Organization Name:

Note: Representatives submitting on behalf of an organization must enter information below.

Requestor Representative:

Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology 

Transfer, Intellectual Property, and Innovation - Form to Request Exclusion of Product

When submitting a product exclusion request using this form, enter the specified 

information in the following fields and explain the basis and rationale for your statements. 

By completing this form, you certify that the information provided is complete and 

correct to the best of your knowledge. 

1. Indicate whether the comment contains business confidential information (BCI), is a public

document, or is a public version of a BCI document.

3.

2. Please provide a complete and detailed description of the product of concern:

4.

5. Requestor's relationship to the product:

CONTINUED BELOW

*

10-digit HTSUS item number* for product you wish to address in this product exclusion request:

Use numerical characters only with no special characters (example: 1023456789). For help in finding 

the HTSUS item number associated with your product, see https://hts.usitc.gov/

1

7.

6. Does this submission in regulations.gov include additional attachments?

Please indicate whether any additional attachment contains business confidential

information (BCI), is a public document, or is a public version of a BCI document.

VERSION 1

Requestor Information

Requestor Name (Last, First):
END 2

8. Is this product, or a comparable product, available from sources in the United States?:

VERSION 1

11. Please provide information in support your request, taking account of the instructions

provided in Section B of the Federal Register notice (note: text entered below can extend

beyond the apparent size of this box).

9. Is this product, or a comparable product, available from sources in third countries?:

10. Please provide the value and quantity (with units) of the Chinese-origin product of concern

that you purchased for each calendar year specified. Limit this figure to the products

purchased by your firm (or by members of your trade association) alone. Please provide 

estimates if precise figures are unavailable.

2016 Value:

2015 Value:

2017 Value:

2016 Quantity:

2015 Quantity:

2017 Quantity:
PARKER HANNIFIN CORP 2018

October 9, 2018

The Honorable Robert E. Lighthizer

United States Trade Representative

Office of the United States Trade Representative

600 17th Street Northwest

Washington, D.C. 20508

Subject: Docket Number USTR-2018-0025

Request for Exclusion of Particular Products from the 

Determination of Action Pursuant to Section 301: China’s Acts, 

Policies, and Practices Related to Technology Transfer, 

Intellectual Property, and Innovation

Dear Ambassador Lighthizer:

Parker Hannifin (“Parker”) appreciates the opportunity to present this request for a 

product specific exclusion from the 25-percent additional tariff on certain imports from 

China pursuant to your findings of the Investigation into China’s Acts, Policies, and Practices 

Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of 

the Trade Act of 1974. Specifically, we request that the following product not be subject to 

the 25% ad valorem duty:
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

Page 2

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PARKER HANNIFIN CORP 2018

Product Name HTS Number 

(10-digit)

Product Description1

Mobile Hydraulic Fluid 

Power Gear Pump

8413.60.0030 Mobile Hydraulic Fluid Power Gear 

Pump (provided for in subheading 

8413.60.0030).

Hydraulic pumps are used in a broad range of industries - every hydraulic system needs a 

pump. Whether your application is industrial manufacturing, mobile construction, truck, 

agricultural equipment, or marine work, it needs a pump to supply flow and meet application 

work requirements.

Figure 1 – Mobile Hydraulic Fluid Power Gear Pump

The mobile hydraulic fluid power gear pump is imported by Parker as a finished good but is

used as a part in large mobile equipment for companies such as:

[...]

[...] 

[...]

