CBP Finds Mexican Pump Assembled With Chinese Motor Subject to Section 301 Duties
A pump assembly assembled in Mexico is subject to Section 301 duties, even though the electric motor that powers the pump is the only Chinese component and all of the other parts are Mexican, CBP said in a recent ruling. The assembly process in Mexico does not result in a substantial transformation of the motor, so the pump assembly remains a product of China, CBP said in HQ H303864, issued Dec. 26 and posted to the agency's CROSS database Jan. 9.
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Johnson Electric North America requested the ruling on an electric pump for use in automotive windshield washer systems. The pump consists of a housing, a seal, a terminal connector housing, an impeller and an electric motor. The motor, which makes up about half the value of the pump, is imported from Mexico before an assembly process in Mexico that includes lubricating, aligning and pressing the motor and the other Mexican-origin components together.
In its ruling, CBP again relied on Court of International Trade precedent in a case involving Energizer flashlights (see 1612120038). According to CBP, the trade court in that case found the assembly process was not “sufficiently complex as to constitute a substantial transformation,” and that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.”
Here, CBP found the assembly process for the pump assembly “rather simple,” noting that “it only involves press fitting the parts into each other.” CBP also said “the electric motor is the most expensive and substantive part of the finished pump assembly. We find that it imparts the 'very essence' of the pump assembly, as it turns the impeller and moves the fluid through the pump,” the agency said. “For these reasons, we do not find that the electric motor is substantially transformed when it is assembled into the finished pump assembly in Mexico.”
“As the assembly of the Chinese motor into a pump assembly in Mexico does not result in a substantial transformation of the Chinese motor, the pump assembly remains a product of China,” CBP said. The pump assemblies, normally classified under subheading 8413.70.20 of the tariff schedule, should also be classified under subheading 9903.88.01 for List 1 of Section 301 tariffs from China, and subject to a 25 percent additional duty, it said.