CLA-2-84:OT:RR:NC:N1:164
Fay Jin
Great Star Industrial USA, LLC
9836 Northcross Center Court, Suite A
Huntersville, NC 28078
RE: The tariff classification and country of origin of a tool set, and the country of origin of a separately
imported ratchet handle and a separately imported extension bit holder
Dear Fay Jin:
In your letter dated October 21, 2025, you requested a tariff classification and country of origin ruling
regarding a tool set, and a country of origin ruling regarding a ratchet handle and an extension bit holder.
Product information was submitted with your request.
The tool set under consideration is described as a 40-piece tool set designed for use in automotive,
mechanical, home repair, and construction projects to apply a certain amount of torque to fasteners such as
nuts and bolts to ensure they are tightened to specification. The submitted material displays the ratchet handle
set up in various configurations to accommodate a user’s spatial constraints and torque transmission needs.
All configurations feature the ratchet handle as a hub to hold the extension bars and bits vertically and
horizontally during use. In your submission, you state that the components are packed in China ready for
retail sale after importation into the United States. The tool set consists of the following items in two
sourcing scenarios:
Scenario 1
1 - Ratchet handle (Vietnam)
3 - Extension bit holders (Vietnam)
28 - Short bits (China)
8 - Long bits (China)
Scenario 2
1 - Ratchet handle (Vietnam)
3 - Extension bit holders (China)
28 - Short bits (China)
8 - Long bits (China)
The ratchet handle under consideration is designed to transmit torque while limiting motion in one direction.
This quality eliminates the need to repeatedly remove the handle from the fastener during use. Based on the
submitted information, the ratchet mechanism is seated in a central housing with two arms extending
laterally. Both the ratchet mechanism and lateral arms feature female hexagonal mating surfaces to securely
connect to the male hexagonal ends of other items such as detachable extension bars and bits. The ratchet
handle measures 2.56 inches in length by .945 inches in width by .634 inches in height and weighs 1.01
ounces.
The ratchet handle manufacturing process begins in Vietnam where globally sourced aluminum is die-cast to
the final size and shape of the finished ratchet handle. It is then shipped to China where it undergoes
machining such as milling and turning operations to achieve precise dimensions and surface quality. After
that, the handle undergoes oxidation coating to enhance corrosion resistance and aesthetic quality. Finally,
the ratchet handle is assembled with several Chinese-origin components including a drive tang, a magnet, a
shifting tooth, a selector knob, a retaining ring, a steel ball, a spring, a cover plate, a wire retaining ring, and a
screw.
The extension bit holder under consideration consists of a bit holder on one end and a hexagonal (hex) rod on
the other. The bit holder is made of aluminum alloy, and the hex rod is made of carbon steel. The two ends
facilitate connection to and between other items such as ratchet handles and bits.
Manufacturing of the extension bit holder begins in Vietnam where aluminum is extruded to form the interior
hexagonal shape and cut to the size of the finished bit holder. At that point, it is shipped to China where it
undergoes machining such as chamfering to enhance the alignment and connection to bits. After machining,
the bit holder undergoes oxidation coating to enhance corrosion resistance and aesthetic quality. Finally, the
bit holder is assembled with Chinese-origin components such as a hex rod, a sleeve, and a magnet.
Classification
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in
accordance with the General Rules of Interpretation (GRIs). GRI 1, HTSUS, states in part that for legal
purposes, classification shall be determined according to the terms of the headings, any relative section or
chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. Goods that are,
prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3.
The instant tool sets consist of at least two different articles that are, prima facie, classifiable in different
headings. They consist of articles put up together to carry out a specific activity (i.e., automotive, mechanical,
home repair, and construction). Finally, the articles are put up in a manner suitable for sale directly to users
without repacking. Therefore, the set in question is within the term “goods put up in sets for retail sale.” GRI
3(b) states in part that goods put up in sets for retail sale, which cannot be classified by reference to GRI 3(a),
are to be classified as if they consisted of the component which gives them their essential character.
Here, the ratchet handle is the central attachment point and mechanism for the extension bit holders and bits.
Without the ratchet handle to provide ratcheting and torque transmission, the practical usefulness of the
extension bit holders and bits is significantly hampered because the ability to deliver torque to fasteners is
substantially harmed. Since the overall functionality of the set is largely dependent on the mechanical
capabilities and unique physical features of the ratchet handle, it is the component which gives the tool set its
essential character. As a result, the tool set will be classified based on the ratchet handles.
The applicable subheading for the 40-piece tool set will be 8466.10.0175, HTSUS, which provides for “Parts
and accessories suitable for use principally with the machines of headings 8456 to 8465, including work or
tool holders, self-opening dieheads, dividing heads and other special attachments for the machines; tool
holders for any type of tool for working in the hand: Tool holders and self-opening dieheads: Other.” The
general rate of duty will be 3.9 percent ad valorem.
Country of Origin
When determining the country of origin, 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).
According to the CBP website under Section 301 Trade Remedies Frequently Asked Questions, “When
importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that
contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set
(i.e., the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy,
then the entire set will be subject to the additional duties. If the HTSUS provision under which the entire set
is classified is not covered by the Section 301 remedies, but the set contains components that are classified in
a subheading covered by the 301 list, the 301 duties will not be assessed on the individual components.”
In the tool set sourcing scenarios, the ratchet handle of Vietnamese origin imparts the essential character per
GRI 3 and thus controls the classification and country of origin of each set. Accordingly, the country of
origin of the tool set in both scenarios is Vietnam.
Regarding the separately imported ratchet handle, your submission states that the handle is die-cast to the
size and shape of the finished ratchet handle in Vietnam. In China, the die-cast aluminum ratchet handle
undergoes machining, surface treatment, and assembly with Chinese-origin components to complete the
ratchet mechanism. Based on the information provided, the die-cast ratchet handle manufactured in Vietnam
is exported to China with a pre-determined end use as a type of ratchet handle. In totality, the processing and
assembly operations in China do not substantially transform the forging from Vietnam. No article emerges
from the operations in China with a new name, character, or use. Accordingly, the country of origin of the
ratchet handle will be Vietnam.
Regarding the separately imported extension bit holder, you state that aluminum is extruded to its internal
hexagonal shape and cut to its final size in Vietnam. After that, the extension bit holder extrusion is sent to
China for machining, surface treatment, and assembly with other Chinese-origin components such as a steel
hex rod, a polypropylene sleeve, and a steel magnet. As you described, the extension bit holder which is
extruded to shape and cut to size in Vietnam is exported to China with a pre-determined end use as a type of
bit holder. Functionally, it is capable of holding a hex-shaped bit which is the product’s primary purpose. The
addition of the steel hex rod in China does not transform the bit holder but enhances its use by enabling
connection to a torque-transmitting tool such as a ratchet handle. In total, the processing and assembly
operations in China do not substantially transform the bit holder extrusion from Vietnam. No article emerges
from the operations in China with a new name, character, or use. Consequently, the country of origin of the
extension bit holder will be Vietnam.
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 Vietnam will be
subject to an additional ad valorem rate of duty of 20 percent. At the time of entry, you must report the
Chapter 99 heading applicable to your product classification, i.e. 9903.02.69, in addition to subheading
8466.10.0175, 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
(C.F.R.), 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 C.F.R. 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 Paul Taylor at [email protected].
Sincerely,
(for)
Evan Conceicao
Designated Official Performing the Duties of the Division Director
National Commodity Specialist Division