CBP Finds Chinese Components of Car Seat Frames Substantially Transformed in Mexico

Car seat frames assembled in Mexico that include various Chinese-origin components aren't subject to Section 301 duties because the components are substantially transformed in Mexico, CBP said in a recent ruling. The ruling came in response to a request from Page-Fura lawyer Jeremy Page, who presented four scenarios that use different countries of origin for the components. Each of the scenarios involves similar production processes.

Within the scenarios, either the left- and right-hand recliner subassemblies, the fully assembled recliner cores, the side brackets, or the lower and upper cross members would be of Chinese origin. All other parts in each of the scenarios are from Mexico, CBP said. The agency then examined scenarios to determine whether a substantial transformation occurred within Mexico.

The assembly in Mexico did transform the Chinese parts, CBP said. “In all scenarios currently under consideration, while the assembly of the various components of foreign origin are not altered in their shape, the Chinese origin components alone are insufficient to create the automotive seat back frame and a majority of the components in each scenario are of Mexican origin,” the agency said. “When combined with the Mexican components, the Chinese components will lose their individual identities and become an integral part of automotive seat back frame. Therefore, we find that the relatively minor non-Mexican components will be substantially transformed by the processing in Mexico and the country of origin of the automotive seat back frame in all production scenarios will be Mexico for purposes of Section 301 remedies.”

CBP found the origin for marking purposes to also be Mexico. “We find that the operations performed in Mexico constitute more than 'minor processing' and exceed a 'simple assembly,'” CBP said. The marking origin “is the last country in which the goods underwent production,” it said. “The operations performed in Mexico constitute production. Accordingly, we find that the country of origin of the automotive seat back frames is Mexico for marking purposes.”