OT:RR:NC:N1:102
Mark Neville Jr
International Trade Counsellors
2153 Clementine Street
Naples, FL 34120
Dear Mr. Neville:
In your letter dated March 12, 2026, you requested a tariff classification and country of origin ruling for the
purpose of marking on behalf of your client, Transtex LLC. You also inquire whether the unit is eligible for
duty free treatment under the United States-Mexico-Canada Agreement (USMCA).
The product at issue is referred to as a DClimate Truck AC Unit, part number 910016-01- HC7000U Espar
RH. The unit is designed to be installed in heavy trucks for the purpose of changing temperature and
humidity levels within the cabin of the truck. The unit primarily consists of a housing that features a top
cover, base and an evaporator coil, a compressor, a compressor driver, a converter assembly and a condenser
shroud assembly with a blower. The unit is imported packaged with a duct kit and a heater.
The applicable subheading for the product will be 8415.20.0000, 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: Of a kind used for persons, in motor vehicles. The general rate of duty is
1.4 percent ad valorem.
You explain the unit is assembled in Canada using components sourced from China. The final assembly
begins by connecting suction and liquid tubes from China to the base frame, which features a Chinese
sourced evaporator coil. Afterwards, an H block is installed, and a fan is fastened onto a mounting plate.
Fittings for the compressor are then installed, and the tubes undergo a brazing process, followed by the
mounting of a compressor assembly of Chinese origin. The process continues by connecting the refrigerant
lines and bolting the vibration mounts in place. Amongst these steps, a condenser shroud assembly from
China is installed into the housing and temperature sensors are installed. The respective wire connections are
then completed, and the harnesses for the heater and condenser are installed and secured with clips.
Afterwards, a converter sub-assembly is assembled and mounted to the unit. The input/output connectors are
then installed and a microcontroller board from the United States is seated and locked in place, followed by
the installation of a main electrical harness. Subsequently, the appropriate electrical connections are
completed, and the fuse door is installed. Finally, the top cover is riveted onto the housing, and the unit
undergoes inspections and tests. Once finished, the unit is packaged with a duct kit from China and a heater
from Poland.
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));
As mentioned above, the final assembly of the air conditioning unit occurs in Canada using components from
China. Since the subject unit contains non-originating materials, they are 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). We must therefore consider whether the
merchandise qualifies as originating pursuant to GN 11(b)(iii). As noted above, the merchandise is classified
in subheading 8415.20, HTSUS. The applicable product-specific rule of origin in GN 11(o)/8415.20 is
underscored and requires:
50. (A) A change to subheadings 8415.20 through 8415.83 from any subheading outside that group, except
from “split-systems” of subheading 8415.10, tariff item 8415.90.40 or assemblies incorporating more than
one of the following: compressor, condenser, evaporator, connecting tubing;
The applicable subheading rule provides that “the underscoring of the designations in subdivision 50 pertain
to goods provided for in subheadings 8415.20 through 8415.83 for use in a motor vehicle of chapter 87.”
Furthermore, Chapter rule 7 for goods of Chapter 84 provides that “for the purposes of the subdivisions
pertaining to this chapter, whenever the subdivision designation is underscored, the provisions of subdivision
(k) of this note may apply to goods for use in a motor vehicle of chapter 87.”
In recognizing the product-specific rule is underscored, and the merchandise is for use in a motor vehicle of
chapter 87 (namely, a heavy-truck), the provisions of subdivision (k) may apply. GN 11(k)(ii)(E)(2) includes
in the definition of an “automotive good” any “part, component or material listed in table A.1, A.2, B, C, D,
or E of the automotive appendix, subject to any provisions that may be included in regulations issued by the
Secretary of the Treasury.” GN 11(k)(ii)(D) defines the “automotive appendix” as “. . . the Appendix to
Annex 4-B of the USMCA (relating to the product-specific rules of origin for automotive goods, as reflected
in subdivision (o) of this note).”
