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:
llaHAIRE 

October 5, 2018 

Ambassador Robert Lighthizer 

U.S. Trade Representative 

600 17th St., N.W. 

Washington, DC 20508 

RELATIDNSHIP·DRIVEN SUPPORT AND SALES 

800.348.8!104 I 3019 E. 84TH PLACE, MERRILLVILLE, IN 48410 

HAIREliRDUP.CDM 

PUBLIC VERSION OF BUSINESS CONFIDENTIAL 

RE: Request for Particular Product Exclusion 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: 

Tom Haire Inc. is submitting these written comments in response to Docket No. 

USTR-2018-0025, : Request for Particular Product Exclusion from the Determination of 

Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology 

Transfer, Intellectual Property and Innovation. 

I certify that disclosure of the information noted in the attached submission as "Business 

Confidential" would endanger trade secrets or profitability to the companies and that such 

information would not customarily be released to the public. 

We are submitting a business confidential and a public version of our comments. The 

public version includes brackets where business confidential information has been redacted. 

If you have any questions, please feel free to contact me at (800) 348-8904 or via email at 

hpasso@hairegroup.com 

Respectfully submitted, 

Herbert H. Passo/President 

Tom Haire, Inc. & Haire Machine Corporation 

1 
�HAIRE 

October 5, 2018 

RELATIONSHIP-DRIVEN SUPPORT AND SALES 

800.348.8904 I 3019 E. 84TH PLACE, MERRILLVILLE, IN 4&-410 

HAIRE&ROUP.CDM 

PUBLIC VERSION OF BUSINESS CONFIDENTIAL 

Ambassador Robert Lighthizer 

U.S. Trade Representative 

600 17th St., N.W. 

Washington, DC 20508 

RE: Request for Particular Product Exclusion from the Determination of Action Pursuant to 

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

Intellectual Property and Innovation: USTR-2018-0025-0001 

Product Specific Exclusion for HTS 8441.30.0000 

Dear Ambassador Lighthizer: 

On behalf of Tom Haire, Inc. and Haire Machine Corporation, we hereby submit a request for the 

exclusion of particular products in response to USTR-2018-0025 from the determination of action 

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

Intellectual Property, and Innovation. Specifically, Haire submits that imposing increased duties 

on the items discussed below will not be practicable or effective in obtaining the elimination of 

China's acts, policies or practices. We further submit that maintaining or imposing the proposed 

additional duties on this product will cause disproportionate economic harm to U.S. interests, 

unduly harm our small privately held business, including our U.S. manufacturing partners, and 

many other small and medium sized businesses. 

Haire does not own the plants in China that manufactures these machines. The plants are publicly 

traded Chinese businesses and are listed on the Shanghai Stock Exchange. As such, our supplier 

is not participating in any state involvement or state sanctioned IPR violations or trade secrets 

theft. Haire has never been restricted by the Chinese government at the companies which 

manufacture our corrugated making machines and parts. In fact, Haire is using Chinese technology 

to benefit U.S. companies in ways that help U.S. companies to be more profitable and address the 

surging ecommerce of micro and small companies. Haire has become the exclusive licensee of the 

Chinese manufacturer to sell and import these machines into the United States and North America. 

To our knowledge, the Chinese government did not employ any tactics, such as opaque and 

discretionary administrative approval processes, joint venture requirements, foreign equity 

limitations, procurements or other mechanisms to regulate or intervene in our providers in China. 

Further, China did not require or pressure us to transfer any technology or intellectual property 

because this technology is actually Chinese technology that we are expropriating to meet our needs 

in the U.S. market. 

2 
RELATIDNSHIP·DRIVEN SUPPORT AND BALES 

aaa.341.8904 I 3019 E. 84TH PLACE, MERRILLVILLE, IN 4&41D 

HAIREliRDUP.CDM 

We are not aware if the Chinese government's acts, policies and practices deprived our Chinese 

suppliers of the ability to set market-based terms in licensing and other technology-related 

negotiations. Because these machines are based on Chinese development and technology, there 

was no transfer of intellectual property or trade secrets to China. If anything, we are using 

their technology for the benefit of the United States. 

�HAIRE 

As you will see in photos included below, our products caught in the punitive tariff list of products 

are in no way a part of China's 2025 plan for acquiring technology or becoming a global provider. 

