N85 W12545 Westbrook Crossing • Menomonee Falls, WI 53051

_________________________________________________________________________________________________________________________

October 5, 2018 

Submitted via regulations.gov

Ambassador Robert E. Lighthizer

U.S. Trade Representative

Office of the U.S. Trade Representative

600 17th Street NW

Washington, DC 20508

RE: Request 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)

Dear Ambassador Lighthizer:

ECM Industries LLC (“ECM”) hereby submits this request to exclude items under the 

Harmonized Tariff Schedule of the United States (“HTS”) subheading 8536.90.4000 from the 

additional ad valorem duty of 25 percent on approximately $34 billion worth of Chinese 

imports.79

ECM is a small business with a long history of manufacturing and supplying electrical 

components and products for the construction, industrial power, and transportation markets. We 

are headquartered in Menomonee Falls, Wisconsin, and have a global presence with six locations 

across the U.S., Mexico, and China. Our legacy dates back to 1959 with the founding of Gardner 

Bender, one of our leading brands. Since then, we have built a world-class organization.

ECM employs 350 employees worldwide, of which 320 are based in the U.S. Our company is 

one of the U.S.’s preeminent suppliers of innovative and niche electrical products and systems 

and we are dedicated to providing our customers with solutions for their electrical applications. 

From lighting a commercial building to remodeling a home to providing the electrical 

connections that stand up to the harshest outdoor environments, the brands of ECM Industries 

provide the right solution for the most demanding applications.

 

79 Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to\

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

Innovation, 83 Fed. Reg. 28710 (Jun. 20, 2018). 
2

I. Product Description

We request that USTR exclude the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master that is imported 

under HTS subheading 8536.90.4000. 

Item: #HSB-28, Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master

HTS subheading: 8536.90.4000

Item Description: Electrical terminals, made of plastic and metal components. These terminals 

are attached to electrical wire in order to provide the means for an electrical connection.

Material(s): Made of plastic and metal components

Item Size (inches H x W x D): 3.2x5.1x7.9

Item Weight (ounces): 9.40

II. ECM Cannot Source the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master From 

Countries Outside Of China. 

The Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master and comparable products are not available in 

the U.S. or countries outside of China. While we have explored the possibility of sourcing these 

products from other countries, there are no alternative manufacturers of the Butt Splice Kit 2-8 

Awg; 1/Cd 5Cds/Master. 

Shifting to a non-Chinese source for the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master is not a 

viable option at this time. Global supply chains are extremely complex and it can take years to 

find the right partners who can meet the proper criteria and our produce the Butt Splice Kit 2-8 

Awg; 1/Cd 5Cds/Master at the scale and cost that is needed. The Butt Splice Kit 2-8 Awg; 1/Cd 

5Cds/Master is designed and packaged to our unique specifications and we have been working 

with our Chinese vendors for over 20 years to ensure that the Butt Splice Kit 2-8 Awg; 1/Cd 

5Cds/Master meets the high quality standards we expect. We have invested millions of dollars in 

tooling, training, and employ nearly 20 people in Shanghai who oversee and manage our supplier 

base. It is nearly impossible for us to develop similar relationships and supply chains in the near 

term to make this product.

We have explored the possibility of sourcing the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master

from other countries. This is extremely impractical given the prohibitive cost disadvantages of 

other countries such as labor and raw material costs. Several of our Chinese suppliers have even 

looked to move their factories to countries outside of China to remain in business and continue to 

support customers such as us. However, this relocation will not happen in the near term to help 

provide tariff relief. 

Additionally, there are few viable U.S.-based sources that manufacture the Butt Splice Kit 2-8 

Awg; 1/Cd 5Cds/Master. We believe that developing the necessary manufacturing capacity 

within America is technically and economically infeasible in the short term to meet our 

customers’ demand requirements. Based on our understanding, the U.S. suppliers of Butt Splice 

Kit 2-8 Awg; 1/Cd 5Cds/Master also import products or components from Chinese suppliers 

and then add some limited value through additional manufacturing here in the U.S. Because of 

this Chinese reliance, these suppliers have already demanded 25 percent price increase for this 
3

product. Because of this we have already run into difficulties on guaranteeing supply on the Butt 

Splice Kit 2-8 Awg; 1/Cd 5Cds/Master. 

III. The Imposition of this Duty on the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master 

Has a Significant Impact on ECM’s Business, Resulting in a Significant Profit 

Loss and Reduction of ECM’s Workforce. 

As you can tell from the below information, we import a significant amount of the Butt Splice 

Kit 2-8 Awg; 1/Cd 5Cds/Master from China and imposition of this duty will negatively impact 

our business. 

