Company Challenges China Origin, Section 301 Tariffs on Industrial Diamonds in CIT Complaint
Industrial diamonds from China further processed into superabbrasives in Romania should not be subject to additional Section 301 tariffs as products of China, Lieber & Solow, which does business as Lands Superabrasives, said in a complaint filed May 27 at the Court of International Trade. The companies argue that the industrial diamond crystals from China became objects of a different character, identity and use after processing in Romania and should be Romanian products for tariff purposes. Lands asked the court to find Romania as the correct country of origin and order CBP to reliquidate the merchandise with refunds of excess duties and interest (Lieber & Solow Ltd. d/b/a Lands Superabrasives, Co. v. United States, CIT # 21-00623).
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According to the complaint, the superabrasives were classified under subheading 2850.00.5000, as “hydrides, nitrides, azides, silicides and borides...” at a duty rate of 3.7%, or under subheading 7105.10.0050, as “Dust and powder of ... precious or semi- precious stones," which is duty-free. CBP liquidated the merchandise as originating in China and added subheading 9903.88.03 for Section 301 tariffs at an additional rate of 25%. Lands protested the country of origin determination and additional classification in a March 2020 protest that CBP denied in July 2021.
Lands argued that Romanian company Supertek performed "a proprietary production process" on the diamonds that involves cleaning, milling, shaping, sedimentation, grading, sieving and magnetic separation as well as electrolytic plating or coating with metal in some cases to arrive at seven different product applications. After creation in China, the crystals "contained impurities at the atomic level within the crystalline form" that affected their heat conductivity and hardness, and the basic crystals used to create the superabrasives "could not be put to the same uses" because of additional processing in Romania, the complaint said. Lands said that the "extensive manufacturing operations" resulted in a new product of Romanian origin.