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 product of concern:

4.

5. Requestor's relationship to the product:

CONTINUED BELOW

*

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/

1

7.

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.

VERSION 1

Requestor Information

Requestor Name (Last, First):
END 2

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

VERSION 1

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

provided in Section B of the Federal Register notice (note: text entered below can extend

beyond the apparent size of this box).

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

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.

2016 Value:

2015 Value:

2017 Value:

2016 Quantity:

2015 Quantity:

2017 Quantity:
October 9, 2018

Ambassador Lighthizer

U.S. Trade Representative

600 17th St., N.W.

Washington, DC 20508

PUBLIC VERSION

BUSINESS PROPRIETARY INFORMATION FOR WHICH PROPRIETARY 

TREATMENT IS REQUESTED HAS BEEN REMOVED BETWEEN BRACKETS ON 

PAGE 5

Re: 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

USTR-2018-0025-001

Dear Ambassador Lighthizer: 

On behalf of the Tormach, Inc. (“Tormach”), I hereby submit a request for a product 

specific exclusion of HTSUS 8459.61.0080 for single phase, three-axis computer numerical 

control (“CNC”) milling machine tools, under 2,000 pounds with up to 10,000 RPM spindle speed

and spindle power equal to or less than 3 horse power (“Milling Machines”). A formal description 

of the Milling Machines is detailed below in Section III. 

Tormach 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. 

I. Executive Summary

Tormach submits that the 25-percent additional duties on Tormach’s Milling Machines will 

cause disproportionate economic harm to U.S. interests, including our company, our U.S. 
manufacturing facilities, and small and medium sized business that rely on our products throughout 

the United States. Tormach’s Milling Machines should be exempted from the Section 301 25-

percent tariff because:

1. The inclusion of these tariffs on this product will cause disproportionate economic 

harm to Tormach and other U.S. interests, including small and medium size business 

throughout the United States that rely on Tormach’s product, some of which service 

the U.S. military;

2. Moving manufacturing facilities to the United States is not economically feasible 

without causing the company significant financial, customer and market share losses;

3. This product is not strategically important to the “Made in China 2025 initiative 

because it is not “cutting edge” technology and the minimal imports of this product will 

have no impact on curbing China’s act, policies or practices;

4. The exclusion of these tariffs on this product will not interfere with the intellectual 

property rights of U.S. companies or results in theft of U.S. companies’ trade secrets. 

II. Company Overview 

Tormach is a small, U.S. company with a full-time staff of forty-five (45) people in 

Waunakee, Wisconsin, located just outside Madison. These professionals manage our operations 

including, but not limited to, engineering, logistics, marketing and technical support. Additionally, 

Tormach directly provides income to about fifty (50) U.S.-based consultants, installation 

technicians and distributors. Most importantly, Tormach is an Employee Owned Company 

(“ESOP”), meaning that 100 percent of our employees share in ownership of Tormach. 
Tormach indirectly is responsible for hundreds of additional jobs due to Tormach’s 

purchase of over three-million dollars ($3,000,000) in products and components from U.S.-based 

contract manufacturers in our supply chain. These contractors are small businesses located in 

California, Tennessee, Texas and Wisconsin. We are able to employ, directly and indirectly, by 

leveraging our purchases with those from China. Tormach’s supply chain in interrelated and 

dependent on each individual piece. Tormach creates American jobs that are high-quality and 

technical in the areas of computer science, digital marketing, engineering, machining and supply 

chain management. 

Tormach designs, sells and supports small Computer Numerical Control (“CNC”) milling 

machines and lathes. Tormach’s CNC machines, unlike traditional milling machines and lathes, 

are distinct and unique as Tormach’s products service small U.S. entrepreneurs, technical colleges

and micro-businesses. Sixty percent (60 percent) of our revenue is from sales to small and 

medium-sized businesses, startups and entrepreneurs. Our machines are ideal for prototyping, 

Research and Development (“R&D”), and small production runs. Our equipment and training 

have enabled hundreds of our customers to turn their ideas into successful businesses, resulting in 

thousands of U.S. jobs. In addition, many of our customers go on to buy larger and more expensive 

U.S.-made machines as their businesses grow. Twenty percent (20 percent) of our revenue is from 

sales to high schools, technical colleges and universities, resulting in hands-on STEM/engineering 

education for students across the country.

III. Specific Product at Issue

The products subject to this exclusion request are Tormach’s Milling Machines. 

