OT:RR:NC:N1:102
Yuyang Ren
Hisense USA Corporation
7310 McGinnis Ferry Road
Suwanee, GA 30024
RE: The country of origin of outdoor units
Dear Mr. Ren:
In your letter dated August 14, 2025, you requested a country of origin ruling on outdoor units. Descriptive
information was provided with your submission.
The products at issue are outdoor units, model numbers HD PRO, HD ULTRA, HD EDGE, and HI UNI. The
outdoor units consist of a chassis that encloses a compressor, a condenser, a motor, a fan, a printed circuit
board (PCB) and valves. Each unit is designed to be paired with a separately imported indoor unit to produce
a system that heats and cools spaces.
With respect to origin, the final assembly of each unit occurs in Thailand using components from China and
subassemblies produced in Thailand. For instance, the PCB subassembly is manufactured in Thailand using
components sourced from Japan, the Netherlands, the United States and Germany. The processes required to
produce this subassembly consist of insertion, surface mounting, coating, and soldering. Once the
aforementioned processes are complete, a chip is mounted to the circuit and control boards using machines
that dispense glue and complete surface mounting processes.
To form the fan subassembly, a fan hub and blades are produced using an injection molding process in
Thailand using globally sourced plastic pellets. Afterwards, bushings and bearings from China are joined to
the fan hub and blades using processes such as ultrasonic welding and heat treatments.
To form the condenser subassembly, aluminum foil is molded and stamped into the shape of the fin. Next,
copper tubes from China are cut and bent into U shapes. The U-shaped tubes are then inserted into the holes
of the fins and subjected to a pipe expansion process and then a drying process. Once dried, the U-shaped
tubes, along with connectors, joints, and plugs, are brazed onto a condenser from China. Finally, the
condenser is inflated with nitrogen and subsequently tested.
For the compressor subassembly, feet are pressed onto a compressor from China.
The metal panels, plates and brackets used with each unit are also formed in Thailand. The production of
these items begins by cutting coils of steel into appropriate sizes. The metal components then undergo
stripping or slicing processes to bring the cut pieces to the required shapes. Afterwards, the individual
components are subjected to various stamping, bending, spot welding, spraying, and painting processes.
During the final assembly of each unit, a condenser and a compressor subassembly are bolted onto the
bottom plate. Shut-off valves are then assembled into subassemblies and installed, which is followed by the
welding of a four-way valve subassembly to the air exhaust, the input pipes, and the outlet nozzle of the
condenser. Afterwards, a motor bracket is affixed in position, and the unit is filled with refrigerant. Then, a
separator plate and a reactor are installed, followed by the installation of various sensors. Next, an electric
box with a PCB subassembly is installed. Subsequently, a single fan subassembly is affixed to the motor, and
the electrical connections are completed. Finally, outer panels, along with a top plate, are installed. Once
complete, each unit is tested, inspected, labeled and packaged.
When determining the country of origin for purposes of applying current trade remedies under Section 301
and additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling
Letter H301619, dated November 6, 2018. 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, 681 F.2d 778
(C.C.P.A. 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).
Here, components from Thailand and China are assembled to each other and the chassis (plates and panels) in
Thailand to produce an outdoor unit. The steps that occur during the final assembly process are not complex,
as they consist of processes such as screwing, bolting and welding operations. Therefore, it is our view that
the Chinese components, which include components that directly contribute to the heating and cooling
processes, are not substantially transformed with a new name, character, or use. As such, the country of
origin of the outdoor units is China.
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)
Denise Faingar
Acting Director
National Commodity Specialist Division