 

1 See Annex 1 for a sample product (for reference only).
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

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PARKER HANNIFIN CORP 2018

This product should not be subject to the tariff increases for the following reasons. First, 

though highly commoditized, the Parker gear pump from China is also highly engineered,

with specialized parts and close tolerances, built to strict specifications and performance 

criteria. In other words, it would be impracticable – from both a cost and timing standpoint -

to move production elsewhere. Second, imposing the tariffs will have severe negative impact 

on the company’s operations in the United States – not only would Parker lose market share 

in the finished pump market, tariffs on imported goods would likely decrease demand for 

Parker’s U.S.-made equipment and, therefore, ability to continue manufacturing in the U.S. 

and investing in U.S. manufacturing at the current level. Finally, the technology used to 

manufacture the product has been present in China for decades and presents no interest for 

the Chinese government.2

Parker Hannifin – Company background

Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For 100

years the company has engineered the success of its customers in a wide range of

diversified industrial and aerospace markets. Parker’s engineering expertise and broad range

of core technologies uniquely positions the company to help solve the world’s greatest

engineering challenges.

Parker employs some 30,000 people in some 345 locations across the United States. Some

400 are employed at the Gear Pump Division located in Kings Mountain, NC. These jobs 

would be directly affected by tariffs on gear pumps. Parker also provide indirect employment 

across a range of ancillary services: Freight carriers, janitorial services, preventive 

 

2 Please see Annex 2 for information regarding quantity of value of these imported goods over the past three 

years, as required by Docket Number USTR-2018-0025.
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

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PARKER HANNIFIN CORP 2018

maintenance, uniform services, fluid management, first aid and emergency lighting, waste 

removal, metal recycling, cardboard recycling, wood recycling, landscapers, security 

Discussion

We believe that this product should be excluded from the Section 301 duties for the 

following reasons:

2. Mobile hydraulic fluid power gear pumps are not made in the United States at the 

necessary price point and supply is restricted outside of China. 

As referenced above, while this product may be considered a commodity product it is 

in fact highly engineered with specialized materials and close tolerances, built to strict 

specifications and performance criteria. While Parker does source similar product from two 

other countries – Czech Republic and South Korea – those sources are already less 

competitive because of higher unit prices. Moreover, it is not clear whether they would be 

capable or even willing to produce sufficient quantities to be able to supplant current Chinese 

production. Foundries are in high demand and they prefer to dedicate their resources to 

products with higher margins than gear pumps. Further research would be required to 

identify other sources. There is no known foundry in India, Taiwan or Vietnam - for 

example - which would be qualified to produce the product. Additional research would be 

costly and time consuming. In any case, resourcing these products will take 3 – 4 years of 

effort for requalifying and establishing quality and delivery elsewhere. In the meantime, 

quality engineers, product engineers, supply chain professionals, project managers and lab 

inspection assets would be required to take on such a task which would put the remainder of 

the business at risk.

As for sourcing from the U.S., there are only a few American foundries and many 

lack capacity. U.S. capacity is constrained by two factors: first is capital equipment and 

manufacturing square footage. Lead time on new equipment keeps going up and often 
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

Page 5

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PARKER HANNIFIN CORP 2018

suppliers amortize their depreciation costs into the piece price which makes them even more 

non-competitive. The second constraint is the inability to hire, train and retain qualified 

workers. Parker is already experiencing late deliveries from several U.S. suppliers due to 

this reason which has forced Parker to source from the Far East. Finally, there is the price 

component. While there are several U.S. based suppliers available, their pricing is simply 

not competitive with the target prices customers expect. It would cost as much to move 

product to the U.S. as it would to pay the tariff. 

3. Tariffs will cause considerable harm to Parker’s business without commensurate benefits 

to related American industries.

The tariff will increase the price which in turn will force our customers to seek alternatives. 

Most of our competition manufactures product outside the US, including China. Material 

content is the largest cost our product has, as tariffs rise, we have to pass along a portion to 

our customers to help cover our increased costs. This means higher costs for them and 

possibly even higher costs as they may be forced to find alternate suppliers which means 

design and engineering work to replace our highly engineered pumps and motors.

The impact is difficult to quantify since the effect on sales is unknown but typically increased 

costs don’t help business. As the profit line is squeezed, the opportunity for increased capital 

investment or the addition of new employees becomes more and more constrained. 

