In a recent opinion, the United States Court of Appeals for the Federal Circuit affirmed the US Court of International Trade’s (CIT) determination of the classification of certain hand tools imported by Irwin Industrial Tool Company (“Irwin”) as “pliers” over US Customs and Border Protection’s (“Customs”) classification of the tools as “wrenches.”
The tools at issue were variations of locking pliers, that is, two handled tools with two jaws that could grasp — and lock — on a variety of fasteners or other materials. Customs classified the tools as wrenches under subheading 8204.12.00 of the HTSUS (subject to a 9% duty). In defense of its classification, Customs relied on dictionary definitions of wrenches which described a “tool used to grasp an object and then turn or twist it.” In response, Irwin asserted that such a definition would sweep in tools such as crowbars which are clearly not wrenches but are used to turn and twist objects. Customs also asserted that a hallmark of pliers is the need to maintain continuous hand pressure to keep the tool engaged with an object and that “locking” tools, such as the tools at issue, permit the maximum application of torque, a key feature of a wrench.
The Federal Circuit was unpersuaded and affirmed the CIT’s classification of the tools as pliers under subheading 8203.20.6030 (subject to a 5.5% duty plus 12 cents per dozen) because the tools “1) are versatile hand tools, 2) have two handles, and 3) have two jaws, that are flat or serrated and are on a pivot, which can be squeezed together to enable the tools to grasp an object.” The Court referenced definitions from the America Standards for Mechanical Engineering (ASME) which shared the two handle-two jaw design hallmarks. The Federal Circuit noted that all pliers described in the ASME — including locking varieties — shared the two handle-two jaw design. The Federal Circuit contrasted the ASME definition of a wrench which consisted “essentially of a frame (fixed jaw and handle), a movable jaw, and a jaw opening adjustment mechanism.” The Court held these design hallmarks, not the use or potential use of the tools, supported the resulting classification of the tools at issue as pliers.
Tariff classifications can have a significant impact on a company’s bottom line; therefore, proper legal guidance through classification determination — and litigation, if necessary — are essential whenever dealing with imported products.