September 27, 2018 

VIA ELECTRONIC FILING PUBLIC VERSION 

The Honorable Robert E. Lighthizer Docket. No.: USTR-2018-0025 

United States Trade Representative 

Office of the United States Trade Representative 

600 17th St. NW 

Washington, DC 20006 

Re: Request for Exclusion from Section 301 Tariffs of Automobile Gear Shift 

Switch Assemblies 

Dear Ambassador Lighthizer: 

 

On behalf of Valeo North America, Inc. (“Valeo”), we hereby submit our exclusion request for 

certain gear shift switch assemblies from the Section 301 tariffs enacted against products from 

the People’s Republic of China (“China”). These products are not economically and 

commercially available outside of China; none of these switches are high-tech products that are 

benefiting from the “made in China 2025” program; and imposition of additional duties on these 

products would significantly undermine Valeo’s competitive advantage in both the U.S. and 

global market. 

For these reasons, Valeo respectfully requests that the gear shift switch assemblies imported 

from China, classified under HTS 8536.50.9065, be excluded from the final section 301 tariff 

list. These gear shift switch assemblies generally consist of a printed circuit board (PCB) 

populated with active and passive components (e.g. solid state relay, resistors, diodes and 

capacitor); electrical contacts; a plastic housing; and a gear shift lever. These switches are 

designed to control certain functions of an automatic transmission. Depressing the right-hand 

switch will shift the transmission to a higher gear, when depressing the left-hand switch will shift 

the transmission into a lower gear. When the gear shift lever is depressed on one side, it forces 

the corresponding contacts together completing an electrical circuit of lower voltage to activate 

the relay, which completes the supply voltage circuit to other equipment in the vehicle. A list of 

detailed production descriptions is attached herein as Attachment 1. These goods could be 

described as: 

 Gear shift Switch Assemblies, rated between 9V and 16V, and no more than 5 mA, 

comprised of at least a plastic housing, plunger and contact, connector, and curved gear 

shift lever 

Valeo hereby requests business confidential treatment for certain information clearly identified 

in brackets in the comments below, and in Attachment 1. Valeo certifies that the data include, 

inter alia, business trade secrets, commercial or financial information and certain other 
PUBLIC VERSION 

information, the disclosure of which would endanger trade secrets or profitability, and that the 

information would not customarily be released to the public. Nevertheless, Valeo has provided a 

public version of this submission which can be placed in the public file for inspection. 

I. Background 

Valeo North America, Inc. is part of the Valeo Group. The Valeo Group is one of the world's 

leading automotive suppliers, providing a wide range of products to auto manufacturers and 

after-markets, including clutches, torque converters, engine cooling modules, climate control 

systems, lighting, wipers, and sensors, for most major car makers across the globe. The 

company’s innovative solutions are developed by four business groups - Powertrain Systems, 

Thermal Systems, Comfort and Driving Assistance Systems and Visibility Systems. The Valeo 

Group has 184 plants, 55 research and development centers, and 15 distribution platforms, and 

employs 111,600 people in 33 countries worldwide. 

Valeo has been serving the United States automotive market for 25 years. In North America, 

Valeo’s regional headquarters are located in Troy, Michigan. It has various offices, warehouses, 

production sites and research and development centers across the United States in California, 

Indiana, Kentucky, Michigan, Mississippi, New Hampshire, Ohio, Texas, Tennessee, and 

Virginia, and Valeo employs more than 14,000 people in North America. 

In 2017, Valeo generated sales of 18.6 billion euros and invested over 7% of its original 

equipment sales in research and development. Valeo’s sales are diversified across its operating 

segments, with Visibility Systems accounting for about 31% of the sales, followed by Thermal 

Systems (27% of revenue), Powertrain Systems (23% of revenue), and Comfort and Driving 

Assistance Systems (19% of the group's sales). In 2017, about half of its revenues were 

generated in Europe, followed by North America (20% of revenues), China (15%), the rest of 

Asia (16%), and South America (2%). 

