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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

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.

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

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5. Requestor's relationship to the product:

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

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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

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1

Via online submission at regulations.gov, docket number USTR-2018-0025

PUBLIC DOCUMENT

October 9, 2018

The Honorable Robert E. Lighthizer

U.S. Trade Representative

Office of the U.S. Trade Representative

600 17th Street, NW

Washington, DC 20006

Re: USTR-2018-0025 — Request for Exclusion of Product 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:

Steelcase Inc. (“Steelcase”) respectfully requests the exclusion of certain Linak-branded 

electrical controllers (the “Linak controllers”),1 imported under HTS 8504.32.0000, from the 

tariffs imposed by USTR’s Notice of Action dated June 20, 2018 (the “Notice of Action”).2 The 

Linak controllers, more fully described in the table below, are critical components of Steelcase’s 

Ology line of height-adjustable desk products, which comprise a thriving segment of our overall 

business.

As explained in the following submission, we strongly believe that exclusion of the Linak 

controllers is warranted because sourcing these products from China allows Steelcase to 

support considerable U.S. manufacturing and assembly activities. The tariffs would force us to 

consider shifting these activities outside the U.S., causing considerable economic harm to the 

communities where these operations are located and to the U.S. economy more broadly. Far 

from advancing USTR’s policy goals with respect to China’s technology transfer, intellectual 

property, and innovation practices, the ultimate effect of the tariffs could be precisely the 

opposite of the Administration’s intention to support American manufacturing, services, and 

innovation.

This exclusion request provides further information about Steelcase and the negative economic 

impact of the tariffs. We greatly appreciate your attention to these concerns.

 1 Linak is the importer of record for these products. 2 83 Fed. Reg. 28710 (June 20, 2018).
2

Product Name 10-Digit HTS 

Classification

Physical Description and Proposed Tariff Language

Linak Controller (depicted 

below)

8504.32.0000

Electrical transformers other 

than liquid dielectric, having a 

power handling capacity

exceeding 1 kVA but not 

exceeding 16 kVA

The Linak Controller is comprised of a control box 

including a black plastic casing, measuring roughly 10” 

long by 4” wide. It has a power outlet and 2 or 3 RJ cable 

outlets. The casing is distinctively marked with two silver 

color labels with the Linak logo and product identification 

numbers, including CBD6S. Each unit weighs 

approximately .402 KG.

1. Steelcase: A Leader in American Manufacturing and Innovation

Based in Grand Rapids, Michigan, Steelcase has grown to become the world’s largest 

manufacturer of office furniture. We are proud of our legacy as a U.S. manufacturer, and today 

employ 2,575 people in our manufacturing and assembly operations across the United States, 

including close to 1,000 employees in the Michigan manufacturing facility that assembles the 

Ology product line relevant to this request. In total, we employ 7,450 people in the U.S.

Our growth strategy is centered on translating research-based insights into products, 

applications, and experiences that help the world’s leading organizations amplify the 

performance of their people, teams, and enterprise. Investment in human-centered design is 

fundamental to this strategy, and has yielded new products, applications, and experiences 

designed to address the significant trends affecting the workplace, such as global integration, 

disruptive technologies, worker mobility, distributed teams and the need for enhanced creativity, 

collaboration, rejuvenation, and innovation.

The Ology product line is emblematic of the company’s approach to innovation. The Ology 

height-adjustable desks evolved out of extensive research into the physiological and biological 

needs of today’s workers. This research revealed that people are simply not moving enough 

throughout their workday – in fact, adults are sitting 50-70 percent of the time. This sedentary 

workstyle may pose physical challenges, from back and neck pain to repetitive stress injuries. 

The Ology product line addresses this issue, by allowing employees to change worksurface 

height and posture with intuitive controls, encouraging a variety of movement.

The Ology product line was conceived and developed by a Steelcase innovation team in Grand 

Rapids, Michigan. The height-adjustable legs of the Ology desks are assembled at Linak’s 

Louisville, Kentucky, facility, which is where integration of the Linak controllers occurs. Linak 

undertakes additional value-added work at this facility, including programming of the controller 

boxes for the products as well as relabeling and kit packaging (the combination of cables, 

switches, and control boxes in one package). The legs are then shipped to a Steelcase facility in 

Kentwood, Michigan for further assembly. The domestic facilities operated by Linak and 

Steelcase collectively employ over a thousand Americans.