Year Value (dollars) Quantity

2015 [ [

2016 [ [

2017 [ [

The proposed duty on the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master would cost ECM 

thousands of dollars in increased duties. The cumulative impact of the list 1 Section 301 tariffs 

would cost ECM millions of dollars in increased duties. These additional unexpected costs for 

our small business are layered on top of the detrimental impacts from the Section 301 tariffs 

imposed on our products on lists 1 and 2 and those proposed for list 3 that total over $5.9

million. Overall, these tariffs cripple ECM, forcing ECM to reduce its workforce in the U.S. to 

afford these tariffs. 

Additionally, applying this tariff on the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master will have a 

significant impact on ECM’s customers. ECM has thousands of customers, with more than 95 

percent based in the U.S. Our customers are predominantly U.S. distributors, retailers, and 

manufacturers that distribute or use our products in electrical construction, maintenance, and 

repair applications. Because of the competitive nature of our business, and the fact we deal with 

many power buyers such as big box stores, we cannot recover the costs of the tariff on Butt 

Splice Kit 2-8 Awg; 1/Cd 5Cds/Master by passing it along to our customers as they are 

extremely price sensitive and will look for an alternative supplier. Imposing this tariff on our 

product would cause substantial downstream injury to those industries as well, which would 

eventually trickle down to the U.S. consumer. 

This ad valorem tariff on the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master places our company 

between a rock and a hard place. If we try and pass the full amount of the duty on to our 

customers, we run the risk of losing our contracts with major customers, and with that millions of 

dollars of sales and profits. The alternative is not a good one, and that means reducing our 

workforce in the U.S. in order to absorb the costs of this tariff. We have been a healthy and 

growing business and have not laid anyone off in over five years; in fact we have been hiring. 

As of July 6, 2018, we have implemented a hiring freeze and are only replacing critical positions 

as a result of attrition. Because of the cumulative impact of these tariffs, we will be forced to 

reduce our headcount by 50 to 60 people in order to offset the costs to our bottom line. 
4

When the tariff on Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master can be passed on, we expect 

most of the impact will be felt by consumers and contractors who buy and use HSB-28 in 

electrical installation and repair and remodel projects, which will ultimately have an impact on 

the cost of construction projects. In fact, a significant portion of the product is purchased by 

consumers directly at most leading retailers and hardware chains across the country.

Instead of impacting China’s manufacturing industry, the tariff on the Butt Splice Kit 2-8 Awg; 

1/Cd 5Cds/Master will significantly harm ECM and our customers here in the U.S.

IV. Imposing the Ad Valorem Tariff under Section 301 on the Butt Splice Kit 2-8 

Awg; 1/Cd 5Cds/Master Will Not Be Effective in Eliminating China’s Predatory 

Acts. 

USTR’s Section 301 report found that various policies and practices of the Chinese government 

are designed to promote Chinese companies as leaders in supplying certain advanced 

technologies around the world and to reduce imports of these technologies that Chinese 

industries rely upon. According to USTR and the White House’s Office of Trade and 

Manufacturing policy, China has participated in physical and cyber-enabled theft of 

technologies, required technology transfer for market access, and investment restrictions, among 

other coercive and intrusive restrictions that harm American intellectual property rights, 

innovation, and technology development.80

According to the various Section 301 reports, the technologies that China targets through its 

policies are advanced technologies in the following industries: (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.81

Notably, the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master and its manufacture are not among the 

list of advanced technologies or industries that are targeted by the Chinese government policies.

The Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master has been on the market for many years and 

does not contain sensitive technology or intellectual property that is the target of China’s 

practices. In fact, ECM has been sourcing the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master from 

China since the 1990’s and has not experienced these challenges. To the contrary, ECM has 

enjoyed a constructive relationship with its Chinese suppliers and has not encountered any of the 

intellectual property theft, cyber theft, or other technology-related compilations that advanced 

technology industries have faced. 

 

80 USTR, 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 1–2 (Mar. 22, 2018) [hereinafter 

Section 301 Findings]; Office of Trace and Manufacturing Policy, Executive Office of the President, How China’s 

Economic Aggression Threatens the Technologies and Intellectual Property of the United States and World (Jun. 

2018) [hereinafter China’s Economic Aggression].

81 Section 301 Findings, at 14. 
5

In sum, our importation of the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master from China is not 

linked to any purportedly unfair practices. Imposing punitive tariffs on our imports would only 

harm our small business and the U.S. customers we serve without advancing the stated objectives

of the Section 301 proceeding.

* * *

ECM appreciates the opportunity to request this exemption from the Section 301 tariffs. While 

we understand and support the motivation for fair trade policies and a level playing field, we 

respectfully request that the Butt Splice Kit 2-8 Awg; 1/Cd 5Cds/Master imported from China 

under HTS subheading 8536.90.4000 be exempt from the additional 25 percent ad valorem duty 

because it will not accomplish the desired purpose and will have a significant detrimental impact

on ECM, the businesses we supply, and U.S. consumers.

Respectfully submitted, 

David Scheer

Chief Executive Officer

ECM Industries LLC