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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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10-digit HTSUS item number* for product you wish to address in this product exclusion request:

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

1

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VERSION 1

Requestor Information

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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 

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PUBLIC VERSION

Submitted Via WWW.Regulations.Gov

October 9, 2018

Ambassador Robert Lighthizer, U.S. Trade Representative

Office of the United States Trade Representative

600 17th Street NW, Room F516

Washington, DC 20508-0001

RE: USTR 2018-0025; Request for Exclusion From the Determination of Action Pursuant 

to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, 

Intellectual Property, and Innovation Tariff Under Harmonized Tariff Code 

(HTS) 8413.70.2004

Dear Sir,

This request for exclusion is submitted pursuant to Federal Register notice published on July 11, 

20181, establishing the process to submit exclusion requests from tariffs applied to U.S. imports 

according to the Determination of Action Pursuant to Section 301 of the Trade Act of 1974: China's 

Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation. 

We hereby respectfully request that the wall water fountains imported by HoMedics USA LLC 

(HoMedics or the Company), under HTS code 8413.70.2004 be excluded from the additional 25% 

tariff imposed on this HTS code pursuant to Section 301.

Explained below are the reasons why the wall water fountains meet the elements in the Federal 

Register notice to be excluded from the additional tariff under Section 301.

1. Distinguished from other products in the 8 digit HTS code

The subject water fountains are classified under HTS 8413.70.2004, "Other centrifugal pumps; 

Other; Submersible pumps." The 8 digit code is only for "Other centrifugal pumps; Other.” 

Accordingly, the subject water fountains, models 17FM-W910CQ and 17FM-W910TN, differ from 

other water fountains in this general 8 digit classification as these fountain pumps are

submersible. These models are identical in dimensions, material composition, and functionality. 

They also have identical components. The products are square-shaped, decorative water 

fountains specifically designed to be mounted on a wall. The products feature a durable electrical 

water pump that must be submerged to function properly and measure 12.45”L x 5.85”W x

26.60”H. The products feature a framed collection basin with water cascading down a ridged 

background. The products are mainly intended for residential use. They are powered by a durable 

electrical water pump that must be submerged to function properly. The products are further 

distinguished from the 8 digit tariff description, as their unique design mimics cascading waters 

and evokes a relaxing ambience. See Attachment A for a depiction of the lead model of the wall

water fountains.

2. Severe economic burden to HoMedics and U.S. interests

These water fountains represent a profitable product line [ ]. To levy this large of an additional 

cost to the water fountain product models the Company will shortly be importing translates to a

 

1 83 Fed. Reg. 32181 – 32184 (July 11, 2018).
PUBLIC VERSION

Page 2

substantial additional cost to HoMedics in material purchases on Chinese manufactured water 

fountains. This amount of additional spend on these imported products would drastically reduce 

HoMedics’ net income on the entire product offering for the entire period the tariffs are in effect. 

Even so, this future imported value represents an insignificant amount of the $50 billion in 

imported goods from China that the Section 301 tariffs are intended to address. Further, the 

additional tariffs would severely curtail the Company’s ability to develop new products, source 

new customers, and maintain existing large volume customers. Eventually this would lead to 

reduction of the Company’s [ ] and reduction in its overall company footprint to offset the tariff 

impact. A truly “American made” company would suffer due to imposition of the additional tariffs.

3. Impact of Changing Sourcing to HoMedics

As provided in the attached exclusion request form, similar water fountains can be sourced from 

the U.S. and other third countries such as South Korea, Thailand and Malaysia. However, there 

is a downtime and extreme additional monetary and resource cost in moving sourcing to suppliers 

in other countries. Primarily, the base cost of obtaining the water fountains from the new supplier 

will be an increased price relative to that HoMedics currently pays to its established supplier. In 

addition to this detrimental impact to the Company’s bottom line, it would take HoMedics 

approximately [ ] to be able to institute a sourcing change. During this time, the Company would 

be required to pay the additional 25% tariff under Section 301 while working towards initiating and 

negotiating new supplier relationships. Further, achieving the goal of cementing new supplier 

relationships requires an additional expenditure of approximately [ ]. This expense would be an

incremental cost over the additional tariff duties, and in addition to the higher price paid to the 

new suppliers to source the product models.

There are other impediments and obstacles beyond these increased base costs to obtaining 

alternate sourcing of the products. The suppliers HoMedics currently source from are certified in 

U.S. Customs and Border Protection’s CTPAT program (Customs Trade Partnership Against 

Terrorism), which is a key selling point to HoMedics and the companies it sells to. HoMedics 

would require that its new suppliers also be CTPAT certified, which is an additional burden in 

terms of cost, timing and resources from different departments to achieve that change. While 

HoMedics seeks to find new suppliers and obtain CTPAT certification for them, the Company 

could potentially lose customers during the changeover. Further, in addition to the additional time 

spent in reviewing new suppliers and negotiating new contracts, HoMedics would spend 

additional time and internal resources on conducting internal compliance audits with its new 

vendors to ensure they are adhering to the Company’s strict quality assurance protocols and 

internal compliance controls. The monetary impact of the additional resources spent is difficult to 

quantify but places an additional burden on current U.S. employees for extended lengths of time 

and thus impairs the HoMedics model of productivity and efficiency to ensure the continued 

growth of this American company.

4. Relevance to “Made in China 2025” program

The water fountains manufactured by the Chinese factories are made according to longstanding, 

public knowledge and experience in this industry area. Accordingly, there is no forced transfer of
PUBLIC VERSION

Page 3

technology, which transfer is the focus of the Section 301 tariffs as discussed in the Section 301 

report from the USTR.2. 

Additionally, the residential water fountain industry is not an advanced manufacturing area. The 

water fountains are not one of the ten industries which are the focus of the “2025” program. 

Rather, these industries include:

(1) advanced information technology; (2) robotics and automated machine tools;

(3) aircraft and aircraft components; (4) maritime vessels and marine engineering equipment; (5) 

advanced rail equipment; (6) new energy vehicles; (7) electrical generation and transmission

equipment; (8) agricultural machinery and equipment; (9) new materials; and (10)

pharmaceuticals and advanced medical devices.

There is accordingly no direct link between these relatively low volume imports of water fountains, 

and the goals of the Section 301 tariffs to address the targeted industries in the “China 2025” 

program. 

Additionally, there is no joint venture between HoMedics and its Chinese suppliers. HoMedics’

business relationship is not subject to any Chinese administrative policies which require the 

transfer of any U.S. intellectual property in any manner. Thus, penalizing a U.S. company where 

U.S. intellectual rights are not at risk by forcing it to pay additional duties does not further the U.S. 

government’s policy regarding the “Made in China” initiative. In fact, the relationship between the 

Section 301 tariff goals and the actual impact in this instance is nonexistent. Applying the Section 

301 tariff to the imports of the water fountains by HoMedics does not serve the purpose of the 

Section 301 goals but in fact contravenes the goals.

In light of the above, HoMedics sincerely requests that its water fountain models 17FM-W910CQ 

and 17FM-W910TN be granted an exclusion of the 25% Section 301 tariff. Importation of these

product models does not undermine the U.S. government policy toward the “Made in China 2025” 

program and would only be detrimental to the economic viability of this moderate sized U.S. 

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

his or her knowledge.

Sincerely,

Adrienne Braumiller, Esq.

Trade Counsel for HoMedics USA LLC

 

2 United States Officer of the Trade Representative “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”, (Mar. 22, 2018); also found at: 

https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF. 
Attachment A