Recent Customs Ruling Shows the Complexity of Global Supply Chain

A recent Customs Binding Ruling relating to men’s trousers constructed from 65% polyester, 35% cotton, solid color woven twill fabric shows the complexity of the global supply chain and of the rules of free trade agreements. The trousers have a flat waistband with seven belt loops, a zippered fly front opening with a single button closure on the waistband, slant pockets in the front, two rear welt pockets, a button closure on the left welt pocket, and hemmed leg openings.

Customs ruled that the applicable subheading for Style 2670-005 will be 6203.43.4010, Harmonized Tariff Schedule of the United States ("HTSUS"), which provides for men’s or boys’… trousers, . . . and shorts (other than swimwear): of synthetic fibers: other: other: other: other: trousers: men’s. The rate of duty is 27.9% ad valorem.

The manufacturing operations took place in five different countries and were described as follows:

• The warp and filling yarns are manufactured in the United States.

• The yarns are woven into fabric in the United States. The 70% polyester, 30% cotton pocket lining fabric is manufactured in Pakistan.

• The polyester fusible interfacing is manufactured in the United States.

• The belt loop tape, left fly tape, waistband fusible, zipper chain brass, and the zipper slide brass are manufactured in the United States.

• The bottom stop brass is manufactured in Japan.

• The buttons are manufactured in China.

• The waistband ticket, size/wash care label and sewing thread are manufactured in the United States.

• The components are shipped to Mexico where the fabric is cut into component parts.

• The parts are sewn and assembled into finished trousers in Mexico.

• The trousers will be exported from Mexico directly to the United States.

A copy of the ruling, which sets for the reason the trousers qualify for duty-free entry under the rules of the North American Free Trade Agreement is available on the Agathon Associates website, to see it click here.