Mark Tallo

Member, DC Bar

202-730-4968

mtallo@strtrade.com

(305) 989

PUBLIC VERSION

BUSINESS PROPRIETARY INFORMATION THAT APPEARED ON PAGE 5 AND IN THE 

ANNEX HAS BEEN DELETED

October 9, 2018

FILED VIA REGULATIONS.GOV

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 Power Supply Printed Circuit Boards

(8504.90.7500, HTSUS) 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:

On behalf of our client, Excelitas Technologies Corp. (“Excelitas”), we hereby submit a request 

for a product specific exclusion of power supply printed circuit boards, classified under 

8504.90.7500, HTSUS, which is a critical component in the production of Excelitas’ finished 

products and components produced at its U.S. manufacturing sites. This exclusion request is in 

response to United States Trade Representative’s 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 1974.1 

Excelitas hereby requests business confidential treatment for business proprietary information 

between single brackets in this submission. The disclosure of business proprietary information 

would endanger trade secrets or profitability, and this information would not customarily be released 

to the public.

 

1 Procedures to Consider Requests 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, 83 Fed. Reg. 32,181 (USTR July 11, 2018) (“Procedures to Request Product 

Exclusions”).
The Honorable Robert E. Lighthizer

Office of the United States Trade Representative

October 9, 2018

Page 2

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Executive Summary

While we understand and fully support the Administration’s goal of establishing an equitable and 

mutually rewarding trading relationship with China, we respectfully request that power supply 

printed circuit boards, 8504.90.7500, HTSUS, not be subject to the 25% ad valorem duty. These 

products should not be subject to the Section 301 tariff because applying additional tariffs will not 

remedy the trade inequities identified in the USTR Investigation nor stop the damaging industrial 

practices of the Chinese government. Specifically, tariffs on power supply printed circuit boards will 

not be effective to obtain the elimination of China’s acts, policies, and practices related to technology 

transfer, intellectual property, and innovation because they are not advanced technology and are 

not strategically important or related to “Made in China 2025” or other Chinese industrial programs 

and, as such, do not represent a target for Chinese intellectual property theft.2 Second, the tariffs 

on power supply printed circuit boards will cause severe economic harm to U.S. interests, including 

Excelitas and other small- or medium-size businesses, public institutions and, ultimately, consumers 

that rely on Excelitas’ products. Specifically, the tariffs will have a significant negative impact on 

Excelitas’ manufacturing operations in the United States and reduce its ability to continue its long 

term investment in higher paying U.S. jobs and production facilities, as well as continued research 

and development. Moreover, the tariffs would adversely impact Excelitas’ ability to compete with its 

international competitors as its exports of U.S. manufactured products will be less cost-competitive 

because of the increase input costs. 

Specific Product at Issue 

Product Name: Power Supply Printed Circuit Board

HTSUS: 8504.90.7500

Product Description: The power supply printed circuit board is part of a high power supply that 

supports and connects the other circuitry of the power supply.

Company Overview

Excelitas is a U.S.-based company providing innovative and customized optoelectronics and 

advanced electronic systems to a global customer based of leading Original Equipment 

Manufacturers (OEMs) seeking high-performance, market-driven technology solutions. Based in 

Waltham, Massachusetts, Excelitas employs 6,000 people at its various manufacturing and 

operational facilities in Massachusetts, California, Ohio, Illinois and its global locations.3 Excelitas 

is recognized as a global technology leader with a broad array of technologies and solutions for 

 

2 Procedures to Request Product Exclusions at 32,183.

3 Excelitas’ U.S. locations include: Covina, CA; Freemont, CA; Miamisburg, OH; Wheeling, IL; Salem, MA; 

and Waltham, MA.
The Honorable Robert E. Lighthizer

Office of the United States Trade Representative

October 9, 2018

Page 3

3

the lighting, detection, and advanced electronic system applications. As a global leader, Excelitas 

invests significant amounts into Research and Development to continually enhance and develop 

its product line. This R&D work and advanced manufacturing is performed in the U.S.

Annual Quantities and Value

Annual quantity and value information is included in the Annex.

The additional tariffs will have no impact on China; the products are made with stable and 

widely-used technology that is not contemplated for acquisition by the Chinese government, 

as evidenced by the “Made in China 2025” report.

