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

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

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

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

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Submitted Via WWW.Regulations.Gov

October 9, 2018

Ambassador Robert Lighthizer, U.S. Trade Representative

Office of the United States Trade Representative

600 17th Street NW, Room F516

Washington, DC 20508-0001

RE: USTR 2018-00025; Request for Exclusion from the Determination of Action Pursuant 

to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, 

Intellectual Property, and Innovation Tariff Under Harmonized Tariff Code (HTS) 

9031.49.9000

Dear Ambassador Lighthizer,

This request for exclusion is submitted pursuant to Federal Register notice published on July 11, 

20181, establishing the process to submit exclusion requests from tariffs applied to U.S. imports 

pursuant to the Determination of Action Pursuant to Section 301 of the Trade Act of 1974: China's 

Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation.

We hereby respectfully request that the SKU # CNC 500 Semi-Finished Benchtop Metrology 

Transport optical measuring and checking instrument (CNC 500) imported by Quality Vision 

International (QVI or the Company), under HTS code 9031.49.90 be excluded from the additional 

25% tariff imposed on this HTS code pursuant to Section 301.

Background

QVI is a U.S. Based manufacturing company with over $80 million in annual sales that has been 

in business since 1946. Based in Rochester, NY, QVI is a leader and innovator in the optical and 

multisensory measurement industry and has pioneered the development and manufacture of 

imaging optics, illumination, image processing, lasers and other types of non-contact sensors, as 

well as mechanical and electronic systems that are fundamental components of automatic 

measurement systems. 

The CNC 500 instruments are produced in QVI’s wholly owned facility located in Shenzhen China

(QVI Shenzhen). The product is produced solely for QVI Rochester and is not sold to third party 

customers. The product is shipped to QVI Rochester in semi-finished condition and following 

importation QVI Rochester performs additional value-added operations including installation of 

QVI proprietary software, installation of a computer and operating system, performance of other 

ancillary final assembly operations as well as final calibration, certification and packaging. 

Explained below are the reasons why QVI’s CNC 500 meet the elements in the Federal Register 

notice to be excluded from the additional tariff under Section 301.

1. Detailed description of the subject CNC 500

 

1 83 Fed. Reg. 32181 – 32184 (July 11, 2018).
Page 2

The CNC 500 is classified under HTS subheading 9031.49.90: “Measuring or checking 

instruments, appliances and machines, not specified or included elsewhere in this chapter; profile

projectors; parts and accessories thereof: Other optical instruments and appliances: Other”. The 

HTS classification to the 10th digit is 9031.49.9000: Other optical instruments and appliances: 

Other: Other”. The product is described as a three-dimensional optical measurement machine

and is used for industrial quality control purposes to visually examine and inspect the physical 

features of manufactured articles to verify their dimensional integrity. The product incorporates 

an optical imaging system comprised of precision lenses that are incorporated into a motorized 

zoom unit that incorporates specialized electronics that control the motion and illumination of the 

unit. The optical system is mounted on a frame and is oriented above a moveable stage that is 

used for placement of the manufactured part or component to be examined and allows for the 

movement of the part in three dimensions, so the parts’ features can be viewed using the optical 

system. The frame is mounted on thick a rigid base made of granite to impart stability to the 

precision instrument. The unit weighs close to one ton (1810 lbs.)

2. The CNC 500 is sourced from China solely because QVI Rochester does not have the

production space / capacity to manufacture the product.

QVI manufactures nearly all of its product offerings in its Rochester, NY facility, which include 

many other types and models of inspection machines. QVI has experienced robust growth during 

the past two decades. and has expanded its facility five times during the past 20 years. Due to 

the property constraints at the Rochester location, QVI opened a small facility (9 people) in 

Shenzhen China in 2016 to handle the capacity overflow for the CNC 500 and signed a lease for 

the Shenzhen location which is in force until 2020. 

QVI is not sourcing from China in order to save money as it is actually costlier to produce the 

CNC 500 in Shenzhen than in Rochester. While the Shenzhen facility is small, relocating the 

facility outside of China would present a significant financial burden and potential disruption of 

product supply, and would also require QVI to continue paying on the property lease unto 2020. 

In short, QVI has no present viable alternative for its supply of CNC 500 machines outside of its 

dedicated Shenzhen facility for at least two years. This leaves QVI no other option but to continue 

purchasing from its facility in China despite the 25% tariff. The tariff will dramatically impact QVI’s 

ability to compete in the global marketplace for optical measurement machines like the CNC 500, 

and will invariably lead to the loss of sales, and ultimately market share because the Company’s 

global competitors outside of the U.S. will not be burdened with a 25% tariff on machines with 

similar performance characteristics. 

3. Relevance to “Made in China 2025” program

The CNC 500 machines manufactured by the Shenzhen facility are made according to QVI’s own 

proprietary specifications. QVI has experienced no breach of its intellectual property rights from 

this factory and the Company would instantly lodge a complaint if such violation were identified.

As the intellectual property is owned exclusively by QVI, it is not transferring any IP to the Chinese 

factory and there is no forced transfer of technology. Further, these machines are not considered 

an item which would be susceptible to potential intellectual property or high-tech appropriation by 

the Chinese factory. 
Page 3

Also, the CNC 500 is not covered under one of the ten industries which are the focus of the “Made 

in China 2025” program. Rather, these industries include: (1) advanced information technology; 

(2) robotics and automated machine tools; (3) aircraft and aircraft components; (4) maritime 

vessels and marine engineering equipment; (5) advanced rail equipment; (6) new energy 

vehicles; (7) electrical generation and transmission equipment; (8) agricultural machinery and 

equipment; (9) new materials; and (10) pharmaceuticals and advanced medical devices.

Additionally, there is no joint venture between QVI and the Shenzhen facility and the business 

relationship is not subject to any Chinese administrative policies. Thus, penalizing QVI whose 

intellectual rights are already protected by forcing it to pay additional duties does not further the 

U.S. government’s policy regarding the “Made in China” initiative. In fact, the relationship between 

the Section 301 tariff goals and the actual impact in this instance is nonexistent. Applying the 

Section 301 tariff to the imports of the CNC 500 machines by QVI does not serve the purpose of 

the Section 301 goals but in fact contravenes the goals.

There is accordingly no direct link between these relatively low volume imports of the CNC 500

machines and the goals of the Section 301 tariffs to address the targeted industries in the “China 

2025” program. 

Conclusion

QVI supports U.S. efforts to level the playing field with China. However, given that QVI has no 

viable alternative to sourcing the CNC 500 machines from the Shenzhen facility for at least two 

years, the negative financial impact associated with the imposition of the 25% tariffs will have a 

severe and disproportionate impact on QVI and will likely result in lost sales and market share, 

without advancing the goals of the Section 301 action. For these reasons, QVI respectfully 

requests that the CNC 500 machines be excluded from the Section 301 tariffs covering HTS 

subheading 9031.49.90.

Best regards,

Adrienne Braumiller, Partner.

Trade Counsel for Quality Vision International