Marking & Origin · asked by @BigBoss · 2026-08-24 · 1 reply
CBP could not pick one answer here either: October 2025, question 78
This one is from the October 2025 sitting. after appeals, the official key accepts 2 answers.
A cylindrical can assembly of subheading 8507.90, HTSUS, is produced in Mexico
The sole non-originating material is nickel-plated steel of 7212.50, HTSUS, from Korea
The production in Mexico results in a substantial transformation
The importer wants preferential tariff treatment under the USMCA
Which statement is TRUE?
A. No preference, because it contains a non-USMCA originating material.
B. Eligible, because it is substantially transformed in Mexico and is now a product of Mexico.
C. Not eligible, because it is not produced in the United States.
D. It meets the applicable USMCA rule of origin.
The key was B. The final key accepts B or D.
B gets to the right conclusion on the wrong doctrine. Substantial transformation is the NON-preferential origin test, the one that answers marking and country-of-origin questions. USMCA preference does not run on substantial transformatin. It runs on General Note 11, where the question is whether the Korean steel from heading 7212 makes the tariff shift that the product-specific rule for 8507.90 requires.
Does B deserve the credit? The conclusion is right and the reasoning is wrong, and this exam usually punishes that.
Replies
@BigBoss · 2026-09-01
Coming back to my own question with where I landed, in case it helps anyone else.
These are two different tests and the question is really asking whether you know which one applies.
Substantial transformation is the non-preferential rule of origin. It is what answers country of origin marking questions under 19 CFR Part 134, and it is the test you reach for when no trade agreement is in play.
USMCA preference does not run on it. Preferential origin runs on General Note 11, HTSUS. You start with the origin criteria in GN 11(b), and if the good contains non-originating material you go to the product specific rule in GN 11(o) and ask whether that material makes the tariff shift the rule requires. Here that means asking whether Korean steel of heading 7212 shifts into subheading 8507.90 the way the rule for 8507.90 demands. I am not going to quote that shift from memory, so look it up in GN 11(o) rather than taking my word for it.
So D is the only statement that names the governing test. B reaches the right conclusion through the wrong doctrine.
Does B deserve the credit? My read is that accepting both is CBP being generous to candidates rather than endorsing the reasoning. B is the answer you pick if you know substantial transformation and have not yet learned that preference is a separate system, which is exactly the gap this question was built to find.
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