The Therm-O-Disc competitive edge is based on both quality and cost value. The market for these types
of products Is extremely price sensitive and any price adjustments to our customers stands to adversely
affect our business and our market position. However, because we cannot pass on the costs to our
customers, we effectively take on a 25% cost increase which has a serlous impact our economic standing
and our ability to manufacture products In the U.S and employ Americans in valuable manufacturing,
technical, administrative, and research and development positions.

In addition to the severe economic harm noted above that these tariffs would cause to Therm-O-Disc,
the following other factors were noted by the USTR as factors that it considers when deciding whether
to grant an exclusion for a particular product from Section 301 tariffs:

1. Limited availability outside China.

The strength of our market position is based on product quality, reliability, and service. We have
sourced and worked very diligently with our Chinese suppliers to manufacture products that meet
specific resistance temperature curves, tolerances, moisture resistance, insulated leads, and stability.
These are characteristic of our products which separate us from our competition.

In recent years we have performed strategic searches for suppliers in other countries as a means of
supplier risk mitigation. Unfortunately, we have been unable to identify a supplier outside of China that
can provide the thermistor product requirements needed here. It is our belief that it will take years to
develop a capable domestic or non-China supplier that can meet the specifications required for this type
of product. Currently, no known supplier Is qualified and equipped to provide these products with the
same specifications, quality, and accuracy as those provided by our current Chinese supplier.
Furthermore, the majority of the world’s supply of this type of component resides In China. In all
likelihood this tariff will require a re-design of the 20) product family which would take years. After an
alternate supplier is developed the customers would require 12-18 months of additional development
to qualify a new supplier.

2. Not strategically important to Chinese industrial programs including “Made in China 2025”.

The Made in China 2025 plan highlights 10 priority sectors: 1) New advanced information technology; 2)
Automated machine tools & robotics; 3) Aerospace and aeronautical equipment; 4) Maritime equipment
and high-tech shipping; 5) Modern rail transport equipment; 6) New-energy vehicles and equipment; 7)
Power equipment; 8) Agricultural equipment; 9) New materials; and 10) Blopharma and advanced
medical products (Scott Kennedy, Deputy Director, Freeman Chair in China Studies, and Director, Project
on Chinese Business and Political Economy, Center for Strategic and International Studies, June 1, 2105).
This NTC temperature sensor technology (thermistor) was developed in the 1930’s and does not fall into
any one of these categories and therefore is not important to Chinese industrial programs included
Made in China 2025.

3. Puts our America manufacturing and administrative jobs in jeopardy.

Finally, these products help increase U.S. commerce by complementing and completing our product line
which allows us to offer a full-range of products domestically and for exporting throughout the world.
Without these temperature sensors, we would not be able to provide a full-range of sensing products
required by our customers. To that extent, the tariff threatens our supply of U.S.-manufactured
products to our customers. In other words, these tariffs jeopardize our manufacturing operations and



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October 09, 2018

Office of the United States Trade Representative
600 17th Street NW

Washington, DC 20508

USA

Re: 20) Negative Temperature Coefficient (NTC) Temperature Sensor (8533.40.8070) Section 301
Exclusion Request

To Whom It May Concern;

Therm-O-Disc, inc. a subsidiary of Emerson Electric Company respectfully requests the exclusion of its
product under HTS 8533.40.8070 from Section 301 Tariffs. As detailed below, this additional 25% duty
will have a significant impact to our company’s financial well-being and ability to remain competitive in
the marketplace. Sourcing the same product domestically or from a non-Chinese manufacturer has
proven to be unlikely.

Therm-O-Disc was founded in 1947 in Mansfield, Ohio. As a leading US manufacturer of sensing and
control solutions, we have a global reach and are a trusted resource for reliable, high-quality products.

More specifically, we seek an exclusion for NTC temperature sensors, 8533.40.8070, Although this
product is manufactured In Mexico, the variable resistor within the finished product Is manufactured in
China. There currently Is no alternate source approved for use for the variable resistors manufactured
in China.

Imports of these products from Mexico for the last 3 calendar years are as follows:

BC

ITC temperature sensors utilize temperature sensitive variable resistor technology which Include N
thermistors, molded components, and may also include lead wire harnesses and connector assemblies.
The variable resistor is made with a special formula of metal oxides, and is packaged in a sensor body
custom designed for the end application environment.

Key product attributes:
e NTC Thermistor (variable resistor)
* May contain lead wire and/or connector assembly
« Aluminum or plastic shell

Illustrations of our typical 20) NTC temperature sensor are In the attached Appendix.



business unit management In the U.S. because we would not be able to offer the complete, high, and
low-end product-line that our customers have come to expect and demand.

This artificially creates a competitive advantage for foreign competitors who produce parts overseas in
countries other than China (i.e. Indonesia) over Emerson, a US company who manufactures many of
these products in the Americas.

Therefore, for the reasons noted above, we ask that the USTR exclude the abovementioned product
classified under HTS 8533.40.8070 from the Section 301 tariff schedules. Please feel free to contact us
with any questions.

