ITC Issues Preliminary Edition of 2017 HTS: Part 6 (Vehicles, Manufactured Articles, Nepal Preferences)

The International Trade Commission on Jan. 1 posted the Preliminary Edition of the 2017 Harmonized Tariff Schedule (here). The new HTS implements a wide range of changes to the World Customs Organization’s Harmonized System tariff nomenclature, which forms the basis for the HTS, that took effect at the beginning of 2017. This is the sixth and final part of International Trade Today's multipart summary, covering vehicles, precision instruments, manufactured articles and special tariff provisions under chapters 87-99. This part also includes a list of subheadings that were assigned the special program indicator (SPI) "NP" to denote eligibility for the Nepal Preference Program.

(NOTE: See the Change Record (here) for a full list of changes, including modifications to Schedule B numbers in the “Notice to Exporters” and changes that were already reflected in previous editions of the HTS. The effective date of all of the changes listed below is Jan. 1, 2017, unless otherwise noted. See 1701030032 for part one covering the general notes through Chapter 3, 1701040046 for part two covering changes to chapters 4-29, 1701050035 for part three covering changes to chapters 30-48, 1701060041 for part four covering changes to chapters 54 through 83, and 1701090021 for part five covering changes to chapters 84 and 85.)

Vehicle Classification Changes Include New Subheadings for Hybrids, Electrics

Changes to vehicle classification in Chapter 87 of the HTS include new subheadings added for hybrid and electric vehicles. Other modifications include a reshuffling of tariff provisions for tractors and passenger vehicles.

Tractors. Provisions for “other” tractors (i.e., other than single axle tractors, road tractors for semi-trailers and track-laying tractors) under former subheadings 8701.90.10 and 8701.90.50 are overhauled. Those two subheadings are deleted, and replaced by new subheadings divided based on engine power and further subdivided into statistical suffixes based on whether the tractor is suitable for agricultural use:

• 8701.91.10 and 8701.91.50 cover tractors with an engine power not exceeding 18 kW;
• 8701.92.10 and 8701.92.50 cover tractors with an engine power of 18-37 kW;
• 8701.93.10 and 8701.93.50 cover tractors with an engine power of 37-75 kW;
• 8701.94.10 and 8701.94.50 cover those with an engine power of 75-130 kW;
• 8701.91.10 and 8701.91.50 cover tractors with an engine power exceeding 130 kW.

For each pair of subheadings, the former (e.g., 8701.92.10) covers tractors suitable for agricultural use, and the latter (e.g., 8701.91.50) covers other tractors.

Subheading 8701.10.00, which previously covered “pedestrian controlled tractors,” is replaced by new subheading 8701.10.01,” which now covers “single axle tractors.”

Hybrid buses. New subheadings are added for hybrid and electric buses. New subheading 8702.20.31 covers hybrids with both electric and diesel engines for the transport of more than 16 people, and new subheading 8702.20.61 covers electric-diesel hybrids for the transport of 10-15 people. New subheading 8702.30.31 covers hybrids with both electric and spark-ignition engines for the transport of more than 16 people, and new subheading 8702.30.61 covers electric-spark ignition hybrids for the transport of 10-15 people. New subheading 8702.40.31 covers hybrids with only electric motors for the transport of more than 16 people, and new subheading 8702.40.61 covers vehicles with only electric motors for the transport of 10-15 people.

Subheadings 8702.10.30 and 8702.10.60 for buses with diesel engines are renumbered 8702.10.31 and 8702.10.61, and now cover vehicles for the transport of 10 or more people that have only a diesel engine. Subheadings 8702.90.30 and 8702.90.60 for other vehicles for the transport of 10 or more people are also renumbered as 8702.90.31 and 8702.90.61.

Gas-powered cars, vans and other vehicles. The scheme for classification of cars and other motor vehicles with spark-ignition engines larger than 1,500 cc is simplified, no longer dividing vehicles into statistical suffixes based on engine size. Subheadings 8703.23.00 for such vehicles with engines of 1,500 to 3,000 cc and 8703.24.00 for such vehicles with engines above 3,000 cc are renumbered 8703.23.01 and 8703.24.01, respectively. Nearly 30 statistical breakouts are removed.

Now, for vehicles with engines larger than 1,500 cc but not more than 3,000 cc under subheading 8703.23.01, motor homes are classifiable in subheading 8703.23.0110. New station wagons with engines of four cylinders or less are classifiable in subheading 8703.23.0120 if under 160 cm in height, and 8703.23.0130 if over 160 cm in height. Other new vehicles with four cylinders or less are in subheading 8703.23.0140. New vehicles with five or six cylinders are classifiable in 8703.23.0160, new vehicles with more than six cylinders are classifiable in 8703.23.0170, and used vehicles, other than motorhomes, with engines larger than 1,500 cc but not exceeding 3,000 cc are classifiable in 8703.23.0190.