II. Exclusion is Requested for the Increase in Demand and Lack of Commercial 

Availability Outside of China 

Valeo’ decision to import certain gear shift switch assemblies from China is driven by our 

increased customer demand in the U.S. and globally. The imported products add complementary 

strengths to our existing production lines manufactured in the U.S. 

Our supplier of gear shift switch assemblies is [ ]. This 

supplier has no government or state-owned enterprise (“SOE”) investment. [ ] there 

have not been any issues associated with the forced transfer of technology to which the 

additional 25% duties seek to remedy. In addition, [ ] has not benefited from the Chinese 

Government’s acts, policies or practices identified by the USTR as being unreasonable or 

discriminatory and that burden or restrict U.S. commerce. To the contrary, [ ] 

increases U.S. commerce by complementing our North American facilities and allows us to offer 

a full-range of products to our U.S. and global customers. In addition, [ ] provides 

Valeo the ability to compete in a global market, to invest saved capital in the U.S., and to create 

more management and administrative jobs in the U.S. 
PUBLIC VERSION 

Valeo imports certain non-technically-sophisticated components from [ ] to produce its 

value added auto parts. The companies in China that supply Valeo are not high-tech product 

producers, are not state owned companies, and their products simply are not among those 

identified as part of the “Made in China 2025” program that would benefit from the Chinese 

Government’s acts, policies or practices identified by USTR as being unreasonable or 

discriminatory and that burden or restrict U.S. commerce. 

Valeo does not produce the imported gear shift switch assemblies in the U.S. To the best of our 

knowledge, we cannot readily source the same or comparable products elsewhere in a 

commercially sufficient and cost-efficient manner. Nor can we increase our capacity fast enough 

to meet the increased demand of our customer. In order to qualify a new supplier, the 

automotive industry requires a Production Part Approval Process (“PPAP”). In general, a PPAP 

takes one to two years. Valeo would be unable to provide components from non-Chinese 

sources until the PPAP is complete, even if the tooling was moved from the current supplier’s 

facility to one of Valeo’s North American facilities. Without [ ], we would not be 

able to provide the full-range of products desired by our customers, and, as many customers 

desire the “one-stop-shopping” that a full range supplier affords, the 25% tariff threatens our 

supply of U.S. manufactured product to these customers. 

III. Imposition of Additional 301 Tariffs would Cause Severe Economic Harm to Valeo 

The additional 25% duties on Valeo’ imported gear shift switch assemblies would significantly 

increase our production cost. As we operate in a global market, the increased cost would result in 

our foreign competitors having a significant competitive advantage over Valeo, because they will 

still be able to procure the same inputs from China without the 25% additional duty cost. This 

will make Valeo much less competitive in the global market and directly impact our ability to 

compete with foreign competitors. In turn, this will result in lost sales and, as a result, U.S. jobs. 

Further, the imported gear shift switch assemblies are also critical inputs for our customers in the 

automotive original equipment manufacturer (“OEM”) industry. The 25% additional duty would 

adversely impact our automotive OEM customers by disrupting our supply chain and increasing 

costs. The additional duties would cause job losses due to a decrease in production if necessary 

parts and equipment are not available in a cost-effective manner. 

In addition, as discussed above, our imported Chinese products enable us to supply a full-range 

of switches desired by our customers. The increased cost would undermine our ability to 

continue offering our customers a complete line of OEM auto parts, which would result in lost 

sales. 

IV. Gear shift Switch Assemblies Are Not Related to “Made in China 2025” or Other 

Chinese Industrial Programs 

Imposing additional 25% duties on the products that Valeo imports from China would serve no 

practical purpose to eliminate China’s unreasonable and discriminatory acts, policies, and 

practices identified by USTR in this investigation. Indeed, gear shift switch assemblies are 
PUBLIC VERSION 

primary automotive products that require less sophisticated production technology. Valeo’s 

supplier’s facility is not a high-tech producer that was identified in USTR’s report. The products 

produced in these facilities were not identified by the USTR report. Our imported products are 

simply not among those that benefit from the “Made in China 2025” program, or any other 

Chinese Government’s acts, policies or practices identified by USTR as being unreasonable or 

discriminatory and that burden or restrict U.S. commerce. 

