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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. 

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correct to the best of your knowledge. 

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

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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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PARKER HANNIFIN CORP 2018

October 9, 2018

The Honorable Robert E. Lighthizer

United States Trade Representative

Office of the United States Trade Representative

600 17th Street Northwest

Washington, D.C. 20508

Subject: Docket Number USTR-2018-0025

Request 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

Dear Ambassador Lighthizer:

Parker Hannifin (“Parker”) appreciates the opportunity to present this request for a 

product specific exclusion from the 25-percent additional tariff on certain imports from 

China pursuant to your findings of the Investigation into China’s Acts, Policies, and Practices 

Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of 

the Trade Act of 1974. Specifically, we request that the following product not be subject to 

the 25-percent ad valorem duty:
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

Page 2

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PARKER HANNIFIN CORP 2018

Product Name HTS Number 

(10-digit)

Product Description1

Hydraulic Fluid Power 

Pump Thrust Plates

8413.91.9050 Cast metal housing for gears and 

thrust plates within a rotary hydraulic 

gear pump (provided for in 

subheading 8413.91.9050).

Figure 1 – Pump Thrust Plates

Pump Thrust Plates are inside the assembly and are designed to house seals that push the 

plate against gears and prevent oil from slipping past. Hydraulic fluid power Pump Thrust 

Plates are component parts imported by Parker as intermediate goods and incorporated into a 

finished product assembled in the United States. Approximately 70% of hydraulic fluid 

power Pump Thrust Plates made by Parker in China are components that go into assemblies 

made in the U.S. Hydraulic pumps are used in a broad range of industries - every hydraulic 

system needs a pump. Whether your application is industrial manufacturing, mobile 

construction, truck, agricultural equipment, or marine work, it needs a pump to supply flow 

and meet application work requirements.

 

1 See Annex 1 for a sample product (for reference only).
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

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PARKER HANNIFIN CORP 2018

This product should not be subject to the tariff increases for the following reasons. First, 

though highly commoditized, the Parker Pump Thrust Plates from China are also highly 

engineered, with specialized parts and close tolerances, built to strict specifications and 

performance criteria. In other words, it would be impracticable – from both a cost and timing 

standpoint - to move production elsewhere. Second, imposing the tariffs will have severe 

negative impact on the company’s manufacturing operations in the United States, 

Specifically, it will affect Parker’s ability to continue manufacturing in the U.S. and investing 

in U.S. manufacturing at the current level. Finally, the technology used to manufacture the 

product has been present in China for decades and presents no interest for the Chinese 

government.2

Parker Hannifin – Company background

Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For 100

years the company has engineered the success of its customers in a wide range of

diversified industrial and aerospace markets. Parker’s engineering expertise and broad range

of core technologies uniquely positions the company to help solve the world’s greatest

engineering challenges.

Parker employs some 30,000 people in some 345 locations across the United States. Some

400 are employed in assembly jobs at the Gear Pump Division located in Kings Mountain, 

NC. These jobs would be directly affected by tariffs on thrust plates. Parker also provide 

indirect employment across a range of ancillary services: Freight carriers, janitorial services, 

preventive maintenance, uniform services, fluid management, first aid and emergency 

 

2 Please see Annex 2 for information regarding quantity of value of these imported goods over the past three 

years, as required by Docket Number USTR-2018-0025.
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

Page 4

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PARKER HANNIFIN CORP 2018

lighting, waste removal, metal recycling, cardboard recycling, wood recycling, landscapers, 

security. 

Discussion

We believe that this product should be excluded from the Section 301 duties for the 

following reasons:

2. Hydraulic fluid power Pump Thrust Plates are not made in the United States at the 

necessary price point and supply is restricted outside of China. 

As referenced above, while this product may be considered a commodity product it is 

in fact highly engineered with specialized materials and close tolerances, built to strict 

specifications and performance criteria. While Parker does source similar product from two 

other countries – Czech Republic and South Korea – those sources are already less 

competitive because of higher unit prices. Moreover, it is not clear whether they would be 

capable or even willing to produce sufficient quantities to be able to supplant current Chinese 

production. Foundries are in high demand and they prefer to dedicate their resources to 

products with higher margins than thrust plates. Further research would be required to 

identify other sources. There is no known foundry in India, Taiwan or Vietnam - for 

example - which would be qualified to produce the product. Additional research would be 

costly and time consuming. In any case, resourcing these products will take 3 – 4 years of 

effort for requalifying and establishing quality and delivery elsewhere. In the meantime, 

quality engineers, product engineers, supply chain professionals, project managers and lab 

inspection assets would be required to take on such a task which would put the remainder of 

the business at risk.

As for sourcing from the U.S., there are only a few American foundries and many 

lack capacity. U.S. capacity is constrained by two factors: first is capital equipment and 

manufacturing square footage. Lead time on new equipment keeps going up and often 
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

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PARKER HANNIFIN CORP 2018

suppliers amortize their depreciation costs into the piece price which makes them even more 

non-competitive. The second constraint is the inability to hire, train and retain qualified 

workers. Parker is already experiencing late deliveries from several U.S. suppliers due to 

this reason which has forced Parker to source from the Far East. Finally, there is the price 

component. While there are several U.S. based suppliers available, their pricing is simply 

not competitive with the target prices customers expect. It would cost as much to move 

product to the U.S. as it would to pay the tariff. 

