Public Version of BCI

The product is a wastegate valve and arm assembly sold to Ford to improve fuel economy on combustion 

engines in the automotive industry. The product is made of Nickel, Casting Steel with dimensions of 57.5 

x 41.3 x 20.3 mm. The product is generally shipped in a wooden crate and packaged in expendable 

cardboard. The HTSUS code, part number, and weight are printed on the commercial invoice, 

distinguishing this product from other imported products and facilitating administration of this exclusion 

by CBP. The product is further identifiable by a label on the product that correlates to the commercial 

invoice provided by the shipper. The product number for this product is 59001191037.

8481909085

Whittemore, Russell

BorgWarner Inc.

David Hamill, Arent Fox LLP

Importer

YES

Public Version of BCI

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. 

I. Indicate whether the comment contains business confidential information (BCI), is a public 

document, or is a public version of a BCI document. 

I I 

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

3. IO-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/ 

4. Requestor Information 

Requestor Name (Last, First): 

Organization Name: 

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

Requestor Representative: 

5. Requestor's relationship to the product: 

6. Does this submission in regulations.gov include additional attachments? 

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. 

VERSION 1 CONTINUED BELOW 1 
NO

NO

[ ] [ ] units

[ ] [ ] units

[ ] [ ] units

[ ] 

See attached for arguments in support of this exclusion request.

8. Is this product, or a comparable product, available from sources in the United States?: 

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. 

2017 Value: 

2016 Value: 

2015 Value: 

2017 Quantity: 

2016 Quantity: 

2015 Quantity: 

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 bdow can extend 

beyond the apparent size of this box). 

VERSION 1 END 2 
BorgWarner Inc. World Headquarters 3850 Hamlin Road 

Auburn Hills 

Michigan 48326, USA 

Tel: +1 248-754-0422 

October 1, 2018 

VIA REGULATIONS.GOV PUBLIC VERSION 

The Honorable Robert E. Lighthizer Docket No. USTR-2018-0025 

U.S. Trade Representative 

Office of the U.S. Trade Representative 

600 17th Street, NW, Room F516 

Washington, D.C., 20006 

Re: Request for Exclusion of Wastegate Valve and Arm Assemblies from the Determination of 

Action Pursuant to Section 301 

Dear Secretary Lighthizer: 

BorgWarner Inc. (“BorgWarner”) respectfully submits this request for the exclusion of 

wastegate valve and arm assemblies from the proposed determination of action pursuant to 

Section 301 of the Trade Act of 1974.1 This request is timely filed, pursuant to the U.S. Trade 

Representative’s (“USTR”) instructions set forth in the Section 301 Determination.2 In 

accordance with the USTR’s instructions, we respectfully request that certain information 

contained in this submission, identified by brackets, be afforded business confidential treatment.3

The undersigned certifies that disclosure of the information identified in brackets in the 

1

 19 U.S.C. § 2411. 

2 Procedures 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, 83 Fed. Reg. 32,181 (USTR July 

11, 2018). 

3

Id. at 32,183-84. 
PUBLIC VERSION Page 2 of 7 

confidential version of this submission would endanger the trade secrets and profitability of 

BorgWarner and would not customarily be released to the public. 

BorgWarner is a global product leader in clean and efficient technology solutions for 

combustion, hybrid and electric vehicles. With manufacturing and technical facilities in 66 

locations in 18 countries, we employ approximately 29,000 people worldwide. BorgWarner has 

evolved from a powertrain supplier to a vehicle propulsion company that is playing a major role 

in creating our vision of a clean, energy-efficient world. 

Our company’s origins date back to the 1880s in the United States and we have grown to 

a $9.8 billion publicly-traded company today. BorgWarner’s growth in the last century is the 

result of the expansion of new markets due to public policies that supported international trade. 

As an American company headquartered in the Auburn Hills, Michigan, we employ over 6,300 

people in 16 manufacturing and technical centers in eight states across the nation. Our company 

uses a local-for-local supply chain strategy and we source regionally when it is possible. In the 

U.S. we have a 65% supplier localization rate and our direct material purchases total over $1 

billion annually, with approximately 700 U.S.-based suppliers. Additionally, with our main R&D 

center for the U.S. in Auburn Hills, Michigan with four other R&D centers in the states of 

Michigan, Indiana, North Carolina, and New York. BorgWarner Inc. currently holds over 60% of 

our intellectual property in the U.S. Since 2012, BorgWarner has invested 600 new jobs and over 

$530 million in capital investments in the U.S. 
PUBLIC VERSION Page 3 of 7 

Though our goal is to source products regionally, the automotive industry is and has 

always been a global industry, and we source certain automotive parts to support our U.S. 

operations from China. The USTR has proposed a 25% ad valorem tariff on these items, which 

will negatively impact BorgWarner’s U.S. operations [ 

 ] 

This exclusion request addresses wastegate valve and arm assemblies classified under 

HTSUS subheading 8414.90.9085, which are currently subject to the 25% additional Section 301 

tariff. Please note that a separate Section 301 Investigation Form to Request Exclusion of 

Product has been submitted for each unique product for which we are requesting an exclusion. 

