CLA-2-13:OT:RR:NC:N5:231
Alfredo Arenas
Polymerals Inc.
84 NE Loop 410
Suite No. 252
San Antonio, TX 78216
RE: The tariff classification, country of origin, and eligibility under the United States-Mexico-Canada
Agreement (USMCA) for HydroSystem 102P
Dear Mr. Arenas:
In your letter dated August 25, 2025, you requested a ruling on the tariff classification, country of origin, and
eligibility under the USMCA of HydroSystem 102P.
The product is described as a white to beige, free-flowing powder with a neutral taste and odor, marketed as a
synergistic hydrocolloid system that provides high viscosity, thickening, and stabilizing properties.
HydroSystem 102P is composed of 80 percent guar gum and 20 percent xanthan gum. The guar gum is
produced in Mexico, while the xanthan gum is sourced from China. The product will be imported into
50-pound kraft paper bags and is intended for use as a versatile thickener and stabilizer in soups, sauces,
dressings, baked goods, and dairy products.
Classification
The merchandise under review is a composite good comprised of different materials that are classifiable in
different headings. Classification of merchandise under the Harmonized Tariff Schedule of the United States
(HTSUS) is in accordance with the General Rules of Interpretation (GRIs) taken in order. GRI 3(b) provides,
in relevant part, that composite goods which cannot be classified by reference to GRI 3(a) shall be classified
as if they consisted of the material or component that gives them their essential character. Guar gum
predominates by weight and by function, providing the primary thickening and stabilizing properties of the
blend. Guar gum is specifically named in subheading 1302.32, HTSUS, which provides for mucilages and
thickeners, whether or not modified, derived from locust beans, locust bean seeds or guar seeds. Xanthan
gum, which if imported separately would fall under heading 3913, HTSUS, does not overcome the essential
character of the mixture.
The applicable subheading for the HydroSystem 102P will be 1302.32.0020, HTSUS, which provides for
Mucilages and thickeners, whether or not modified, derived from locust beans, locust bean seeds or guar
seeds: Guar. The general rate of duty will be Free.
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 1302.32.0020, 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 of China, Hong
Kong, and Macau will be subject to an additional ad valorem rate of duty of 10 percent. 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 1302.32.0020, 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, 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.
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/.
Country of Origin
When determining the country of origin, the substantial transformation analysis is applicable. See, e.g.,
Headquarters Ruling Letter (“HQ”) 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).
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. Applied in sequential order, the required hierarchy establishes that: (a) 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 section 102.20 and satisfies any other applicable requirements of that section, and all other
requirements of these rules are satisfied.
The subject merchandise is neither “wholly obtained or produced” nor “produced exclusively from domestic
materials.” Therefore, Sections 102.11(a)(1) and (a)(2) do not apply to the facts presented in this case.
Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin
determination, we look to section 102.11(a)(3).
The subject merchandise is classified under subheading 1302.32.0020, HTSUS, The applicable tariff shift
requirement in Part 102.20 for the subject merchandise of subheading 1302.32, HTSUS, states:
A change to subheadings 1302.11 through 1302.32 from any other chapter, except from concentrates of
poppy straw of subheading 2939.11.
In this case, the non-originating xanthan gum of Chinese origin is classifiable in heading 3913 prior to
processing. When combined with the Mexican guar gum, the finished product is classified in heading
1302.32. Because the xanthan gum undergoes a tariff shift from Chapter 39 to heading 1302.32, the rule of
origin is satisfied. The exception noted in the rule is not implicated.
Therefore, under the tariff shift provisions, the country of origin of HydroSystem 102P is Mexico. On this
basis, the product qualifies as an originating good under the United States-Mexico-Canada Agreement
(USMCA), provided that all other applicable requirements are met.
USMCA
The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30,
2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the
USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note ("GN")
11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is
an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the
territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff
treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule
as a "good originating in the territory of a USMCA country" only if-
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from
originating materials;
(iii) the good is a good produced entirely in the territory of one or more USMCA countries using
non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the
provisions of subdivision (o)); or
Since the HydroSystem 102P contains a non-originating ingredient, the product is not considered a good
wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor is the product produced
exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the product
qualifies under GN 11(b)(iii).
As previously noted, the product is classified under subheading 1302.32.0020, HTSUS. The applicable rule
of origin for goods classified under subheading 1302.32.0020, HTSUS, is in GN 11(o)/13.3, HTSUS, which
provides: “A change to subheadings 1302.11 through 1302.32 from any other chapter, except from
concentrates of poppy straw of subheading 2939.11.”
In this case, the HydroSystem 102P contains a non-originating ingredient that must undergo the tariff shift:
xanthan gum (China). Since the non-originating ingredient in the product is classified in a Chapter other than
Chapter 13, HTSUS, the tariff shift rule is met. Therefore, the HydroSystem 102P is eligible good for
preferential tariff treatment under the USMCA.
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 merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information
on the Bioterrorism Act can be obtained by calling FDA at 301-575-0156, or at the Web site
www.fda.gov/oc/bioterrorism/bioact.html.
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 Ekeng Manczuk at [email protected].
Sincerely,
(for)
Denise Faingar
Designated Official Performing the Duties of the Division Director
National Commodity Specialist Division