OT:RR:NC:N1:102
Kerry Wang
Braumiller Law Group PLLC
5220 Spring Valley Road, Suite 200
Dallas, TX 92691-5939
RE: The country of origin of indoor air conditioning units
Dear Ms. Wang:
In your letter dated March 30, 2026, you requested a country of origin ruling on behalf of your client,
Hisense USA Corp.
The products at issue are two indoor air conditioning units, item AUH-36UX3TDH3 and
AUH-36UX3RDH1. Both units consist of a rectangular shaped metal housing that contains a fan assembly,
an electrical box and an evaporator primarily constructed of copper or aluminum material. The final assembly
for both units occurs in Thailand and follows the same assembly sequence, as the units are configured
identically.
Before final assembly, various subassemblies are completed using components from China and Thailand. For
instance, raw copper tubing and aluminum for the copper evaporator are sourced from China and undergo
complete fabrication and assembly in Thailand. The fabrication process begins by stamping aluminum foil
into fins. Chinese-origin copper tubes are then cut, bent into U-shapes, and inserted through the stamped fins.
The resulting assembly is then placed into a tube-expansion machine, which mechanically expands the
copper tubes against the fins. After expansion, the evaporator is dried, degreased, and brazed. Subsequently,
short U-tubes and elbows are joined to the coil using brazing equipment. The completed coil then undergoes
testing, a final inspection, and packaging.
To produce the aluminum evaporator, two flat aluminum plates are mechanically fastened using support
plates and a top plate to form a V-coil structure. The inlet and outlet aluminum pipe assemblies, sourced from
China, are manually reshaped, reangled, and inserted into the coil’s flared openings to achieve the required
weld depth and positioning. Brazing is then completed, and the thermostatic expansion valve assembly is
subsequently positioned and welded to the inlet tubes. Next, the entire coil undergoes leak detection,
finishing and packaging.
The production process of the printed circuit board assembly (PCBA) begins by completing a solder paste
printing process. Afterwards, the components are placed onto circuit boards using surface-mount technology.
This step is followed by reflow soldering and the completion of an inspection. Additional components are
installed using plug-in operations, after which the assemblies undergo wave soldering. Each PCBA is
subjected to an inspection, any necessary rework and in-circuit testing. Completed PCBAs undergo
programming.
The sheet metal components, which consist of the framework and housing, are fabricated using Chinese and
Thai sourced galvanized steel coils and powder coatings. The process begins by loading raw steel coils into
cutting and stamping machinery to notch, punch and form the required panel geometries. The cut panels are
then bent to precise tolerances and spray coated.
For the fan assembly, the production starts by welding the side plates to other designated plates by applying
spot welds along the perimeter and then removing any burrs. Afterwards, the welded assemblies are cleaned
and painted. The impeller is then secured to the volute tongue plate using screws. Once complete, each
assembly undergoes an inspection.
The final assembly begins by affixing the backplates, middle and lower beams, the filter’s front (using a
mounting plate), air outlet parts, a sealing plate, and a retaining clip, all secured with screws. The sealing
plate on the water tray is then screwed to the evaporator, which is subsequently secured to the rear plate
assembly’s rails. A positioning fixture is placed between the fan and the volute, followed by a motor from
China. Bearings are installed, and a sponge from China is affixed. Once these steps are complete, the fan
assembly and guide rail are secured with screws. Required sensors are then mounted and secured. Wiring
connections are completed, and an electrical box is installed and secured with screws. Additional wiring
connections are then made, and the sealing plate and lower panel are screwed into position. This is followed
by the installation of a rubber stopper and the top plate. As each unit is completed, it undergoes testing, and is
labeled and packaged for shipment.
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).
In this instance, each indoor unit is assembled in Thailand from components that originate in China and
subassemblies from Thailand. However, the steps that occur during the final assembly process are rather
simple and therefore, we believe the origin of the indoor unit should be determined by its dominant
component, which is the component that contributes to the cooling cycle, i.e., the Thai evaporator. As such,
the country of origin of the subject indoor units is Thailand.
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