Excelitas manufactures finished products and components in the U.S. that utilizes power supply 

printed circuit boards as a necessary input. The imported power supply printed circuit boards are

not advanced technology, nor do they involve advanced technology in the manufacturing process. 

It, therefore, presents no harm to U.S intellectual property (IP) right, innovation, or technology 

development. In fact, the production of power supply printed circuit boards relies on widely-used 

production techniques and does not represent the “cutting-edge” technology desired by the Chinese 

government, as evidenced by the “Made in China 2025” report. 

As observed in the USTR Investigation report, China is targeting next generation IT and high-end, 

digitally controlled machine tools or robots. In particular, USTR’s Executive Summary, “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 (3/22/18),” cited 

a plan published by the Chinese Government, entitled “Made in China 2025 (July 7, 2015).” 

As noted above, the specific product at issue is not a next-generation IT product or high-end digital 

control machine or robot or parts of those machines. The technology incorporated into power supply 

printed circuit boards is simply not the kind of “breakthrough” technology that is sought by China. 

Nowhere in the “Made in China 2025” report is there either a general or Excelitas-specific reference 

to this type of product. Furthermore, we are aware of no efforts by the Chinese government, or by 

Chinese companies, to steal this technology and believe there is no incentive for China to attempt 

to control it. Accordingly, we fail to see how inclusion of this product (i.e., power supply printed 

circuit boards) in this Section 301 action would help the USTR meet its stated objective of 

eliminating China’s policies on IPR acts, policies, and practices, or disrupting China’s industrial 

economic goals described “Made in China 2025.”

Increased Duties Will Not Deter or Eliminate the Acts, Policies or Practices of the Chinese 

Government.

After an intensive investigation into the acts, policies, and practices of the Chinese government 

concerning IPR violations and trade secrets theft, the USTR concluded that such acts, policies, and 

practices are unreasonable or discriminatory and burden or restrict U.S. commerce. In fact, China’s 

state policy seeks to expropriate foreign technology and development. Such actions are not 

acceptable to any U.S. company and should not be allowed to remain unchecked. However, the 

broad implementation of Section 301 tariffs on a wide-variety of goods and/or components will not 
The Honorable Robert E. Lighthizer

Office of the United States Trade Representative

October 9, 2018

Page 4

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eliminate, nor impact China’s behavior. As discussed above, USTR made a specific and calculated 

decision to target those industries that China could use to achieve its “Made in China 2025” goals 

of global dominance in the areas of aerospace equipment, ocean engineering, high-tech ships, 

railway equipment, energy savings, and new energy vehicles, power equipment, new materials, 

medicine and medical devices, and agricultural machinery. The imported component product 

identified above (i.e., power supply printed circuit boards) is not the target of China’s “Made in China 

2025” initiative and, traditionally, are not the source of new, cutting-edge or next generation 

technology and will have no effect on this initiative.

Moreover, the technology used to manufacture power supply printed circuit boards is generally 

available to the global public. Excelitas provides the specifications for its desired component parts 

and the foreign suppliers produce such component parts. Excelitas has never been pressured, 

required, or otherwise forced, to transfer its data or technology over to a third-party, private or 

governmental. Nor has Excelitas been limited by Chinese equity requirements, licensing laws, or 

other date-sharing arrangements. In fact, the Chinese government has never directed, nor unfairly 

facilitated, in the systematic investment in acquisition of Excelitas assets or intellectual property. 

We are entirely unaware of any data attacks or breaches by the Chinese government on any of our 

manufacturers or other attempts by the Chinese government to penetrate our computer networks 

here in the U.S. to access sensitive trade secrets.

Simply put, the Chinese government is not interested in power supply printed circuit boards. 

Imposing any additional tariffs on this item would not only harm U.S. interests, but also fail to 

influence or bring about the elimination of China’s acts, policies, and practices currently threatening 

U.S. IPR or trade secrets.

The 25% Tariffs Will Severely Harm and Undermine Excelitas’ U.S. Manufacturing 

Competitiveness, its U.S. Manufacturing Employees and Customers

We believe that this tariff will not merely be ineffective, but will also be counterproductive and 

harmful to the U.S. If imposed, the tariff threatens to have a severe and adverse impact on U.S. 

manufacturing. The power supply printed circuit boards classified in 8504.90.7500 are components 

that require further processing and are used as inputs to manufacture various items, including 

electronic components, in the U.S. 

