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In a ruling issued on August 16, 2017, the Court of International Trade (CIT) effectively reduced the tariff on one make of vehicle from 25% (the rate that applied to pick-up trucks and similar vehicles) to 2.5% (the rate applied to cars). In its decision (Slip Opinion 17-102) in the case of Ford Motor Co. v. United States, the CIT agreed with Ford Motor Company that a vehicle called the Transit Connect is properly classifiable as a passenger vehicle. Some legal analysts see this case as an example of a practice known as “tariff engineering” (i.e., the structuring of products so as to achieve favorable duty treatment).
Ford developed both van and passenger models from a passenger vehicle that was being sold in Turkey. The passenger model was delivered to U.S. customers as imported, but Ford changed the van version after customs clearance by making certain modifications that (the firm contended) still qualify the product as a low-tariff passenger vehicles rather than a high-tariff cargo vehicle. Customs and Border Protection had ruled that the van version should be classified as cargo-carrying and hence subject to the 25% tariff, but the CIT sided with Ford for a number of reasons (e.g., a review of the structural and auxiliary features of the vehicle and the fact that many of the same features in the van version were also found in the passenger version).
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