Examining Table D of the automotive appendix, titled “Principal Parts for Heavy Trucks,” the subject
merchandise is listed (8415.20 Air conditioning machines, comprising a motor-driven fan and elements for
changing the temperature and humidity, including those machines in which humidity cannot be separately
regulated, of a kind used for persons, in motor vehicles) and is for use in heavy trucks. The Note to Table D
in the automotive appendix provides that “the Regional Value Content requirements set out in Article 4 of
this Appendix apply to a good for use in a heavy truck.” Notwithstanding the Product-Specific Rules of
Origin in Annex 4-B, each Party shall provide that the regional value content requirement for a part listed in
Table D of this Appendix that is for use in a heavy truck is:
(K) Notwithstanding any other provision of this note, the regional value content requirement for a part listed
in Table D of the automotive appendix that is for use in a heavy truck is:
(1) 60 percent under the net cost method or 70 percent under the transaction value method, if the
corresponding rule in subdivision (o) of this note includes a transaction value method, beginning on July 1,
2020;
(2) 64 percent under the net cost method or 74 percent under the transaction value method, if the
corresponding rule in subdivision (o) of this note includes a transaction value method, beginning on July 1,
2024; and
(3) 70 percent under the net cost method or 80 percent under the transaction value method, if the
corresponding rule in subdivision (o) of this note includes a transaction value method, beginning on July 1,
2027, and thereafter
Article 4.3 of the automotive appendix correlates to GN 11(k)(iii)(K), and repeats the regional value content
requirements for goods listed in Table D.
In addition to the provisions of the automotive appendix and GN 11, as indicated in GN 11(a)(i), the
trilaterally agreed USMCA Uniform Regulations in Appendix A of 19 CFR, Section 182 provides further
guidance on the interpretation and application of the USMCA rules of origin. The Note to Table D in the
Uniform Regulations clarifies that:
The Regional Value Content requirements set out in Sections 13 or 15 or Schedule I (PSRO Annex) apply to
a good for use as original equipment in the production of a heavy truck. For an aftermarket part, the
applicable product-specific rule of origin set out in Section 13 or Schedule I (PSRO Annex) is the alternative
that includes the phrase “for any other good.”
Accordingly, the Uniform Regulations draw a distinction between aftermarket parts and automotive parts that
are used as original equipment in the production of a vehicle. See Section 12(1), which states that the term
aftermarket part means a good that is not for use as original equipment in the production of passenger
vehicles, light trucks or heavy trucks as defined in these Regulations. Here, the air conditioning unit will only
be used as an aftermarket part.
In accordance with the Note to Table D, when the merchandise is used as aftermarket parts, the applicable
product-specific rule of origin is the rule in Section 13 or Schedule I (PSRO Annex) of the Uniform
Regulations. Schedule I provides that “this schedule is deemed to be the contents of Sections A, B and C of
Annex 4-B of the Agreement, as implemented in General Note 11 of the HTSUS.” Here, Section 13 of the
Uniform Regulations does not contain a product-specific rule of origin for goods of 8415.20, HTSUS.
Therefore, the rule applicable to the merchandise when used as aftermarket parts is contained in GN 11(o)/84
15, rule (A) requires a change to subheadings 8415.20 through 8415.83 from any subheading outside that
group.
You have provided information necessary to determine whether the tariff shift rule in GN 11(o)/8415.20,
Rule A, has been satisfied. As noted above, this rule requires a change to subheadings 8415.20 through
8415.83 from any subheading outside that group. Based on the information provided, the non-originating
materials are classified in a subheading outside that group. As a result, provided that all other requirements
are met, the air conditioning unit will be eligible for preferential tariff treatment under the USMCA when
used as aftermarket parts.
Additionally, 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. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the U.S. Customs and Border Protection 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.
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. See 19 C.F.R. § 102.11.
Applied in sequential order, 19 CFR Part 102.11(a) provides that 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 Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable
requirements of these rules are satisfied.
The air conditioning unit is neither “wholly obtained or produced” nor “produced exclusively from domestic
materials.” Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of this
product and paragraph (a)(3) must be applied next to determine the origin of the finished article. As we
established, the air conditioning unit is classified under subheading 8415.20, HTSUS. The tariff shift
requirement in Part 102.20 for subheading 8415.20 states:
A change to subheading 8415.10 through 8415.83 from any subheading, including another subheading within
that group, except a change within that group resulting from a simple assembly.
The identified foreign components used in the production of the air conditioning unit are all classified outside
of the subheading within the group. As a result, the country of origin of the air conditioning unit for the
purpose of marking will be Canada.
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 P. Forkan
Director
National Commodity Specialist Division