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:
2500 Citywest Blvd., Suite 1110

Houston, TX 77042-3049

Office: 713.932.0168 Fax: 713.932.0497

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

Re: Docket No. USTR-2018-0025; Request for Exclusion of Certain Artificial Lift 

Systems 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:

The Petroleum Equipment & Services Association (“PESA” or “the Association”), on behalf of its 

member companies, respectfully requests that certain artificial lift systems imported from China 

and classifiable in subheading 8413.50.0010 of the Harmonized Tariff Schedule of the United 

States (“HTS”) be excluded from the additional 25% ad valorem duty that took effect on July 6, 

2018 pursuant to the United States Trade Representative’s determination under Section 301 of 

the Trade Act of 1974.1

The articles at issue are reciprocating positive displacement pumps for oil wells (“the Artificial 

Lift Systems”). Its function is to displace oil from the bottom of an oil well to the surface. The 

Artificial Lift Systems’ primary components include a walking beam, the horsehead, the 

counterweight, the gear reducer and the prime mover. These components are made from cast 

iron, steel, aluminum, or bronze. The products are disassembled in their condition as imported. 

Post importation, the Artificial Lift Systems are assembled and connected with various rods and 

other connections. The units are placed above ground and moves downward and upward 

through the underground well to extract oil and gas. 

As discussed further below, an exclusion for the Artificial Lift Systems is appropriate and 

necessary to prevent the additional duty, itself, from becoming a burden on U.S. commerce. 

First, comparable products are not currently available outside of China. Second, the additional 

duty on the Artificial Lift Systems will cause severe economic harm to PESA’s member 

companies and to the U.S. oil and gas industry. Third, the articles at issue are not products of 

 

1

Notice of Determination 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. 14,906 (Apr. 6, 2018); 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. 28,710 (June 20, 2018).
strategic importance to, nor do they contain the type of advanced technology that benefits from, 

China’s industrial policies, in particular the “Made in China 2025” plan. Thus, the grant of a 

product exclusion will not undermine the objective of the Section 301 duty. 

I. Requestor Background

PESA is the unified voice for the energy industry’s services and equipment organizations, 

advocating for and supporting this sector’s achievements in job creation, technological 

innovation and economic stability. We represent more than 200 energy services and equipment 

organizations that employ a diverse workforce of approximately 1.3 million. Its members include 

the largest oil and gas companies in the United States. PESA is headquartered in Houston, 

Texas. 

II. PESA Members Must Purchase Chinese-Origin Artificial Lift Systems Because 

Comparable Products Are Not Currently Produced in the United States or Third 

Countries 

According to USTR, the objective of the Section 301 duty is to bring about the elimination of

China’s unreasonable and discriminatory acts, policies and practices relating to technology 

transfers, intellectual property and innovation. In theory, the duty will deter imports of Chineseorigin products, thereby placing sufficient economic pressure on the Chinese government to 

force it to cease its acts, policies and practices. This strategy will prove unsuccessful for 

Artificial Lift Systems because comparable products are not currently produced in sufficient 

quantities in the United States or third countries. Thus, PESA’s members must continue to 

purchase these products from China.

The Artificial Lift Systems are machinery used for the extraction of oil and gas. These products 

are designed and built to precise performance and reliability standards. PESA’s members 

which import these pumps have spent years qualifying, and establishing relationships with, 

certain suppliers that are proficient in producing the Artificial Lift Systems. Moreover, our 

members have invested heavily in tooling in China which cannot be quickly relocated and which 

requires substantial training to operate. 

While substitute products are not available outside of China, PESA members are exploring the 

availability of comparable products from sources in third countries. However, given our 

members’ long-standing investments in and relationships with suppliers in China, and the 

Company’s duty to exercise diligence in onboarding new suppliers, it will take some time for 

members to develop alternative sourcing strategies. Approving this product exclusion request 

will afford the companies the additional time they need to transition sourcing operations to 

suppliers located in countries outside of China.

III. The Additional Duty Will Cause Severe Economic Harm to U.S. Interests 

The U.S. oil and gas industry will bear the expense of the additional duty imposed on the 

Artificial Lift Systems. The effect will be two-fold. First, it will be economically infeasible for our 

members to continue importing Artificial Lift Systems without raising prices on customers to help 

offset the cost. These price increases will be passed down to the end users of oil and gas, 

which is virtually the entire population of the United States. As a result, U.S. consumers will pay 

more for oil and gas, and for petro-based products (e.g., products made from rubber, plastic, 

etc.). 
Second, imposing a 25% duty on oil and gas extraction equipment will discourage additional 

investment in oil and gas extraction. One of the pillars of the current U.S. national security 

strategy is to “promote American prosperity” by “embracing energy dominance.”2 The “priority 

actions” for accomplishing this objective include limiting burdens that “encumber energy 

production and constrain economic growth,” while encouraging maximum technological 

efficiency in fossil fuel exploitation to “promote exports of our energy resources.” Simply put, the 

products imported by PESA members serve this pillar of U.S. national security strategy. 