Linak controllers allow users to determine and modify the height of the Ology desks. The 

integration of the Linak controllers also allows users to effortlessly move the desk up or down 

without taking their eyes off their work, and technology reminds them to change posture. Users 
3

may create a profile with preset desk heights and preferred intervals of sitting and standing, and 

the Bluetooth-enabled Linak controllers let the Ology desks seamlessly pair with a mobile app 

we created for the desks’ users. This means a user can walk up to any Ology desk and the desk 

will recognize the user’s preset preferences and allow a user to track his or her level of activity 

over time. The Linak controllers are manufactured in China by a third-party supplier, Flextronics, 

that carries out manufacturing activities on behalf of Linak.

In total, at least 85% percent of Steelcase’s investment in designing, manufacturing, and 

distributing Ology products for the U.S. market occurs in the United States, and helps support 

hundreds of U.S. jobs at the Michigan and Kentucky facilities referenced above and Steelcase’s 

other domestic locations.

The Ology product line has received a strong reception in the marketplace. The sales 

performance has been much stronger than originally forecast. We anticipate significant growth 

in this product category to continue, with an approximate 45 percent increase in sales projected 

over the next four years. This is exactly the kind of American innovation success story that U.S. 

trade and industrial policy should support. All the high-value research, development, processing, 

assembly, and finishing work involved in making Ology desks for the U.S. market occurs in the 

United States and has helped cement the position of Steelcase as a leader and an innovator in 

workplace design, as well as a proud American manufacturer and job creator.

2. China is the Only Viable Source for the Linak Controllers Used by Steelcase

Although all the high-value production involved in making the Ology product line occurs in the 

United States, Steelcase has found that it is most cost-effective to source certain components, 

like the Linak controllers, from third parties that source from suppliers in China. China has the 

world’s highest concentration of electronics component manufacturing, and, therefore, offers the 

lowest manufacturing costs for such components. Lower costs for basic components help 

Steelcase focus more of its investment on the value-added activities we undertake in the United 

States, including the bulk of the manufacturing and assembly of our products for the domestic 

market, as well as research and development and other corporate activities.

Alternative manufacturers of the Linak controllers exist in other parts of the world; however, 

Steelcase and its suppliers face three challenges shifting our supply chain to these sources. 

First, sourcing from these alternative manufacturers entails much higher costs that would eat 

into the margin available to support our domestic activities. Furthermore, shifting supply chains 

takes a considerable amount of time, meaning that we will be required to pay the tariffs for 

months or even years even if our suppliers ultimately shift manufacturing out of China.

Third, and most importantly, the entire Ology product line has been engineered around the 

specific technology embedded in the Linak controllers. Shifting to a different supplier would 

require a significant financial investment to ensure that the alternative components are 

compatible with other elements of the Ology products. To cite just one example, we estimate 

that development of the mobile app that can be used to control our Ology desks required an 

investment of approximately one million dollars; updating the app to ensure compatibility with 
4

the firmware embedded in a different type of controller could require a similarly substantial 

commitment of resources.

Taken together, these three factors mean that we are severely constrained in our ability to shift 

our sourcing of the Linak controllers away from China in the near term.

3. The Tariffs Increase Costs for Steelcase and its Customers, and Compromise U.S. 

Manufacturing and Innovation

Without a feasible alternate source, the effect of the tariffs will be to increase the cost of the 

Linak controllers by an order of magnitude. This will have two related consequences, both 

creating disproportionate economic burdens for Steelcase and its customers. First, Steelcase 

will likely need to pass along some or all of the increased cost to its customers, many of which 

are small- and medium-size businesses located in the United States. These price increases will 

make Steelcase height-adjustable products less attractive as compared to similar products 

made, and exported to the U.S., by our foreign competitors. In addition to raising costs for these 

customers – complicating their own finances and plans for growth – higher prices could reduce 

overall demand for the Ology product line, and will mean that fewer workers will have access to 

the health-promoting elements of the product line. Together, reduced sales and higher costs will 

also erode the amount of capital available to Steelcase for investment in growing our business, 

including in further development of the Ology product line.