Regards,
Dave Stebnicki

General Manager, Temperature Sensors
Therm-O-Disc, Inc.



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4 3



“Section 301 Investigatio: 1: 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.

Indicate whether the comment contains business confidential information (BCI), is a public
document, or is a public version of a BCI document.

Public Version of BCI

pat pte aeatrarensinnnrnmeensiany

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

INTC temperature sensors utilize temperature sensitive variable resistor technology which include NTC thermistors,
molded components, and may also include lead wire harnesses and connector assemblies. The variable resistor is
made with a special formula of metal oxides, and is packaged in a sensor body custom designed for the end
application environment.

Key product attributes:

NTC Thermistor (variable resistor)

May contain lead wire and/or connector assembly
Aluminum or plastic shell

3.  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/

8533408070

4, Requestor Information

Requestor Name (Last, First): [Stebnicki, Dave ]

Organization Name: [Therm-O-Disc, Inc. ]

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

Requestor Representative: [ ]

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 BCI

VERSION 2 CONTINUED BELOW 1



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8. Is this product, or a comparable product, available from sources in the United States? (If you
indicate "NO", you must provide support for your assertion in Box 12).

9. Is this product, or a comparable product, available from sources in third countries? (If you
indicate "NO", you must provide support for your assertion in Box 12).

NO

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: [BC] 2017 Quantity: [BC]
2016 Value: [BC] 2016 Quantity: [BC]
2015 Value: [BC] 2015 Quantity: [BC]

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

INPUT
a) For imports sold as final products, please provide:
% of your total gross sales in 2017 that the Chinese-origin product accounted for.

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

[BC] % of the total cost of producing the final product(s) the Chinese-origin input
accounts for.
[BC] % of your total gross sales in 2017 that sales of the final product(s) incorporating

the input accounted for.

VERSION 2 CONTINUED BELOW



12. Please provide information in support your request, taking account of the
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).

in addition to the severe economic harm noted above that these tariffs would cause to Therm-O-Disc, the following
other factors were noted by the USTR as factors that it considers when deciding whether to grant an exclusion for a
particular product from Section 301 tariffs:

Limited availability outside China.

The strength of our market position is based on product quality, reliability, and service. We have sourced and worked
very diligently with our Chinese suppliers to manufacture products that meet specific resistance temperature curves,
tolerances, moisture resistance, insulated leads, and stability. These are characteristic of our products which separat
lus from our competition.

In recent years we have performed strategic searches for suppliers in other countries as a means of supplier risk
mitigation. Unfortunately, we have been unable to identify a supplier outside of China that can provide the thermistor
product requirements needed here. It is our belief that it will take years to develop a capable domestic or non-China
supplier that can meet the specifications required for this type of product. Currently, no known supplier is qualified
land equipped to provide these products with the same specifications, quality, and accuracy as those provided by our
current Chinese supplier. Furthermore, the majority of the world’s supply of this type of component resides in China.
In all likelihood this tariff will require a re-design of the 20J product family which would take years. After an alternate
supplier Is developed the customers would require 12-18 months of additional development to qualify a new supplier.

Not strategically important to Chinese industrial programs including “Made in China 2025”.

The Made in China 2025 plan highlights 10 priority sectors: 1) New advanced information technology; 2) Automated
machine tools & robotics; 3) Aerospace and aeronautical equipment; 4) Maritime equipment and high-tech shipping;
5) Modern rail transport equipment; 6) New-energy vehicles and equipment; 7) Power equipment; 8) Agricultural
equipment; 9) New materials; and 10) Biopharma and advanced medical products (Scott Kennedy, Deputy Director,
Freeman Chair in China Studies, and Director, Project on Chinese Business and Political Economy, Center for
‘Strategic and International Studies, June 1, 2105). This NTC temperature sensor technology (thermistor) was
developed in the 1930's and does not fall into any one of these categories and therefore is not important to Chinese
industrial programs included Made in China 2025.

Puts our America manufacturing and administrative jobs in jeopardy.

Finally, these products help increase U.S. commerce by complementing and completing our product line which allowg
lus to offer a full-range of products domestically and for exporting throughout the world. Without these temperature
sensors, we would not be able to provide a full-range of sensing products required by our customers. To that extent,
ithe tariff threatens our supply of U.S.-manufactured products to our customers. In other words, these tariffs
jeopardize our manufacturing operations and business unit management in the U.S. because we would not be able tq
offer the complete, high, and low-end product-line that our customers have come to expect and demand.

This artificially creates a competitive advantage for foreign competitors who produce parts overseas in countries othet
than China (i.e. Indonesia) over Emerson, a US company who manufactures many of these products in the Americas;

[The submission contains business confidential information, indicated by brackets, consisting of commercial and
financial information of Emerson the disclosure of which is not authorized. We hereby certify that this information is
business confidential and would not customarily be released to the public by Emerson. Based on the foregoing, we
hereby request that the U.S. Trade Representative and Customs and Border Production exempt from public
inspection and public disclosure all such business confidential information contained in this submission. A public
version of this submission is being simultaneously filed with this submission.

VERSION 2 END 3