Our U.S. customers' operations rely on the machinery we provide and produce in China to 

facilitate and perform their business functions. We design the systems that integrate these products 

in the U.S. specifically for customers to better serve their growing ecommerce needs. The negative 

impact on the Chinese portion of our goods will have a direct and disproportionate impact on 

many, many U.S. companies. We are under a contract with the Chinese manufacturer and are 

therefore obligated for five years to purchase a specific number of machines. We do not have the 

option of alternative sourcing based on the contract. Further, these machines are capital 

investments, ranging from [approximately$ -$ per machine] in price. 

We also operate on a contract with U.S. companies who are investing this intensive capitol in their 

business thus, we are obligated by contract to provide the machines at the prices negotiated 8-12 

months prior to import. Therefore, the full brunt of the imposition of a 25% tariff will be borne 

by Haire. We are a very small company and may be put out of business if the tariff is levied on 

our products. 

Products at issue: 

The specific products for which Haire Inc. is seeking an exemption is as follows: 

HTSUS 8441.30.0000 Machinery for making cartons, boxes, cases or similar containers 

from corrugated paper, consisting of at least one of each of the following: feeding unit, 

printing unit, slotting and scoring unit, folding unit, and control system 

The specific machines in question are: machines for making corrugated cartons, boxes, cases and 

similar containers, not capable of making drums or tubes, and with a capacity to print letter or images, 

die cut the shape of the case or shipping box; and which may also include the ability to fold the box 

into its :finished shape, apply glue for sealing the box hinged flaps together, count and stack the 

pieces for bundling and shipping. 

3 
�HAIRE RELATIONSHIP-DRIVEN SUPPORT AND SALES 

BD0.348,8904 I 3019 E, 84TH PLACE, MERRILLVILLE, IN 46410 

HAIREliRDUP,CDM 

The machinery at issue is imported into the United States from China where it is used to 

manufacture corrugated paper cartons, boxes and cases. As you can imagine, the increase in online sales has dramatically increased the demand for more corrugated paper packaging. The 

machines are integral to servicing business and individual consumers in the US. 

Annual data: 

Haire sells 9-14+ Rotary Die Cutter machines per year approximately[$ -$ J per 

machine, including over the last 3 years, all imported from our Chinese supplier. 

Four-year sales: 

2015: [$ J Quantity [ J 

2016: [$ J Quantity [ J 

2017: [$ 1 Quantity [ J 

2018: ts 1 Quantity [ J 

Further we have[$ J under contract and yet to be delivered in 2019. We have no 

options to move or re-source these products. Because the machines are the IPR of the Chinese 

manufacturer we cannot take the business plans and reverse engineer in another country to make 

them. We would then be guilty of IPR violations and trade secrets theft. 

Enforceability: 

The product descriptions set forth above will provide the U.S. Customs and Border Protection with 

sufficient details to enable them to enforce this exclusion. CBP can examine the machines upon 

import and determine the applicability of the exclusion to the machines being transported. Further 

Haire will ensure that all documentation will support the written description above. The goods are 

shipped in multiple 40 foot containers and will be very easily distinguishable by a simple visual 

examination by the US CBP. 

4 
Overview of Haire: 

Tom Haire, Inc., and Haire Machine Corporation are privately held companies with only one 

location at 3019 East g4th Place, Merrillville, IN 46410. Haire employs 30 people in this small 

community: 15 sales/support staff, with an average salary $75-100 thousand per year and 15 

technical-technical service employees with an average salary at $75-125 thousand per year. Haire 

leases 45,000 square feet office and warehouse at our Indiana location. Because of the size of our 

facility, Haire contributes significantly to the small community through taxes. 

The company subcontracts to other U.S. firms for transportation, rigging, and installation, with an 

approximate cost of these services (all provided to our US customers) of $50-75 thousand per 

machine. 

There is a 6-9 month time horizon from ordering the product to delivery. These products are not 

strategically important, nor are they on the Made in China 2025 list (since it is already being made 

in China). The Chinese manufacturer of these products is unrelated to our business except via the 

mentioned sales and service contract. The manufacturer utilizes European technology for about 

15% of the value of this product, but all the rest of the intellectual property is Chinese owned and 

developed design. There is no IPR violations or trade secrets theft because the IPR is already 

Chinese. 

Negative impact on Haire 

The imposition of tariffs of 25% on our box making machines and parts is causing 

disproportionate economic harm to U.S. interests. Haire has a 5-year sales and service agreement 

with the Chinese manufacturer that provides the company with an exclusive sales territory for the 

United States and North America. Even if we wanted to shift production to another source as a 

result of these tariffs, we are obligated under the terms of this contract to continue purchasing and 

exporting the box machines. Thus, this tariff will have to be borne by not only HAIRE but passed 

on to the US Consumers. 

