USTR‐2018‐0025

Ogura Corporation                PUBLIC VERSION

Section 301 List 1, Exclusion Request 

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

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

Is a public version of a BCI document.

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

One of the products imported from Ogura Clutch Co, Ltd., Dong Guan, our affiliated company in China, 

is an e‐coated rotor, model A.  A photo and description is attached as Exhibit C1. 

The physical characteristics of the e‐coated rotor are as follows: 

Model A – Outer diameter (mm) 103.10, Inner diameter (mm) 44.00, Length (mm) 29.50, Material is 

steel type GB699 # 10. 

When the e‐coated rotor, model A is received at our manufacturing facility, the e‐coated rotors are 

finish machined and a bearing is installed to produce a finished rotor.   

The rotor is one of the three sub‐assemblies that makes up an automotive air conditioning (“A/C”) 

clutch.  The other two sub‐assemblies are the field core coil and armature.  All three sub‐assemblies 

make up an A/C clutch that is shipped to our U.S. customer.                                       

3.  10‐digit HTSUS item number* for product you wish to address in this product exclusion request 

HTSUS 8505.90.7501, Article description ‐ Other     

4.  Requestor Information 

Requestor Name (Last, First): Teller, Timothy

Organization Name: Ogura Corporation (“OC”)

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

Requestor Representative: Leslie Alan Glick, Butzel Long 

5.  Requestor’s relationship to the product: Importer 

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

7.  Please indicate whether any additional attachment contains business confidential information (BCI), 

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

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

Yes, but only from competitors.  Because we would be required to share customer confidential 

information with our competitors, this is a commercially impracticable option. 

There are only a couple of existing producers and they are competitors, so it’s not realistic to consider 

them for comparable product without handing our business over to them, and compromising  
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confidential information relating to our customer specifications.  Additionally, a substantial amount of 

time, resources, and investment is necessary for establishing a supply line from another source in the 

U.S.  Per IATF‐16949  (International Automotive Task Force) quality management system standards 

and requirements for automotive production, parts produced from a new source are required to go 

through strict validation and approval processes, which is very time consuming and expensive for both 

the supplier and the customer.  Even if we were able to qualify a U.S. producer, the amount of time 

this process would take would result in disruption to our supply chain and delivery schedules and be 

detrimental to our U.S. OEM customers who rely on “just in time” deliveries.                                                                             

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

Yes, but only from a major competitor.  Because we would be required to share customer confidential 

information with our competitors, this is a commercially impracticable option. 

One of our major competitors is a [                         ] company that manufacturers parts in [                     ].  

It’s important to note that they already operate with a cost advantage due to the Free Trade 

Agreement the U.S. has with [                       ].  Thus, imposing this additional tariff on China does not 

accomplish the end result expected of requiring U.S. companies to buy the product from a U.S. 

producer since a duty‐free alternative from [                       ] exists. 

10.  Please provide the value and quantity (with unit) of the Chinese – origin product of concern that you 

purchased for each calendar year specified.  Limit this figures to the products purchased by your firm (or 

by members of your trade association) alone.  Please provide estimates if precise figures are 

unavailable. 

Total of all products OC imports from our affiliate in China: 

2017 Value: $[                    ]  

2017 Quantity: [                  ] pieces  

2016 Value: $[                    ]  

2016 Quantity: [                  ] pieces 

2015 Value: $[                    ]  

2015 Quantity: [                  ] pieces 

Total e‐coated rotor model A, OC imports from our affiliate in China: 

2017 Value: $[               ]  

2017 Quantity: [             ] pieces  

2016 Value: $[             ]  

2016 Quantity: [             ] pieces 

2015 Value: $[               ]  
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2015 Quantity: [             ] pieces 

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

Section B of the Federal Register notice. 

........................................................................................................................................................................................ 

On behalf of Ogura Corporation (“OC”), we hereby submit this request and the attached supporting 

information for Exclusion of automotive A/C clutch sub‐assembly component pursuant to HTS 

8505.90.7501, from the determination of Action Pursuant to Section 301 Investigation into China’s Acts, 

Policies, and Practices Related to Technology Transfer, Intellectual Property and Innovation, in 

accordance with the proposal by the U.S. Trade Representative (USTR) to impose a tariff of an additional 

25% on certain Chinese imports on List 1. 

1. Introduction 

OC, a Michigan corporation based in Chesterfield, MI, was established in January 1988 as a subsidiary of 

Ogura Clutch Co., Ltd., Japan, to supply automotive A/C compressor clutches to U.S. OEM automobile 

and parts manufacturers in North America.  OC began supplying products primarily to [                              ] 

[                                                                                                  ].  In the early 2000’s, OC expanded its 

production capacity to manufacture A/C clutches for Japanese transplant automobile and parts 

manufacturers, including [                                                                                                                                         ] 

[                                                                                ].  More recently OC has expanded into transfer case coil 

assemblies and differential coil assemblies for [                                                   ].  OC also has a small 

aftermarket business that has been declining over the years. 

OC’s products are imported from Ogura Clutch Co., Ltd., Dong Guan, our affiliated company in China.  