In addition, force-transfer of technology only exists in joint-ventures between a U.S. and a 

Chinese company. However, [ ]. Unlike joint-ventures, [ ] do 

not result in the forced sharing of technology. Moreover, [ ]. Therefore, 

direct ownership of non-U.S. suppliers increases U.S. commerce and should be promoted as a 

matter of U.S. policy. Imposition of additional 25% duties on our imported products, however, 

will only punish Valeo with no practical effect to eliminate China’s unfair trade policies 

identified by USTR. 

V. Conclusion 

Based on the reasons stated above, we respectfully request an exclusion of the gear shift switch 

assemblies identified in the accompanying exclusion forms from the Section 301 tariffs because 

it would significantly increase Valeo operating cost and make us less competitive. The imported 

products are essential to completing our product line, and none of which are affected by the 

concerns cited by the USTR as justification for implementing the Section 301 tariffs. Tariffs on 

products that are not economically and commercially available to Valeo from U.S. producers 

will not advance national trade objectives and will be to the detriment of U.S. manufacturing. ****** 

Please direct any questions concerning this submission to the undersigned. 
PUBLIC VERSION 

ATTACHMENT 1 

Product Description List 

HTS Code Product Type Product Description Part Number Part Description 

8536.50.9065 

Automobile 

Gear shift 

Switch 

Assemblies 

Gear shift Switch Assemblies, rated between 

9V and 16V, and no more than 5 mA, 

comprised of at least a plastic housing, 

plunger and contact, connector, and curved 

gear shift lever 

[

 

]

8536.50.9065 

Automobile 

Gear shift 

Switch 

Assemblies 

Gear shift Switch Assemblies, rated between 

9V and 16V, and no more than 5 mA, 

comprised of at least a plastic housing, 

plunger and contact, connector, and curved 

gear shift lever 

[

 

]

8536.50.9065 

Automobile 

Gear shift 

Switch 

Assemblies 

Gear shift Switch Assemblies, rated between 

9V and 16V, and no more than 5 mA, 

comprised of at least a plastic housing, 

plunger and contact, connector, and curved 

gear shift lever 

[

 

]

8536.50.9065 

Automobile 

Gear shift 

Switch 

Assemblies 

Gear shift Switch Assemblies, rated between 

9V and 16V, and no more than 5 mA, 

comprised of at least a plastic housing, 

plunger and contact, connector, and curved 

gear shift lever 

[

 

]
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 particular product of concern:

4.

*

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/

7.

5. Requestor's relationship to the product:

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.

Requestor Information

Requestor Name (Last, First):

VERSION 2 CONTINUED BELOW 1
8. Is this product, or a comparable product, available from sources in the United States? (If you

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

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.

2017 Value:

2016 Value:

2015 Value:

2017 Quantity:

2016 Quantity:

2015 Quantity:

% of your total gross sales in 2017 that the Chinese-origin product accounted for.

% of the total cost of producing the final product(s) the Chinese-origin input 

accounts for.

% of your total gross sales in 2017 that sales of the final product(s) incorporating 

the input accounted for.

VERSION 2 CONTINUED BELOW 2

indicate "NO", you must provide support for your assertion in Box 12).

indicate "NO", you must provide support for your assertion in Box 12).

11. Is the Chinese-origin product of concern sold as a final product or an input used in

a) For imports sold as final products, please provide:

b) For imports of inputs used in the production of final products, please provide:

the production of a final product or products?
12. Please provide information in support your request, taking account of the

VERSION 2 END 3

instructions provided in Section B of the Federal Register notice. If you

responded "NO" to Questions 8 or 9, you must provide support for your

assertion in the box below. (Note: text entered below can extend beyond the

apparent size of this box).