Specifically, the good for which Tormach is seeking an exclusion is:
Single phase, three-axis computer numerical control (“CNC”) milling machine tools, 

under 2000 pounds, with up to 10,000 RPM spindle speed, and spindle power less than 

3 horse power classified under HTSUS 8459.61.0080. 

IV. Administrability by U.S. Customs and Border Protection

The U.S. Customs and Border Protection (“CBP”) will be easily administer this exclusion 

due to the eo nominae classification at the 10-digit Harmonized Tariff Schedule and the written 

description provided herein. There is nothing inherently difficult about the specification of the 

product that would require CBP to make complex differentiations in order to administer the 

exclusion. There are easily identifiable data elements that are part of existing customs entry 

declarations that would ensure that only those products produced by Tormach are entered under 
the exclusion. A simple visual inspection of the Tormach product will also easily enable CBP to 

enforce the provision. In addition, Tormach will ensure that its invoices reflect the specific terms 

of the classification and maintain substantive and accessible records of import, production and 

specifications. Tormach will cooperate with CBP with respect to any request for documentation, 

including requests to inspect the imported merchandise and/or the production facility in China. 

V. Annual Quantities and Value

Tariff Code 

(HTS)

Annual Quantity and Value

QTY

2015

Import 

Value

2015

QTY 

2016

Import 

Value

2016

QTY

2017

Import Value 

2017

8459.61.0080 [ ] [ ] [ ] [ ] [ ] [ ]

VI. The 25-Percent Tariffs Will Severely Harm and Undermine Tormach’s 

Competitiveness

a. Tormach’s product quality and quantity cannot be readily met through 

alternative country sourcing

Tormach cannot source the Milling Machine from other countries. First, the products from 

other third country sources cannot meet our needs as Tormach has demanding specification 

requirements. Additionally, this product is not manufactured in the United States. The machines 

that are U.S. made product do not have the capabilities of our product. The closest U.S.-made 

offerings require industrial locations with three (3) phase power, formal training for operation, and 

cost three (3) to ten (10) times more than our equipment. Our product is marketed and purchased 

PUBLIC VERSION
by a different clientele than are purchasing the other, larger machines produced in the U.S. We 

cater to micro, small, and medium-sized companies and we sell to schools for training. There are 

no viable U.S. options for our customers if we are unable to import these machines at affordable 

prices.

Additionally, Tormach cannot simply shift manufacturing to third countries. Such a shift 

would require significant time and economic resources that Tormach does not have the means to 

expenditure. In fact, it would take more than a year to develop the final product with a new supply 

chain to meet our demanding specification requirements. 

China is a small supplier of these types of goods accounting for only three-point-seven 

percent (3.7 percent) of the total market. The other country suppliers of goods classified under 

HTSUS 8459.61.0080 make a very different product. Tormach’s product is only one of many 

products classified under this subheading and represents a very small number of products. As 

such, the removal of our products from the imposition of the tariffs will not have a significant 

impact on the U.S.’s ability to impose a penalty on Chinese exports, as many other products will 

remain subject to the tariff under this HTSUS designation. Furthermore, the Chinese will not be 

impacted or influenced in any way by leaving our goods subject to the tariff because of this 

insignificant quantity of goods. 

Total U.S. Imports for Consumption (in US$)

8459.61.0080

Country 2017 % Share of Total

Germany 36,701,515 38.1

Japan 14,468,110 15.0

Italy 12,156,761 12.6
Spain 9,372,362 9.7

Finland 4,225,936 4.4

China 3,594,146 3.7

Switzerland 3,510,626 3.6

b. The imposition of additional duties on this product would cause severe, 

economic harm to Tormach and other U.S. interests.

The imposition of the 25-percent tariffs will cause disproportionate, negative impact on 

Tormach, risking Tormach’s economic viability and competitiveness in the United States industry. 

Tormach remains economically viable and competitive in the United States industry due to

Tormach’s ability to sell affordable, CNC machines to manufacturers, entrepreneurs, product 

developers, R&D professionals, hobbyists, and technical educators. Some of our customers 

develop products for the U.S. military. Our customers want an affordable, small CNC machine 

to: enable fast-turn prototyping; flexible second-operation machining; tool room and 

manufacturing support; custom, boutique, and on-demand manufacturing; and manufacturing 

training.