Importing these products from our affiliate in China allows us to be competitive with other suppliers 

marketing the same products to our U.S. customers.  Maintaining production of the [                          ] 

[            ] of our products in China allows us the ability to competitively perform the final assembly 

processes in the U.S. 

2. Product is Not Available from a Commercially Practicable Source Outside China 

As explained in the responses to Nos. 8 and 9 above, the e‐coated rotor model A is not available from 

any sources outside of China other than OC’s competitors, and OC would be forced to disclose its 

customer confidential information to its competitors.  This makes the e‐coated rotor model A effectively 

unavailable from any source outside of China. 

3. Product is Not Related to “Made in China 2025” and is Not Strategically Important   

The manufacturing process in China is not a high‐tech operation and our products are not strategically 

important or related to “Made in China 2025” or other Chinese industrial programs.   

Automotive air conditioning was first installed and offered in U.S. vehicles by Packard in 1939.  Of course 

systems have advanced since introduction, but this is extremely old technology and has been around for 

many years.  The AC clutch sub‐assemblies we produce and the fact that parts are produced at our 

affiliated company in China is not related to technology transfer, intellectual property or innovations,  
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further supported by the existence and production of this type of product for almost 80 years.  That’s 

also why most all of the AC clutch production business has moved offshore primarily to China.  At least 

OC maintains as much of the production as feasibly possible in the U.S.  The imposition of tariffs will 

[                                                                                                                                                                                     ] 

[                                        ]. 

4. Additional Duties Would Cause Severe Economic Harm to OC, the Industry, and Other U.S. Interests 

 1. OC employs approximately [   ] employees in Chesterfield, MI of which [   ] are directly related to the 

manufacturing process and final assembly of products imported from our affiliate in China.  If we did not 

[                                                                                                                      ] to our affiliate in China, we would 

not be [                                                                                                                                                                         ] 

[                                                                                                             ]   

The imposition of the Section 301 tariff on our goods imported from China is potentially devastating to 

our business and will certainly cause severe economic harm to OC.  Our current annual U.S. sales are 

$[  ] million, and we import $[  ] million of product from our affiliate in China.  Due to the 25% tariff on 

these imports, OC will incur a cost increase of $[                                                ].  This represents [    ]% of 

our annual sales of $[  ] million.  Without the imposition of tariffs, OC usually operates at [                      ] 

[                                                                                                                                                                             ] 

[                                                                                  ]. 

The e‐coated rotor model A represents $[   ] million of our annual U.S. sales total, and we import $[    ] 

million from our affiliate in China.  The e‐coated rotor model A is an integral part of the aforementioned 

business perspective.    

 2. Our U.S. customers, such as [                                                                                    ] are not receptive to 

sharing any portion of the cost increase due to the tariffs imposed.  This is primarily due to our contracts 

being [                                                                                                                                                                   ] 

[              ].    

Our U.S. customers have manufacturing operations that employ workers in the U.S. and produce 

vehicles in the U.S.  Our U.S. customers will eventually suffer severe economic consequences [           ] 

[                                                                            ].   

Larger suppliers have deeper pockets and can absorb costs and move things around.  The smaller 

suppliers [            ] can’t absorb these costs or move operations and the end result will be much worse 

than the recession that began in 2008.  Ultimately the increase in costs due to the tariffs will be passed 

on to consumers, but it will be a painful process getting to that point, with the loss of smaller companies 

and many U.S. workers along the way.  Overall the tariffs will lead to higher U.S. consumer prices, lower 

overall U.S. economic growth, higher unemployment and other unintended negative economic 

consequences. 

 3. One of our strongest competitors is a [                        ] company with their production facilities located 

in [                      ], not the U.S.  They already have an advantage because they import product into the 

U.S. duty‐ free, under the Free Trade Agreement between the U.S. and [                      ].  [                            ]  
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[                    ] they would certainly be in a position to ramp up production in [                     ] and further 

erode the U.S. work force as they have already done due to the existing Free Trade Agreement. 

 4. The imposed tariffs are certain to displace U.S. workers and weaken job prospects for the U.S. 

workforce.  [                                                                                                                                                           ] 

[                                                                                                                                                                                 ] 

[                                                                                                              ] 

[                                                                                         ] to retain our current customer base.  If we 

[                                                                                                                                                                               ] 

[             ] that are used in the final assembly process.  [                                                                                  ] 

[                                                                 ] as well. 

Should you have any further questions or should additional supporting documentation be requested, 

please contact our legal counsel: Leslie Alan Glick, Esq.; Butzel Long, 1909 K. Street, N.W., Suite 500, 

Washington D.C. 20006; glick@butzel.com  

We thank you for your time and sincerely hope that your careful consideration of our situation will 

result in granting us a Section 301 exclusion. 
 E-coated rotor model A.

 ( Front ) ( Side ) ( Back )

 MODEL A

 MADE IN CHINA

 O.D. (mm) 103.10

 I.D. (mm) 44.00

 LENGTH (mm) 29.50

 MATERIAL GB699 #10

 EXHIBIT C1

E-coated rotor A
Certifications 

The requestor certifies that the information provided is complete and correct to the best of our 

knowledge and that disclosure of the business confidential information would endanger trade secrets or 

profitability, and that the business confidential information would not customarily be released to the 

public. 

Ogura Corporation 

Timothy Teller, President