Applicability of 301 Tariffs on Electric Vehicle Motors Depends on Origin of 'Most Essential Components'

The origin of electric vehicle motors and the applicability of Section 301 tariffs depends on where the two most important components of the engine are made, said CBP in a recently released ruling. In response to a country of origin ruling request from LG Electronics, CBP considered multiple manufacturing scenarios for the motors.

CBP's general position is “that the country of origin of an electric motor will be determined by where the two most essential components of an electric motor, the rotor and the stator, are made,” the agency said. “Furthermore, in turn, the country of origin of the stator and rotor will often be based upon the country where the cores of these components are made.”

Under the scenarios provided by LG, “various components are imported into either China, Mexico, or Korea, depending on the scenario, where they will be assembled into the stator-rotor assemblies for use in the production of an electric motor,” it said. Those components have a “pre-determined end-use and do not undergo a change in their use due to the assembly process to make them into the stator-rotor assemblies,” the agency said. Of all the components, “the most essential components of the stator-rotor assemblies will still be the stator cores and the rotor cores,” it said.

Although, “the assembly may involve more than merely inserting and attaching parts together,” that doesn't constitute a substantial transformation, it said. “Consequently, the country of origin of the stators-rotor assemblies for use in the electric motors will be determined by where the stator cores and the rotor cores are produced,” CBP said. That means that when the “rotor core and stator core are of Chinese origin,” the Section 301 tariffs would apply, the agency said.