lengths of 48 inches and widths of 7 inches. Specialty rigid flooring planks can be in lengths of 72 inches
and widths of 9 inches.
The applicable subheading for the vinyl flooring tiles will be 3918.10.1020, Harmonized Tariff Schedule of
the United States (HTSUS), which provides for floor coverings or plastics, whether or not self-adhesive, in
rolls or in the form of tiles: of polymers of vinyl chloride: floor coverings: vinyl tile: vinyl tile consisting of a
rigid solid polymer core. The general rate of duty will be 5.3 percent ad valorem.
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). Substantial transformation determinations
are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007,
citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
Large stone plastic composite (SPC) sheets are manufactured in China, Vietnam or Malaysia. Polyvinyl
chloride, calcium carbonate powder and plasticizers are mixed together and compounded. The mixture is then
extruded into a continuous SPC layer. This layer will form the core. Next the core SPC sheet is laminated
with the PVC color layer and PVC wear layers. A hot press roller is used to emboss texture onto the surface.
This is followed by a UV coating that is sprayed over the embossed texture. The SPC sheet is cooled until
rigid and is then cut into rectangles of 39.5 inches x 49 inches.
The large SPC sheets are shipped to Panama for the next phase of manufacturing. The first step in the process
is the “cutting” process. The large sheets go through an automated cutting machine that divides it into planks
of specific width. The next step is “slotting” sometimes referred to as “profiling.” In this step the tiles go
through two slotting machines to create a patented “click-lock” mechanism on all four sides. The final
transformation step is the “padding.” In this step an acoustical backing padding made from irradiated
crosslinked polyethylene (IXPE) closed foam, sourced from China, Vietnam or Malaysia, will be bonded
through a series of hot gluing rollers to the bottom of the SPC layer. This step provides the resulting SPC
click flooring with required acoustic insulation properties. The tiles are then packed in groups of four to
twelve planks per box and the boxes are palletized for shipment to the United States.
We find that the processing performed in Panama with respect to cutting the planks, creating the “click-lock”
mechanism, and adding padding does constitute a substantial transformation of the imported components into
"products of" Panama. The manufacturing process in Panama transforms the non-originating components and
parts to produce the finished SPC flooring tiles. It creates a new and different article of commerce with a
distinct character and use that is not inherent in the components imported into Panama. Therefore, the
"product of" requirement has been satisfied. It is of the opinion of this office that the country of origin for the
SPC flooring will be Panama.
You also requested a ruling on the status of vinyl flooring tiles from Panama under the United States-Panama
Trade Promotion Agreement (US-PATPA).
General Note 35, HTSUS, sets forth the criteria for determining whether a good is originating under the
US-PATPA. General Note 35(b), HTSUS, states, in pertinent part, that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good
imported into the customs territory of the United States is eligible for treatment as an originating good under
the terms of this note if-
(i) the good is a good wholly obtained or produced entirely in the territory of Panama, the United
States, or both;
(ii) the good was produced entirely in the territory of Panama, the United States, or both, and-
(A) each of the non-originating materials used in the production of the good undergoes an
applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value content or other requirements
specified in such subdivision (o); and satisfies all other applicable requirements of this note
and of applicable regulations; or
(iii) the good was produced entirely in the territory of Panama or of the United States, or both,
exclusively from materials described in subdivision (i) or (ii), above
For goods classified in 3918, General Note 35(o) 39.2 requires:
A change to subheadings 3916.10 through 3918.90 from any other subheading.
The non-originating SPC sheets are classified in subheading 3920.43, HTSUS and the non-originating IXPE
padding is classified in subheading 3921.19, HTSUS. Therefore, the vinyl flooring tiles with SPC core
qualify for preferential tariff treatment under the United States-Panama Trade Promotion Agreement.
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,
including Panama, 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 3918.10.1020, HTSUS, listed above.
The tariffs and additional duties cited above are current as of this ruling’s issuance. 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 Christina Allen at [email protected].
Sincerely,
(for)
James Forkan
Acting Director
National Commodity Specialist Division