The following table lists just a few of the over seven-hundred (700) U.S.-based small business 

that we have served in the past year:

Customer Location Area of Business

Blue Canyon Research Boulder, CO Spacecraft for telecommunication industry

Thuli Tables Dodgeville, WI Chiropractic tables

Bondhus Monticello, 

MN

Specialty wrenches

Airbourne Systems Pennsauken, NJ High-performance aerial delivery systems for 

the military

Enventek Buchanan, MI Custom machinery for the home building 

industry
Pulsar Vascular Los Gatos, CA Minimally invasive neurovascular devices

Blackmore Sensors and 

Analytics

Bozeman, MT Advanced LIDAR systems

Endogastric Solutions Redmond, WA Products for incisionless gastrointestinal 

therapy

Terves Inc. Euclid, OH Engineered materials for the oil and gas 

industry

August Home Inc San Francisco, 

CA

Smart home technology

Nexgen Composites Franklin, OH Lightweight structural composite panels for the 

military

La Cantina Doors Oceanside, CA Large, opening custom doors

Bailey Bridges, Inc. Fort Payne, AL Portable bridge systems for the military

Delta Scientific Corp Palmdale, CA Vehicle barricade systems

The market for our machines is divided between industrial and small use. We specialize in 

small use. This market is further divided between the affordable and the expensive. Like any 

product, there needs to be an offering for each level of purchaser. We fulfill the quality, yet lowerpriced, niche market. Our machines cost fifty-percent (50%) less than the price of an entry level 

manufacturing CNC machine. With prices starting at under $10,000.00, a purchase can be justified 

as for occasional (i.e., as opposed to continuous) use. Our machines are compact and require singlephase voltage (i.e., electricity) so they can be delivered and installed in non-traditional manufacturing 

locations, such as business parks, garages, homes, and office buildings.

Our machines are designed for end-user assembly and service; they do not require a skilled 

technician to install or repair. They are supported through phone and e-mail by our skilled technical 

support team of machinists and machine tool engineers. Our machines are modular in design and 

expandable over time, so our customers’ investments can grow as their businesses grow and needs 

require.

Tormach simply cannot absorb the additional 25-percent tariff. If this 25-percent tariff 

remains, Tormach will be required to pass on any increased costs directly onto our customers. This 
increased cost will be felt by micro purchasers and small and medium size businesses across the 

United States that rely on our machines to meet their particular business needs. If we increase our 

prices to offset the cost of an additional tariff, we will undoubtedly sell fewer machines and may be 

forced to lay off our U.S. employees. Moreover, we will be less able to meet our customers’ needs 

because we will not have the necessary capital for our planned R&D expenditures for designing and 

improving new and existing equipment.

c. This product is not strategically important to “Made in China 2025” or 

other Chinese industrial programs.

Tormach’s Milling Machines, classified under HTSUS subheading HTSUS 8459.61.0080, 

is not traditionally viewed as “cutting-edge” technology. These Milling Machines have been in 

existence for many years and are mature technologies. Indeed, these are commodity machines that 

have been products for over 40 years with little substantive design changes. Tormach’s Milling 

Machines do not contain any advanced components that are not readily available throughout 

China. The key technology component is the controller, which is integrated after the machinery 

arrives into the United States. 

Furthermore, the exclusion of this product will not help China’s attempts to become a 

global leader in the aerospace, rail way, machine tools and technology. The Chinese government’s 

acts, policies and practices did not deprive our Chinese suppliers of the ability to set market-based 

terms in licensing and other technology-related negotiations nor did it undermine our control over 

our technology in China. Finally, there have been no attempts to steal our technology, in part 

because it is not the “cutting edge” technology that would be of interest to the Chinese government 

or to Chinese companies. Tormach has never experienced a mandatory transfer of any intellectual 
property rights in China, and Tormach is not aware of any significant theft in China of its 

intellectual property rights. The Chinese government has not employed any tactics, such as 

discretionary or discriminatory administrative approval processes, joint venture requirements, 

foreign equity limitations, procurements or other mechanisms to regulate or intervene in 

Tormach’s operations in China. Finally, China has not required or pressured Tormach to transfer 

any technology or intellectual property to a Chinese company, nor did China use discriminatory 

licensing processes to transfer technologies from our company to China. 

VII. Conclusion

Tormach respectfully requests the U.S. Trade Representative to exclude Tormach’s Milling 

Machines specifically classified under HTSUS 8459.61.0080 from the list of products subject to 

the Section 301 25-percent tariff as described below:

Single phase, three-axis computer numerical control (“CNC”) milling machine tools, 

under 2000 pounds, with up to 10,000 RPM spindle speed, and spindle power less than 

3 horse power classified under HTSUS 8459.61.0080. 

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

his knowledge. 

Sincerely,

Daniel Rogge