In accordance with the procedures released by the USTR,4 BorgWarner provides the 

following information requested by the USTR in support of this request. 

1. Availability of the product outside of China, i.e. whether the particular product 

and/or a comparable product is available from sources in the United States and/or 

in third countries. 

BorgWarner is not aware of any immediately available U.S. or third-country sources for 

the same or comparable products. Any supplier change would require a multi-year process as 

our customers requalify and approve the new supplier. 

The wastegate valve and arm assemblies that are the subject of this exclusion request 

(and like products) were previously produced in the U.S. However, production was forced out of 

4

Id.
PUBLIC VERSION Page 4 of 7 

the U.S. due to aging infrastructure and multiple foundry closures across the country. That 

production shift stemmed from a lack of investment in U.S. foundries, which left those facilities 

unable to meet the high quality standards required by the automotive industry. As a result, 

BorgWarner was forced to source from qualified suppliers in China and other countries. These 

parts were originally sourced to a third-world country outside of China, but, due to quality issues, 

sourcing was moved to China to a known source, which uses ductile iron material. 

BorgWarner is not aware of immediately-available existing capacity in the U.S. that 

could produce these parts to our customer specifications and BorgWarner’s requirements. We are 

unaware of the current capacity of existing U.S. producers and identifying a source within the 

U.S. would be a lengthy process. Even for products where domestic sources may ultimately be 

available, it would still take several years for U.S. supplier’s to satisfy BorgWarner’s and its 

customers’ validation requirements for these products. Therefore, switching suppliers for this 

product would likely lead to supply interruptions due to the lack of established infrastructure in 

place to handle the production of this product. BorgWarner estimates that moving production to 

a country outside of China would take at least 3-5 years. 

BorgWarner’s leading competitors also import heavily from China for like products. Our 

customers have expectations regarding quality that cannot be met by local sources. BorgWarner 

understands the intent and spirit of Section 301 is to protect the U.S. from China’s Acts, Policies, 

and Practices Related to Technology Transfer, Intellectual Property, and Innovation. However, 

any major changes to our supply chain could hurt our engineering and manufacturing processes, 
PUBLIC VERSION Page 5 of 7 

delay production, and jeopardize our ability to meet the vehicle production demands of the 

industry. 

For an automobile, the quality and consistency of materials and components are of the 

utmost importance because they can impact the vehicles performance. Our technologies take 

many years to refine and often require specialized materials in engineering and production. The 

products at issue are specifically calibrated with a customer’s engine systems and validated for 

performance and durability upon initial designs. Before a product is approved by our customer 

for production, our engineers must validate its performance. The testing process encompasses 

production validation, engineering studies, results analyses, and final reporting to the customer. 

If a new supplier passes the tests, BorgWarner engineers present data, analyses, and conclusions 

to its customers, who make the final decision on whether to approve our new supplier. In total, 

this process alone usually requires approximately twelve months. If a supplier fails a test, this 

timeframe could double. In addition, due to the technical nature of the products, our customers 

require their own extensive independent testing and validation of any and all suppliers to ensure 

adequate product performance, which adds further time and costs. 

2. Whether the imposition of additional duties on the particular product would cause 

severe economic harm to the requester or other US interests. 

The products imported by BorgWarner that are included on the USTR’s product list are 

automotive parts, which are imported to support domestic manufacturing operations and 

American jobs in the United States. The imposition of a 25% tariff on these automotive parts 

could cause severe economic harm to U.S. interests, [ ] our customers, 
PUBLIC VERSION Page 6 of 7 

and consumers. Specifically, any future business opportunities involving these products could be 

directly impacted by the price increase caused by the additional tariff. If BorgWarner directly 

absorbs the cost of the increase, our profitability will be damaged, [ 

 ] 

The added costs could also inhibit our U.S. facilities’ ability to meet the financial returns 

[ 

 ]. [ 

 ] 

3. Whether the particular product is strategically important or related to “Made in 

China 2025” or other Chinese industrial programs. 

The imposition of a 25% ad valorem duty on wastegate valve and arm assemblies will not 

impact the Chinese intellectual property violations they seek to eliminate. Section 301 tariffs 

should be specifically targeted at products that have benefitted from the China’s acts, policies, 

and practices detailed in the USTR’s Section 301 Report. The wastegate valve and arm 

assemblies at issue have not experienced or benefitted in any way from China’s discriminatory 

licensing requirements, foreign ownership restrictions, state-funded acquisitions, or state-backed 
PUBLIC VERSION Page 7 of 7 

hacking operations. The wastegate valve and arm assemblies are designed by BorgWarner and 

our intellectual property is not transferred to any Chinese supplier. 

We appreciate the Department’s consideration of this exclusion request. Please contact 

the undersigned if you have any questions regarding this submission. 

I hereby certify that the information provided is complete and correct to the best of my 

knowledge. 

Sincerely, 

________________________ 

Russell Whittemore 

Director, Supply Chain 

BorgWarner Turbo Systems 

BorgWarner Inc. 

828-650-7409 

rwhittemore@borgwarner.com