These impacts may force Steelcase to reevaluate our manufacturing and assembly of the Ology 

product line in the United States. Shifting these production activities to lower-cost locations 

overseas is not a step we wish to take, but one that may become necessary given the 

competition we face in our business. This could mean the loss of jobs supported by our 

operations at the Michigan and Kentucky facilities referenced above.

Ultimately, the tariffs will punish – rather than reward – American companies like Steelcase that 

have placed American innovation at the heart of their growth strategy, and have focused their 

U.S. operations on the high-value production that work requires.

4. Tariffs on the Linak Controllers Will Not Advance USTR’s Policy Goals with 

Respect to China’s Technology Transfer, Intellectual Property, and Innovation 

Practices

The August 14, 2017 Presidential Memorandum that launched USTR’s investigation of Chinese 

technology and intellectual property practices focused on measures that “inhibit United States 

exports, deprive United States citizens of fair remuneration for their innovations, divert American 

jobs to workers in China, contribute to our trade deficit with China, and otherwise undermine 

American manufacturing, services, and innovation.”3 None of these factors is at issue in the 

case of the Ology product offering, or the Linak controllers.

 3 Presidential Memorandum, 82 Fed. Reg. 39007 (Aug. 17, 2017).
5

To the contrary, Steelcase is an example of an innovative American company creating an 

entirely new export market for its products, since the Ology products are shipped globally from 

Steelcase facilities in the United States. Sourcing components from abroad has allowed 

Steelcase to maximize the returns on this innovation to its U.S. stakeholders, including its 

employees and shareholders, among others. Far from undermining U.S. manufacturing and 

innovation, this is a situation where the flexibility to source from overseas has allowed 

innovation to thrive.

Further, the imposition of tariffs on components like the Linak controllers is unlikely to be 

effective in obtaining the elimination of the Chinese practices that motivated the USTR 

investigation. As described above, China is the only economically viable source for the 

components in question. Without the option to source these components domestically or from 

other countries, the only impact of the tariffs will be to substantially increase costs for U.S. 

businesses – which is highly unlikely to have the desired deterrent effect. In addition, Steelcase 

is not aware that the Linak controllers have been the subject of any Chinese efforts to 

expropriate U.S. technology and intellectual property. These commodity-type products are 

almost certainly not a focus of “Made in China 2025” or China’s other industrial policies.

5. Conclusion: Exclusion of the Linak Controllers is Necessary to Promote and 

Reward American Manufacturing and Innovation

Steelcase is a proud American manufacturer that has made investment in American innovation 

the centerpiece of its growth strategy. The fact that certain components for our American-made 

products are sourced from China does nothing to change these facts, and indeed highlights that 

Steelcase has focused its U.S. operations on high-value production that supports well-paying 

jobs and strong domestic economic growth. These benefits would be put at risk by imposing 

tariffs on Linak controllers, which will only create economic burdens for Steelcase and its 

customers without advancing any U.S. policy goals. Therefore, for the reasons stated above, 

Steelcase respectfully requests that USTR exclude the Linak controllers from the tariffs imposed 

by the Notice of Action.

We believe U.S. Customs and Border Protection (“CBP”) will be able to easily administer an 

exclusion for the Linak controllers used by Steelcase. The Linak controllers are described in 

terms of their specific physical characteristics in the table above. Furthermore, the controller 

casing is distinctively marked with two silver labels with the Linak logo and specific product 

identification numbers. The shipping boxes for the product also are marked with the Linak brand 

name and company logo. Steelcase and our suppliers are also willing to work directly with CBP 

to ensure the proper identification of the Linak controllers, including preparation of a list of 

specific product identification numbers.

Thank you very much for your consideration. Please do not hesitate to contact me with any 

questions about this submission, or if any additional information would be helpful to USTR’s 

determination.
6

I, Hannah Murray Naltner, certify that the information provided herein is complete and correct to 

the best of my knowledge.

/s/ Hannah Murray Naltner

Hannah Murray Naltner

Senior Corporate Counsel

Steelcase Inc.