Lipstick Packaged in China Doesn't Undergo Substantial Transformation, Not Subject to Section 301 Duties

Lipstick packaged in China from U.S. origin lipstick mass is not subject to Section 301 tariffs because its country of origin remains the U.S., CBP said in a Nov. 2 ruling. The lipstick, which is shipped from the U.S. to China before being poured into Chinese-made lipstick tubes and caps, does not undergo a substantial transformation that causes its country of origin to be China for the purposes of the additional duties, CBP said in NY 301371.

“The processing described (melting and pouring into tubes) does not [e]ffect any significant change in the character or use of the lipstick mass for purposes of establishing country of origin,” CBP said. “Therefore, it is our determination that the foreign processes do not constitute a substantial transformation and the lipstick remains a product of the country of manufacture of the lipstick mass (USA).”

Markwins Beauty Brands had also requested the ruling to determine if any country of origin marking requirements apply. Under CBP’s marking regulations in 19 CFR Part 134, because the lipstick’s country of origin is the U.S. and it is imported in a non-reusable disposable container, the lipstick in tubes “is exempt from marking,” CBP said.

Similarly, for U.S.-origin goods, Section 301 duties don’t apply, CBP said. “The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export,” the agency said. “Therefore based on the lipstick mass being only melted and packaged for retail sale in tubes, the subject merchandise will not be subject to those additional duties upon importation into the United States.”