Over the 42 years that Haire has been in business, we have developed a good reputation 

among our customers. However, the corrugated paper box making industry is very competitive 

and a price sensitive industry. We are unlikely to be able to pass much of the increased cost from 

the tariff on to our customers. We estimate that our sales will suffer tremendously if our product 

is not excluded from the tariff and we project a revenue reduction of [30-50%], which will then 

lead to fa reduction in workforce and reduction in employee compensation]. This decline will 

force our company to reduce investment in the US. Since 2013 employment at our company has 

increased by nearly thirty percent, but, this tariff, will lead to a reversal in jobs with potential 

layoffs. Ultimately, this tariff could put us out of business. 

5 
Negative impact on U.S. Companies: 

Our U.S. buyers are using our machines to manufacture corrugated paper cartons, boxes, 

cases, displays and other corrugated paper items. Virtually all of the manufacturing of boxes 

and displays by these machines is done in the U.S. U.S. firms which utilize our products will 

lose choice of machinery options and will face reduced competition among suppliers, which may 

negatively affect the production of boxes within the U.S. These machines use corrugated paper 

that is produced in the United States as the stock for making the boxes. As a result, the U.S. 

production of corrugated paper boxes is at risk of moving to border nations such as Mexico and 

Canada for the capitol investment of the machines that do not face a 25% tariff. Further, the jobs 

related to making the actual boxes will move to the location of the tariff free countries ( eg. Mexico 

and Canada). 

Competing machines are made in the U.S. and other countries in Europe and Asia. Because this 

product is made in several countries other than the U.S., it is highly unlikely any U.S. manufacturer 

will benefit. Further, our competitors source from these U.S. manufacturers and we will be unable 

to buy "our" product from a producer making a machine that functions similarly. As mentioned 

previously, the IPR is Chinese. If we were to take the plans for these machines to any other country 

and have it reverse engineered, we would be guilty of IPR violations and trade secrets theft 

ourselves. We cannot participate in such unethical manufacturing operations. 

Putting a tariff only on China creates devastating harm to our Indiana based U.S. sales and service 

company in the middle of a 5-year sales and service contract-while having no impact on Chinese 

IPR issues, since the product is already designed and manufactured in China as has been the case 

for some time. 

Negative impact on consumers: 

Eventually, Haire will have to recoup losses incurred under current contracts and account for the 

additional tariffs on these machines by passing as much of the additional costs possible on to our 

customers as noted above. The U.S. manufacturers of boxes will then pass on the additional cost of 

the machine to those companies using the U.S. made boxes. Eventually, the cost of the box will 

increase and the customer buying goods on-line or in stores will pay more for the goods to account 

for the boxes. As in any multi-tiered purchasing pyramid, the cost that is passed on is generally more 

than the actual cost increase thus, the consumer could face increases not of 25% but more like 30- 

35% for the cost of the box. As consumers face increasing costs on necessities already listed by the 

USTR and subject to 25% tariffs (such as hair dryers, mixers, washing machines, etc.) imposing a 

tariff on the cost of the corrugated paper box in which is delivered is only adding insult to injury. 

6 
Conclusion: 

Haire respectfully requests that the following specific item be excluded directly from the 25% 

tariffs being imposed on imports from China: 

HTS US 8441.30.0000 Machinery for making cartons, boxes, cases or similar containers 

from corrugated paper, consisting of at least one of each of the following: feeding unit, 

printing unit, slotting and scoring unit, folding unit, and control system 

These machines are an integral part of many U.S. businesses. The boxes made on the machines 

are made in the U.S. using U.S. origin feedstock. The 25% tariff currently being applied is 

having a detrimental and unfair impact on a small company such as Haire Group, the installers and 

service providers who work on the machines, and eventually the consumer. We confirm that Haire 

Group has lost no IPR nor had any trade secrets stolen, but rather we are relying on European 

technology that is produced in China. We are contracturally bound to purchase these machines for 

the next five years so we cannot shift production from China to any other country. For these 

reasons, we seek this product specific exclusion. 

We remain available to provide additional information and look forward the the exclusion of these 

products from the punitive tariffs. 

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

of his knowledge. 

Respectfullly submitted, 

��

Herbert H. Passo/President 

Tom Haire, Inc. & Haire Machine Corporation 

7