For vehicles with engines larger than 3,000 cc under subheading 8703.24.01, ambulances, hearses and prison vans are classifiable in 8703.24.0110 and motor homes are classifiable in 8703.24.0130. New vehicles are in 8703.24.0140 if they have four cylinders or less, in 8703.24.0150 if they have five or six cylinders, and in 8703.24.0160 if they have more than six cylinders. Used vehicles with engines larger than 3,000 cc, other than ambulances, hearses and prison vans, are classifiable in subheading 8703.24.0190.

Subheadings 8703.21.00 and 8703.22.00, which cover cars and other motor vehicles for the transport of people (except golf carts and snow vehicles) with spark-ignition engines not exceeding 1,000 cc and from 1,000 to 1,500 cc, respectively, are renumbered as subheadings 8703.21.01 and 8703.22.01. They now cover vehicles with only spark-ignition engines (i.e., not hybrids).

Diesel cars, vans and other vehicles. Subheadings 8703.31.00, 8703.32.00 and 8703.33.00 for diesel engine vehicles are renumbered 8703.31.01, 8703.32.01 and 8703.33.01, and now cover vehicles with only diesel engines (i.e., not hybrids).

Hybrid and electric vehicles. New subheadings are added to heading 8703 covering hybrid and electric vehicles, as follows:

• 8703.40.00 -- Hybrid with spark-ignition reciprocating piston engine and electric motor, not capable of being charged by plugging into an external source of power.
• 8703.50.00 -- Hybrid with diesel engine and electric motor, not capable of being charged by plugging into an external source of power.
• 8703.60.00 -- Hybrid with other spark-ignition piston engine and electric motor, not capable of being charged by plugging into an external source of power.
• 8703.70.00 -- Hybrid with diesel engine and electric motor, capable of being charged.
• 8703.80.00 -- Vehicles with only electric motors.

All the subheadings are dutiable at 2.5%. Each subheading, except subheading 8703.80.00, is divided into statistical suffixes similar to those applicable to vehicles with the combustion engine only. Subheadings 8703.40.0005 and 8703.60.0005 cover gas-electric hybrids with engines not exceeding 1,000 cc; subheadings 8703.40.0010 and 8703.60.0010 cover gas-electric hybrids with engines 1,000 to 1,500 cc; subheadings 8703.40.0015 through 8703.40.0045 and 8703.60.0015 through 8703.60.0045 cover gas-electric hybrids with engines 1,500 to 3,000 cc. Subheadings 8703.40.0050 through 8703.40.0090 and 8703.60.0050 through 8703.40.0090 cover gas engine hybrids with engines larger than 3,000 cc.

For diesel engine hybrids, subheadings 8703.50.0010 and 8703.70.0010 cover hybrids with engines 1,500 cc or smaller; 8703.50.0030 and 8703.50.0050, as well as 8703.70.0030 and 8703.70.0050, cover diesel hybrids with engines of 1,500 cc to 2,500 cc. Subheadings 8703.50.0060 through 8703.50.0090, and 8703.70.0060 through 8703.70.0090, cover hybrids with diesel engines larger than 2,500 cc.

The residual provision in heading 8703 for vehicles designed for transport of persons, other than vehicles of heading 8702, is renumbered from 8703.90.00 to 8703.90.01.

Electric motorcycles and mopeds. New subheading 8711.60.00 is added for motorcycles, mopeds and cycles with auxiliary motors that have electric motors for propulsion. The residual subheading for motorcycles and similar vehicles is renumbered from 8711.90.00 to 8711.90.01.

Optical, Measurement and Scientific Instruments

The 2017 HTS includes changes to tariff provisions for precision instruments in Chapter 90, as follows:

Parts of binoculars and telescopes. The unit of quantity for subheading 9005.90.8001 for parts and accessories of binoculars, telescopes and other astronomical instruments, other than parts and accessories that incorporate goods of headings 9001 or 9002, is changed from “X” (quantity not required) to “No.” (number).

Cameras for preparing printing plates. Subheading 9006.10.00 for “cameras of a kind used for preparing printing plates or cylinders” is deleted, and new subheading 9006.59.20 is created to cover such articles.

Parts of surveying and scientific instruments. Subheading 9015.90.00 for parts and accessories of surveying, hydrographic, oceanographic, hydrological, meteorological or geophysical instruments of heading 9015 is renumbered 9015.90.01. Statistical suffixes under the subheading remain the same. For example, parts of seismographs formerly classifiable in subheading 9015.90.0050 are now classifiable in subheading 9015.90.0150.

Miscellaneous Manufactured Articles

Changes to Chapters 95 and 96 for manufactured articles include more detailed classification of bamboo and rattan furniture and a new subheading for bed bases. A new heading is also established in Chapter 96 for monopods, bipods and tripods.