For example, Excelitas uses the imported power supply printed circuit boards to produce finished 

products and components for use in lighting and advanced electronic system applications. As such, 

the ability to obtain high quality power supply printed circuit boards from its suppliers produced to 

the exact specifications required for the end product is critical to Excelitas’ operations. While 

Excelitas could switch to other sources, such a switch to a critical input would be costly and timeconsuming because the Company has worked with its Chinese suppliers to ensure the production 

of power supply printed circuit boards is of a sufficient quality for use in its critical electronic 

applications. 

Excelitas would not be able to absorb the increase in its manufacturing cost due to the additional 

tariff. These increases will adversely impact U.S. manufacturing and will force U.S. manufacturers 

such as Excelitas to raise prices, cut investments in R&D, or both. These decisions will negatively 

impact U.S. consumers and result in a decrease in sales both in the U.S. and export markets. 
The Honorable Robert E. Lighthizer

Office of the United States Trade Representative

October 9, 2018

Page 5

5

[

]

4 In the meantime, foreign producers of 

similar products would not see a price increase – imports of competitive finished goods are not 

subject to the Section 301 tariffs.5 The tariffs, therefore, create a tariff inversion, whereby component 

parts are taxed at a higher rate than the finished goods. This creates an incentive to move 

manufacturing to locations outside the United States. 

Finally, as an industry leader, Excelitas prides itself on its producing high-quality electronics 

products that are relied on by a variety of industries, including: lighting, detection, and advanced 

electronic systems. Innovation is a critical element of Excelitas’ success and while innovation is not 

directly impacted by the tariffs, increasing operating costs in other areas will have direct negative 

impact on the company’s resources dedicated to research and development. 

Administrability by Customs and Border Protection

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, Excelitas will ensure that its 

invoices reflect the specific terms of the nomenclature and maintain substantive and accessible 

records of import, production and specification standards. Excelitas 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.

Summary

The imposition of the additional tariffs on power supply printed circuit boards will cause more 

economic harm to a U.S. company and to U.S. workers and consumers than it will have any impact 

on China’s policies and practices. Therefore, Excelitas submits that power supply printed circuit 

boards, classified under HTSUS 8504.90.7500, be excluded from the additional 25% tariff because 

the additional tariff on power supply printed circuit boards fails to address or deter the acts, policies 

or practices of the Chinese government that these tariffs are intended to address and will cause 

severe economic harm to Excelitas.

In short, the imposition of these tariffs on Excelitas’ necessary component parts may cause job 

losses in the U.S. and could negatively affect other industries relying on Excelitas’ category of 

finished goods, small- or medium-size businesses, public institutions, governments, and, ultimately, 

consumers. We, therefore, respectfully request that the USTR remove power supply printed circuit 

 

4 Business Confidential Information. The information would not customarily be released to the public, and 

disclosure of the information would endanger trade secrets or profitability. 

5 [

]

PUBLIC VERSION - BUSINESS CONFIDENTIAL INFORMATION DELETED
The Honorable Robert E. Lighthizer

Office of the United States Trade Representative

October 9, 2018

Page 6

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boards from the list of items subject to the additional tariffs on imported Chinese goods pursuant to 

the Section 301 investigation.

Sincerely,

Sandler, Travis & Rosenberg, P.A.

By:______________________________________

 Mark Tallo

Enclosure
PUBLIC VERSION - BUSINESS CONFIDENTIAL INFORMATION HAS BEEN DELETED

ANNEX: ANNUAL QUANTITY AND VALUE OF IMPORTS

Product Description Tariff Code 

(HTS)

2015 QTY 

(est)

2015 

Import 

Value (est)

2016 QTY 

(est)

2016 

Import 

Value (est)

2017 QTY 

(est)

2017 Import 

Value (est)

The power supply 

printed circuit board is

part of a high power 

supply that supports 

and connects the other 

circuitry of the power 

supply.

8504.90.7500 [ ] *

 

* Business Confidential. The information would not customarily be released to the public, and disclosure of the information would 

endanger trade secrets or profitability.