## Facts

- Cummins imported crankshafts for diesel engines into the United States and claimed NAFTA preferential duty treatment.
- Alloy steel forgings were produced in Brazil using closed-die forging; flash was trimmed and the forgings were coined while hot.
- The Brazilian forgings were treated by Customs as classifiable under HTSUS heading 7224 (semi-finished alloy steel).
- The forgings were shipped to Mexico, where machining, drilling, and finishing operations produced crankshafts suitable for installation in engines; finished crankshafts are classifiable under HTSUS subheading 8483.10.30.
- Cummins asserted the NAFTA rule of origin in General Note 12 was met because the processing in Mexico caused “a change to subheading 8483.10 from any other heading.”
- Customs issued an amended advance ruling denying NAFTA origin and assessed duties at the non-preferential rate (2.5%).
- In reaching its view, Customs consulted World Customs Organization materials supporting the position that the processing did not effect the required tariff-classification change.
- Cummins challenged the liquidations; the case proceeded in the Court of International Trade on cross-motions for summary judgment.

## Issues

1. Whether Mexican processing of Brazilian steel forgings into finished crankshafts satisfied the NAFTA tariff-shift rule requiring “a change to subheading 8483.10 from any other heading,” making the crankshafts NAFTA-originating.
2. Whether Customs’ interpretation and application of the NAFTA origin provisions and the tariff-shift requirement, including reliance on Harmonized System guidance, should be sustained on summary judgment.

## Decision

- The Court of International Trade granted summary judgment to the United States.
- The court sustained Customs’ denial of NAFTA preferential treatment and upheld assessment of the 2.5% duty.
- The court concluded the crankshafts did not “originate” in Mexico under General Note 12 because the required tariff shift was not established on the undisputed record.

## Legal Principles

- NAFTA preferential treatment under General Note 12 depends on satisfying the applicable rule of origin, including any specified change in tariff classification.
- A claimed tariff shift requires a legally correct classification analysis of the input and resulting article; a party cannot satisfy the rule by relying only on an asserted heading for the input.
- Where the record shows the intermediate product is already closely identified with the finished article, downstream machining and finishing may be insufficient to satisfy a tariff-shift origin rule.
- On summary judgment, if the material facts about the manufacturing steps are undisputed and the origin rule is not met as a matter of law, Customs’ liquidation must be sustained.

## Conclusion

The Court of International Trade held that Cummins’ crankshafts were not NAFTA-originating because the Mexican processing of Brazilian forgings did not satisfy the NAFTA tariff-shift requirement for subheading 8483.10, and it therefore upheld Customs’ denial of preferential treatment and the resulting duty assessment.


Cummins Inc. v. United States, 29 Ct. Int’l Trade 525 (2005)