Imported Counterweights for Excavators are Except from Section 301 Duties, Argues Norca at Trade Court
Excavators are not backhoes or similar construction equipment and counterweights designed specifically for excavators are not subject to Section 301 steel tariffs, Norca argued in a Nov. 3 motion for summary judgment at the Court of International Trade (Norca Engineered Products v. United States, CIT #21-00305).
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The dispute concerns the correct 10-digit statistical classification for counterweights used on construction vehicles. Norca says its imported counterweights are properly classified under the statistical reporting number 8431.49.9095, a residual category for parts of certain machinery, while the government asserts the items are properly classified under subheading 8431.49.9044 as parts of backhoes, shovels, clamshells and draglines. Both numbers are duty-free, but Norca's preferred classification would exclude the counterweights from Section 301 tariffs by adding 9903.88.14 as a secondary subheading, which excluded from the List 1 tariffs certain articles of China, including “counterweight castings of iron or steel designed for use on excavators and wheel loaders... ."
CBP liquidated the entries in December 2019 under subheadings 8431.49.9044 and 9903.88.01, which rendered them subject to additional 25% duties under Section 301. Norca then protested CBP’s classifications and liquidation and filed another 15 protests over the following year. CBP denied the protests in January 2021, citing a CBP headquarters classification ruling from 2020 (HQ H308870).
The counterweights imported by Norca are installed on different models of the Doosan Bobcat mini or compact excavators, which fall under heading 8429. Norca says there is "no dispute" that the counterweights are properly classified under subheading 8431.49.90, which covers “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430... ." The dispute is merely at the 10-digit level. CBP's preferred classification is limited to parts for “backhoes, shovels, clamshells and draglines,” and does not include “excavators,” even though Norca argues the parts are specifically made for one model of excavator. Norca says that according to common parlance and typical commercial meaning, the term “backhoe” as used in statistical reporting number 8431.49.9044, does not include “mini excavators,” contrary to CBP's protest denials.