Employee layoffs will likely be the result of lost business due to increased costs pricing 

Parker out of the market and/or reduced demand due to higher prices.
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

Page 6

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PARKER HANNIFIN CORP 2018

4. Mobile hydraulic fluid power gear pumps are made with widely-used, mature technology 

which is not contemplated for acquisition by the Chinese government, as evidenced by the 

“Made in China 2025” report. 

Although Parker pumps are a highly-engineered product, as mentioned above, there are many 

other competitor products on the market, all of which are made in low-cost countries, 

including China. In fact, similar products have been available in the Chinese market for 

decades. There is, therefore, no need to use illegal means to acquire the technology used to 

make this product. Moreover, given the age of the product and its low cost, there is no 

incentive for the Chinese government to acquire this product. It is not in any of the areas 

designated as “breakthrough” by the “Made in China 2025” initiative.

Enforceability by Customs

A final note regarding enforceability – the U.S. Customs and Border Protection (CBP) will 

be able to effectively administer and enforce this provision due to the nomenclature 

delineated above and the ability through a simple visual review determine if the unit meets 

the exclusion request. In addition, Parker will ensure that its invoices reflect the specific 

terms of the nomenclature and maintain substantive and accessible records of import, 

production and specification standards. Parker will cooperate with CBP with respect to any 

request for back-up documentation including requests to inspect the imported merchandise 

and/or the production facility in China.

Conclusion

The key here is understanding that the gear pumps that are made in China are highly 

commoditized and are currently made in China to keep costs low to remain competitive. If 

Parker were to make these specific pumps here in the United States, they would have to sell 

the products at a loss or price themselves out of the market. Currently, although these 
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

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PARKER HANNIFIN CORP 2018

particular pumps are made in China, there are still dozens of jobs tied to bringing them to 

market (customer service, engineering, sales, purchasing, logistics, quality, accounting, etc.). 

If Parker is forced to leave the market for these items it might also incentivize customers to 

look elsewhere for Parker’s higher-margin, U.S.-made pumps which are sold to larger 

Original Equipment Manufacturer (OE): many large OE customers purchase an entire 

“package” and assortment of pumps (a mix of unique and commoditized which enables them 

to have volume discounts). 

In short, losing commoditized products made in China could put Parker at risk of losing 

unique pumps that are currently made in the United States. Thus a 25-percent tariff would 

have an effect on Parker’s business that would be more widespread than just a tariff on 

imported goods from China. A 25 percent tariff on hydraulic fluid power gear pumps would 

severely limit Parker’s ability to provide goods and services to all its U.S. customers. We 

respectfully request that you exclude mobile hydraulic fluid power gear pump (provided for 

in subheading 8413.60.0030) from the list of products imported from China subject to 

Section 301 tariffs.3

Sincerely, 

_____________________

Craig Schau

Director, International Trade

Parker Hannifin Corporation

 

3 The submitter hereby certifies that the information provided is complete and correct to the best of his 

knowledge.
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

Page 8

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PARKER HANNIFIN CORP 2018

ANNEX 1: SAMPLE PRODUCT (FOR REFERENCE ONLY)

Type Tariff Code 

(HTS)

Picture Description

Mobile 

hydraulic 

fluid 

power 

gear 

pump

8413.60.0030 

Mobile hydraulic fluid 

power gear pump

(provided for in 

subheading 

8413.60.0030).
The Honorable Robert E. Lighthizer BUSINESS CONFIDENTIAL

United States Trade Representative

October 9, 2018

Page 9

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PARKER HANNIFIN CORP 2018

ANNEX 2: ANNUAL QUANTITY AND VALUE OF IMPORTS

Type Tariff Code 

(HTS)

Annual Quantity and Value

2015 

QTY 

2015 

Import 

Value 

2016 

QTY 

2016 

Import 

Value 

2017 

QTY 

2017 

Import 

Value 

Mobile Hydraulic 

Fluid Power Gear 

Pump

8413.60.0030 [...] $[..] [...] $[...] [...] $[...]