What is the dutiable value and rate on Swedish stoves returned after warranty repair in Canada?

Question

A shipment of portable gas stoves manufactured in Sweden are imported into the United States. The appraised value of each stove upon importation is $600.00. They are classified under 7321.11.1030 with a duty rate of 5.7 percent. The importer discovers that 15 of the stoves have a faulty gas valve. The stoves are exported to Canada for warranty repair. Upon reimportation from Canada, there is no charge to the importer, but the value of the repair is $120.00 each. The reimportation is under 9802.00.40 in the Harmonized Tariff Schedule of the United States. Which statement accurately reflects the dutiable value and duty rate upon reimportation?

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CBP answer key: Answer A · Chapter 98, Subchapter II, U.S. Note 3Source: CBP past exams ↗

Accepted Answer

A) The dutiable value is $1,800.00, and the duty rate is "Free" with a claim of "S" as the goods were repaired in Canada and the United States-Mexico-Canada Agreement applies to repairs of goods originating outside of the United States, Mexico, or Canada.