The National Security Strategy of the United States of America issued by the administration in 

December 2017 states that the United States will prioritize being an “energy-dominant nation.” 

The National Security Strategy prioritizes “unleashing . . . abundant energy resources,” including 

“coal, natural gas, [and] petroleum” in order to “stimulate[] the economy and build[] a foundation 

for future growth.” The success of this objective is dependent on PESA members, which exist 

solely to serve the needs of the extractives industry. 

In summary, the additional 25% duty on Artificial Lift Systems will result in higher costs for U.S. 

consumers and hinder U.S. national security strategy of achieving and maintaining energy 

dominance.

IV. The Grant of a Product Exclusion Will Not Undermine the Objectives of the 

Section 301 Duty

A product exclusion covering the Artificial Lift Systems will not undermine the ultimate objective 

of the Section 301 duty—to obtain the elimination of China’s unreasonable and discriminatory 

acts, policies and practices in relation to technology transfers, intellectual property and 

innovation—because these products are not strategically important to China’s industrial policies, 

including “Made in China 2025.” As USTR noted in its Section 301 report on the investigation 

into China’s acts, policies and practices, the cited acts, policies and practices are driven largely 

by China’s industrial policies, which are focused on technology.3 At several points, the report 

highlights the fact that China’s goal is to become a global leader, particularly with respect to 

advanced technologies, and that it seeks to “move up the value chain, advancing from low-cost 

manufacturing to become a ‘global innovation power in science and technology.’”4

Accepting the conclusions in USTR’s report, the Artificial Lift Systems cannot be considered 

products of strategic importance to China’s industrial policies. The Artificial Lift Systems are, as 

compared with the high-tech sector products identified in the “Made in China 2025” plan,5

 

2

National Security Strategy of the United States, Executive Office of the President (December 2017) (available at: 

https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905-2.pdf). 

3

Office of the United States 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 10-17 (Mar. 22, 2018), https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF. 

4

Id. at 10.

5

According to the “Made in China 2025” plan, China is focused on growth and competitiveness in ten high-tech 

sectors and on high-value, high-tech products in those sectors, which include information technology, robotics, 

aerospace equipment, maritime engineering equipment and vessel manufacturing, advanced railway equipment, 

new energy vehicles, electrical equipment, biomedicine and high-performance medical devices, and agricultural 

equipment. U.S. Chamber of Commerce, Made in China 2025: Global Ambitions Built on Local Protections 10 
devoid of advanced technology and software. The underlying technology in the Artificial Lift 

Systems, using weights/counterweights and motors to effectuate the positive displacement of 

fluid, is old technology. In light of China’s goal to higher technology manufacturing, the Artificial 

Lift Systems are not strategically important products for China and the additional duty on imports 

of these pumps will not put pressure on China to eliminate its unreasonable and discriminatory 

practices that are focused on advanced technology products and intellectual property.

V. Proposed Tariff Language for the Artificial Lift Systems

PESA proposes the following language for the Artificial Lift Systems:

Artificial lift systems, including reciprocating and rotary positive displacement pumps, 

used solely or principally as surface pumping units for oil and gas extraction 

U.S. Customs and Border Protection (“CBP”) would be able to administer the exclusion of such 

products with minimal difficulty. Specifically, CBP can identify the Artificial Lift Systems by their 

descriptions on the shipping documentation. Further, the products are visually identifiable as oil 

and gas extraction equipment.

VI. Conclusion

Comparable Artificial Lift Systems are not currently available in sufficient quantities from 

countries other than China. Given the commercial impracticability of immediately abandoning 

current sources of supply and establishing new relationships with suppliers that have not yet 

been qualified, granting this product exclusion request will protect PESA members and the U.S. 

oil and gas industry from economic harm while companies reposition their sourcing strategies. 

Not granting this request will cause severe economic harm to our members, lead to higher 

prices for U.S. consumers, and undermine U.S. energy independence. Last, the grant of this 

exclusion will not undermine the objective of the Section 301 duty because the Artificial Lift 

Systems do not incorporate advanced technology and software. As such, these pumps are not 

strategically important to China’s industrial policies. 

For the reasons set forth above, we respectfully request that USTR grant this request for a 

product exclusion. The undersigned certifies that the information provided herein is complete

and correct to the best of his knowledge. If you have any questions, please contact the 

undersigned at 713-932-0168.

Respectfully submitted,

Tim Tarpley

Vice President Government Affairs

 

(2017), https://www.uschamber.com/sites/default/files/final_made_in_china_2025_report_full.pdf.