Trade Court Upholds CBP's Classification of Steel Conduits, Defines Term 'Insulating'

CBP properly classified Shamrock Building Materials' steel conduit tubing imports from Mexico as steel tubing and not insulated fittings, the Court of International Trade ruled March 13. Judge Timothy Stanceu said the "uncontested facts" show the tubing is not insulated and is therefore subject to 25% Section 232 steel tariffs.

Shamrock’s conduits can’t “insulate the base metal, to any significant degree, from the electrical current or heat in the wire it surrounds," Stanceu said. The “facts demonstrate” that the imports are “not 'electrical conduit ... of base metal lined with an insulating material’” and therefore shouldn’t be classified under Harmonized Tariff Schedule heading 8547, the judge wrote.

CBP originally classified the goods under heading 7306, which covers "Other tubes, pipes, and hollow profiles ... of iron or steel," and comes without a general duty rate but a 25% Section 232 duty. Shamrock had argued the tubing should have been classified under heading 8547 as “electrical conduit tubing ... of base metal lined with insulating material," which would have subjected the imports to a 4.6% duty rate but exempted them from Section 232 duties under the trade deal with Mexico.

The company said the term "insulating" can be broadly applied, adding that the term only means that there's a protective layer between the item and something harmful. Shamrock’s conduits, which contain a layer of organic epoxy coating, would qualify as an insulating element under this definition, the company said.

But the U.S. said the term "insulating" must be interpreted in the context of electrical equipment, meaning it must block electrical current or isolate heat from the wire. Stanceu agreed, ruling that heading 8547 describes "electrical conduit that performs an insulating function necessary or desirable for electrical wiring in applications for which the conduit is designed and for which it is marketed in commerce."

The judge also ruled that Shamrock's motion to throw out the testimony of the government's expert witness, electrical engineer Dr. Athanasios Meliopoulos, was moot, but he agreed with the importer that the witness did not have the proper professional qualifications.

(Shamrock Building Materials v. United States, Slip Op. 23-32, CIT # 20-00074, dated 03/13/23, Judge Timothy Stanceu. Attorneys: Patrick Gill of Sandler Travis for plaintiff Shamrock Building Materials; R. Will Planert of Morris Manning for plaintiff Shamrock Building Materials; Marcella Powell for defendant U.S. government)