Bamboo and rattan furniture. Seats of bamboo and rattan, formerly classified together in subheading 9504.51.00, are broken out into new subheadings 9504.52.00 for seats made of bamboo, and 9401.53.00 for seats made of rattan. Similarly, subheading 9403.81.00 for “other” furniture (i.e., other than seats of heading 9401 and medical and barbers’ furniture of 9402) made of bamboo and rattan, is divided into subheadings 9403.82.00 for other furniture of bamboo, and 9403.83.00 for other furniture of rattan, with each subheading retaining the same statistical suffixes. For example, bamboo cribs, formerly classifiable in subheading 9403.81.01 are now classifiable in 9403.82.01.

Bed bases. New statistical suffix 9403.20.0019 is created for metal “mechanically adjustable bed or mattress base[s], having the characteristics of a bed or bed frame, of a width exceeding 91.44 cm, of a length exceeding 184.15 cm, and of a depth exceeding 8.89 cm, whether or not motorized.” The residual category for other household metal furniture is renumbered from 9403.20.0018 to 9403.20.0021.

Prefabricated buildings. Provisions for classification of prefabricated buildings in heading 9406 are renumbered. Prefabricated buildings of wood are now classifiable in subheading 9406.10.00. Prefabricated buildings of other materials are now in subheading 9406.90.00, with statistical suffixes remaining the same as those in the now-eliminated 9406.00.80. For example prefabricated commercial greenhouses made of metal, formerly classifiable in subheading 9406.00.8010, are now classifiable in subheading 9406.90.0010.

Monopods, bipods and tripods. New heading 9620 is added for “monopods, bipods, tripods and similar articles.” The heading is broken out into subheadings based on principal use:

• 9620.00.10 -- For use with sound or video recording or reproducing apparatus of heading 8519 or 8521 (dutiable at 2%)
• 9620.00.15 -- For binoculars, monoculars, other optical telescopes, or “other astronomical instruments” of heading 9005 (rate applicable to article)
• 9620.00.20 -- For photographic cameras (other than cinematographic cameras) of heading 9006 (5.8%)
• 9620.00.25 -- For cinematographic cameras of heading 9006 (3.9%)
• 9620.00.30 -- For surveying hydrographic, oceanographic, hydrological, meteorological or geophysical instruments and appliances, excluding compasses, and rangefinders of heading 9015 (rate applicable to accessory)
• 9620.00.50 -- Other, of plastics (5.3%)
• 9620.00.55 -- Other, of wood (3.3%)
• 9620.00.60 -- Other, of graphite or other carbon (free)
• 9620.00.65 -- Other, of iron or steel (2.9%)
• 9620.00.70 -- Other, of aluminum (2.5%).

Subheading 9520.00.30 for monopods, bipods and tripods for instruments of heading 9015, is further subdivided into statistical suffixes for accessories of rangefinders (9620.00.3010), of theodolites and tachymeters (9620.00.3020), of levels (9620.00.3030), of photogrammetrical surveying instruments and apparatus (9620.00.3040), of seismographs (9620.00.3050), of other geophysical instruments and apparatus (9620.00.3060), and of other instruments of heading 9015 (9620.00.3090).

Notes are added or modified in chapters 39, 44, 68, 90, 92, 94 and 95, as well as Sections XV (chapters 72-83) and XVI (chapters 84 and 85), to say monopods, bipods and tripods are not to be classified in those chapters or sections of the HTS.

Special Classification Provisions

U.S. goods returned. Statistical breakouts are added to subheading 9801.00.80 for goods returned that would qualify for duty-free entry except if they were exported with the benefit of drawback or were subject to internal revenue tax. New HTS number 9801.00.8010 covers nonalcoholic beer of subheading 2202.91.00; 9801.00.8020 covers alcohol of headings 2203, 2204, 2205, 2206, 2207 and 2208; 9801.00.8030 covers tobacco and tobacco products of Chapter 24; 9810.00.8040 covers cigarette papers of heading 4813; subheading 9810.00.8090 covers other articles classifiable in 9810.00.80.

Other changes. The date 2025 replaces 2015 in several Chapter 98 provisions related to the African Growth and Opportunity Act to reflect the program’s renewal until 2025, and the Central African Republic is added to the AGOA subchapter notes. The text of several provisions of chapters 98 and 99 is modified to reflect renumbered subheadings elsewhere in the tariff schedule.

Nepal Preferences Program

Finally, the 2017 HTS implements the tariff preferences established for Nepal in the Trade Facilitation and Trade Enforcement Act of 2015. As noted in part one of this summary, provisions are added in the General Notes under HTS provisions for GSP in new General Note 4(e). Throughout the tariff schedule, new SPI “NP” is added to relevant subheadings in the special rate of duty column, effective Dec. 30, 2016, to indicate that these subheadings are duty-free when entered according to the program’s requirements. These subheadings are as follows: