**Subject: Request to Exclude Flywheels from Section 301 Tariffs**

Gear-driven engine flywheels 

HTSUS: 8483506000

Dear Ambassador Lighthizer,

Thank you for the opportunity to request an exclusion for products of Chinese origin from the tariffs imposed under Section 301 of the Trade Act of 1974. Schaeffler Group USA, Inc. (“Schaeffler”) respectfully submits these comments in support of its requested exclusion for certain types of automotive gear-driven engine flywheels (“flywheels”). As a leading innovator in designing and manufacturing automotive components, Schaeffler sympathizes with the administration’s concerns relating to China’s acts, policies, and practices investigated by your office and more fully described in your report published on March 22, 2018. However, a 25% tariff on these flywheels would not address these concerns and objectives. 

These flywheels are made in China, but are not relevant to what we understand to be the target of the Section 301 tariffs—China’s acts, policies, and practices with respect to intellectual property and its “Made in China 2025” initiative. In fact, the importation of these assemblies into the United States benefits U.S. interests by supporting our customers, our operations, and our continued investment in providing high-quality jobs and innovation in creating efficient supply chains that are vital to the overall competitiveness of the U.S. automotive market.

I. **Introduction**

These flywheels are purchased on the automotive aftermarket by owners of used passenger cars and light trucks that are equipped with a manual transmission. The segmented nature of the automotive parts industry means that these aftermarket products must be sourced from trusted manufacturing facilities that are capable of supplying our modest volume requirements at affordable prices. 

II. **Description of the product**

These particular flywheels fall under the 10-digit HTSUS subheading 8483.50.6000, “flywheels and pulleys, including pulley blocks: other; flywheels.” This subheading is confirmed by a U.S. Customs and Border Protection Ruling N 270318, issued on November 23, 2015, which analyzed “the tariff classification of a flywheel assembly from the Republic of Korea.” Proposed tariff language for these products would be “flywheels used in manual automotive transmission and clutch assemblies.”

These flywheels all contain similar, unique characteristics that make them easily identifiable from other products under the same HTSUS subheading. 

All flywheels are flat, circular discs made of cast iron. They are grey and silver in color. The flywheel is one solid piece that has a “transmission side” and an “engine side.” Half of the flywheel’s circumference is serrated to fit into a gear. The other half of the flywheel’s circumference is smooth. A hole is in the center of the flywheel.

The “transmission side” of the flywheel contains a circular indentation in the center. The “engine side” of the flywheel contains a slightly raised center that juts above the disc with a raised lip. On either side, evenly-spaced holes surround the center hole.

The flywheels weigh between 5.1 Kg and 28.1 Kg. The flywheels have a diameter ranging from 177 millimeters to 340 millimeters. The flywheels have a thickness of between 16 millimeters and 98 millimeters. 

The information in Attachment A provides additional detail that would assist the U.S. Customs and Border Protection in identifying and administering the exclusion of these products. 

III. **The flywheels are not relevant to the “Made in China 2025” policy or China’s other industrial goals**

These flywheels are designed to be used in manual transmission vehicles for aftermarket repairs of used automobiles, which makes up less than 4% of the U.S. auto market. These flywheels are not used on vehicles with automatic transmissions. Because of their limited use and the universality of their design, these flywheels are not of any strategic consequence to China’s industrial growth or innovation strategies.

These flywheels are not related to "Made in China 2025" or other Chinese industrial programs. Based on our understanding - those programs are related to high-technology, robotics, aerospace, ocean engineering/shipping, railway, electric vehicle, utility/power transmission, medical devices, or agricultural machinery.

These flywheels are low-technology automotive components and are not relevant to any strategic program defined by the Chinese government. China has already mastered producing these flywheels at large scales, and has done so for years. These products are for manual-style transmission vehicles which are no longer in mass production. In fact, these products represent technology that is on the decline.

Because these flywheels are used in non-Chinese, older vehicles, their fabrication runs contrary to China’s industrial policy. The manufacture of these flywheels supports continued operation of old-vehicles which necessarily reduces demand for any new automotive technology designed and created in China. Hence, the production of these flywheels is antithetical to China’s industrial goals aimed at developing new vehicles.

Moreover, the design and production of these flywheels is not the result of any malign “acts, policies, or practices” related to intellectual property rights, forced technology transfer, or innovation in China. The products are simple to engineer and do not represent any high-tech or high value technology.

IV. **These flywheels cannot be sourced from anywhere but China**

The facilities required to manufacture these flywheels must be validated and be equipped with the correct tooling and machines. There is no third-country capable of meeting these testing and tooling needs with respect to the manufacture of flywheels. 

V. **Imposition of a 25% tariff would result in severe economic harm**

Schaeffler operates numerous facilities throughout the United States. 

In addition, high prices for repairs and repair parts would negatively impact the livelihood of down-stream jobs supported by auto parts. Installers, repair technicians, and shop owners alike would see a reduced usage of their services, threatening their livelihoods as well. 

These lost jobs would be felt in addition to the higher prices paid for by consumers as a result of decreased competition and increased prices. 

VI. **Annual values for Wheels Flywheels Gen1**

As required in the exclusion Request procedures, the chart below shows the figures of these flywheels as imported into the United States. 

This submission contains business confidential information (“BCI”) for which Schaeffler requests confidential treatment. Pursuant to the USTR’s published procedures for Exclusion Requests, Schaeffler has identified BCI in brackets and has appropriately stamped each page containing business confidential information. A public version of this Request is provided simultaneously with Schaeffler’s BCI version. Schaeffler certifies that disclosure of its BCI would endanger trade secrets or profitability, and that the information would not be customarily released to the public. The submitter further certifies that the information provided herein is complete and correct to the best of his knowledge.

We would be happy to work with the USTR to answer any questions or provide any additional information. Should you require anything, please do not hesitate to contact us.**Attachment 1: Identification of Product for Exclusion**

**Gear Driven Engine Flywheel**

HTSUS: 8483506000

These particular flywheels fall under the 10-digit HTSUS subheading 8483.50.6000, “flywheels and pulleys, including pulley blocks: other; flywheels.” This subheading is confirmed by a U.S. Customs and Border Protection Ruling N 270318, issued on November 23, 2015, which analyzed “the tariff classification of a flywheel assembly from the Republic of Korea.” Proposed tariff language for these products would be “flywheels used in manual automotive transmission and clutch assemblies.”

These flywheels all contain similar, unique characteristics that make them easily identifiable from other products under the same HTSUS subheading. 

All flywheels are flat, circular discs made of cast iron. They are grey and silver in color. The flywheel is one solid piece that has a “transmission side” and an “engine side.” Half of the flywheel’s circumference is serrated to fit into a gear. The other half of the flywheel’s circumference is smooth. A hole is in the center of the flywheel.

The “transmission side” of the flywheel contains a circular indentation in the center. The “engine side” of the flywheel contains a slightly raised center that juts above the disc with a raised lip. On either side, evenly-spaced holes surround the center hole.

The flywheels weigh between 5.1 Kg and 28.1 Kg. The flywheels have a diameter ranging from 177 millimeters to 340 millimeters. The flywheels have a thickness of between 16 millimeters and 98 millimeters. Because they spin at engine speed, flywheels are always round, and balanced to eliminate engine vibration.  

Flywheels are attached to the vehicle engine crank shaft with the intended purpose of:

· Providing a smooth surface on which the friction disc can operate

· Providing a means of engine ignition when the starter gear engages the flywheel gear

· Providing inertia during engine startup to keep the crank shaft spinning

· Providing a mounting surface onto which the clutch pressure plate assembly is bolted

· Providing heat dissipation during clutch operation

                     Transmission Side                                          Engine Side

Flywheels for smaller passenger cars tend to be smaller in size and lighter in weight.  Light trucks and large engine vehicles have the largest flywheels.

The flywheel is always located between the engine and transmission of the vehicle, as shown below:

A solid cast iron flywheel has no moving parts.  Rather it is a fixed assembly that is simple in design. Flywheels are affixed to an engine crank shaft using Grade 8 mounting bolts.

See below more detials of the position of the Flywheel:

CONTAINS BUSINESS CONFIDENTIAL INFORMATION

# image4.png

# image1.png

# image2.png

# image3.png