3. Tariffs will cause considerable harm to Parker’s business without commensurate benefits 

to related American industries.

The tariff will increase the price which in turn will force customers to seek alternatives. 

Most of the competition manufactures product outside the US, including China. Material 

content is the largest cost our product has, as tariffs rise, Parker has to pass along a portion to 

our customers to help cover our increased costs. This means higher costs for them and 

possibly even higher costs as they may be forced to find alternate suppliers which means 

design and engineering work to replace our highly engineered pumps and motors.

The impact is difficult to quantify since the effect on sales is unknown but typically increased 

costs don’t help business. As the profit line is squeezed, the opportunity for increased capital 

investment or the addition of new employees becomes more and more constrained. 

Employee layoffs will likely be the result of lost business due to increased costs pricing 

Parker out of the market and/or reduced demand due to higher prices.
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

Page 6

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PARKER HANNIFIN CORP 2018

4. Hydraulic fluid power Pump Thrust Plates are made with widely-used technology which 

is not contemplated for acquisition by the Chinese government, as evidenced by the “Made in 

China 2025” report. 

Although Parker pumps are a highly-engineered product, as mentioned above, there are many 

other competitor products on the market - and, in particular, Pump Thrust Plates suppliers -

all of which are made in low-cost countries, including China. In fact, similar products have 

been available in the Chinese market for decades. There is, therefore, no need to use illegal 

means to acquire the technology used to make this product. Moreover, given the age of the 

product and its low cost, there is no incentive for the Chinese government to acquire this 

product. It is not in any of the areas designated as “breakthrough” by the “Made in China 

2025” initiative.

Enforceability by Customs

A final note regarding enforceability – the U.S. Customs and Border Protection (CBP) will 

be able to effectively administer and enforce this provision due to the nomenclature 

delineated above and the ability through a simple visual review determine if the unit meets 

the exclusion request. In addition, Parker will ensure that its invoices reflect the specific 

terms of the nomenclature and maintain substantive and accessible records of import,

production and specification standards. Parker will cooperate with CBP with respect to any 

request for back-up documentation including requests to inspect the imported merchandise 

and/or the production facility in China.

Conclusion

The key here is understanding that specific pumps parts that are made in China are highly 

commoditized and are currently made in China to keep costs low to remain competitive. In 

short, if Parker were to make these specific pumps parts here in the United States, they would 
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

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PARKER HANNIFIN CORP 2018

have to sell the products at a loss or price themselves out of the market. Currently, although 

these particular pumps parts are made in China, they allow Parker to provide the assembly 

work to the 400 workers at its plan in Kings Mountain, NC. Moreover, there are dozens of 

jobs tied to bringing the gear pumps to market (customer service, engineering, sales, 

purchasing, logistics, quality, accounting, etc.). 

If Parker is forced to leave the market for these items it might also incentivize customers to 

look elsewhere for Parker’s higher-margin, U.S.-made pumps which are sold to larger 

Original Equipment Manufacturer (OE): many large OE customers purchase an entire 

“package” and assortment of pumps (a mix of unique and commoditized which enables them 

to have volume discounts). 
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

Page 8

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PARKER HANNIFIN CORP 2018

In short, losing commoditized products made in China could put Parker at risk of losing 

unique pumps that are currently made in the United States. Thus a 25-percent tariff would 

have an effect on Parker’s business that would be more widespread than just a tariff on 

imported goods from China. A 25 percent tariff on Pump Thrust Plates would severely limit 

Parker’s ability to provide goods and services to all its U.S. customers. We respectfully 

request that you exclude Cast metal housing for gears and thrust plates within a rotary 

hydraulic gear pump (provided for in subheading 8413.91.9050) from the list of products 

imported from China subject to Section 301 tariffs.3

Sincerely, 

_____________________

Craig Schau

Director, International Trade 

Parker Hannifin Corporation

 

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

knowledge.
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

Page 9

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PARKER HANNIFIN CORP 2018

ANNEX 1: SAMPLE PRODUCT (FOR REFERENCE ONLY)

Type Tariff Code (HTS) Picture Description

Hydraulic Fluid 

Power Pump 

Thrust Plates

8413.91.9050 Cast metal housing 

for gears and thrust 

plates within a 

rotary hydraulic 

gear pump 

(provided for in 

subheading 

8413.91.9050).
The Honorable Robert E. Lighthizer

United States Trade Representative

October 9, 2018

Page 10

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PARKER HANNIFIN CORP 2018

ANNEX 2: ANNUAL QUANTITY AND VALUE OF IMPORTS

Type Tariff Code 

(HTS)

Annual Quantity and Value

2015 

QTY

(est)

2015 

Import 

Value

(est)

2016 

QTY

(est)

2016 

Import 

Value

(est)

2017 QTY 

(est)

2017 

Import 

Value 

(est)

Thrust Plates 8413.91.9050 [...] [...] [...] [...] [...] [...]