1001 Pennsylvania Avenue, NW, Washington, DC 20004-2595  p202 624-2500  f202 628-5116

October 8, 2018 

VIA ELECTRONIC FILING PUBLIC VERSION 

Amb. Robert E. Lighthizer Docket No.: USTR-2018-0025 

United States Trade Representative 

600 17th Street NW 

Washington, DC 20508 

Re: Request to Exclude Certain Parts and Accessories for Use with Ultrasound 

Diagnostic Devices from Section 301 Tariffs 

Dear Ambassador Lighthizer, 

Siemens Medical Solutions USA, Inc. (“SMS”, d.b.a. Siemens Healthineers) respectfully 

requests for the exclusion of certain parts and accessories for use with Ultrasound devices, 

classified under HTS 9018.19.9560, from the Section 301 tariffs enacted against products from 

the People’s Republic of China (“China”). 

I. Background 

Siemens Medical Solutions USA, Inc. (“SMS”), with headquarters in Malvern, Pennsylvania, is 

a global company with significant operations in the U.S. providing medical diagnostic equipment 

to healthcare professionals through its [ ] U.S. employees. SMS has over [ ] ultrasound 

systems installed in the U.S. 

II. The Product 

SMS imported these items from wholly foreign-owned enterprises in China. All are classifiable 

under Harmonized Tariff System of the U.S. (“HTSUS”) code 9018.19.9560. 

An ultrasound diagnostic device uses high-frequency sound waves to create images of the inside 

of the body. It does not use radiation. The devices are used to evaluate fetal development, and 

can detect problems in the liver, heart, kidney, or abdomen. 

None of these imported items is an operational ultrasound device. 
PUBLIC VERSION 

III. Rationale for Requested Exclusion

A. The Technology Is Not Covered by Made in China 2025 

We understand that Section 301 tariffs are designed, among other things, to safeguard U.S. 

industries and technologies highlighted in the Chinese government’s “Made in China 2025” plan. 

However, the technology for these items is not covered by the “Made in China 2025” plan. 

Therefore, imposition of additional 25% duties on the parts and accessories SMS imports from 

China would serve no practical purpose to eliminate China’s unreasonable and discriminatory 

acts, policies, and practices identified by the United States Trade Representative (“USTR”). 

The technology of these parts and accessories does not contain the properties responsible for 

achieving or exceeding the performance levels, characteristics, or functions of the imaging 

devices covered by “Made in China 2025”. 

Specifically, “Made in China 2025” covers the following medical imaging equipment: 3T and 

above superconducting magnetic resonance system (MRI), open superconducting system, 128 

rows of X-ray computed tomography (CT), positron emission tomography / X-ray computed 

tomography (PET-CT) machine, positron emission tomography/magnetic resonance imaging 

system (integrated PET-MRI), color doppler ultrasound diagnostic equipment (128 and above 

physical channels), micro-ultrasound diagnostic equipment, digital subtraction angiography 

system (new imaging equipment such as DSA), X-ray phase contrast imaging, electrical 

impedance imaging equipment, and magnetoencephalography equipment. 

SMS’ imported parts and accessories are not among those that benefit from the “Made in China 

2025” program, or any other Chinese Government’s acts, policies or practices identified by the 

USTR as being unreasonable and discriminatory and that burden or restrict U.S. commerce. 

B. The Imported Parts and Accessories Are Solely from Wholly Foreign-Owned 

Enterprises in China. No Technology Has Been Transferred For Which the 301 

Tariffs Seek to Protect. 

SMS imported parts and accessories for use with ultrasound diagnostic devices exclusively from 

wholly foreign-owned enterprises in China. As recognized by USTR in its March 22, 2018 report, 

Product Description Part 

Number 

S Family TS GI E-Chassis 11147791 

S Family TS Card E Chassis 11147792 

S Family TS GI E-Chassis TFA 2 11150465 

S Family TS Card E Chassis 11150466 
PUBLIC VERSION 

force-transfer of technology exists in joint-ventures between a U.S. and a Chinese company1. 

Unlike joint-ventures, wholly foreign-owned enterprises are not susceptible to state coercion of 

any kind, including forced transfer of technology. 

Moreover, wholly foreign-owned enterprises support SMS’ U.S. operations and U.S. work force, 

including product development, engineering, testing, information technology, purchasing and 

supply chain, finance, planning, customer service, corporate development, as well as sales and 

marketing jobs. Imposition of additional 25% duties on its imported products, however, will only 

punish SMS with no practical effect to eliminate China’s unfair trade policies identified by 

USTR. 

C. The Imported Parts and Accessories Cannot Be Sourced Elsewhere 

Manufacturing of these items for use in ultrasound diagnostic devices presents a unique business 

challenge. The parts and accessories for these devices are heavily regulated by the U.S. Food & 

Drug Administration (“FDA”). No other manufacturers are available outside of China, nor is it 

feasible to qualify a new manufacturer as it would require significant capital investment and 

resources and long lead time due to complex regulatory schemes. The U.S. market does not 

demand sufficient quantities of the end-items to justify qualification of another manufacturer or 

relocating manufacturing to the U.S. 

Imposing 25% duties on SMS’ parts and accessories for ultrasound diagnostic devices, therefore, 

would significantly increase production cost and ultimately result in increased healthcare costs in 

an already price sensitive market. In this respect, rather than pay a 25 percent duty and import 

the devices at a loss, which could negatively impact the company and its employees, SMS may 

need to cease selling the models in the U.S. market all together, which in turn would negatively 

impact the U.S. healthcare industry and the availability of these vital diagnostic medical services. 

IV. Conclusion 

For the reasons outlined above, SMS respectfully requests an exclusion of these parts and 

accessories for use with ultrasound diagnostic devices from the Section 301 tariffs because it 

would significantly increase its operating cost and make the company less competitive. The 

technology of these items is not covered by the Made in China 2025 or otherwise affected by the 

concerns cited by the USTR as justification for implementing the Section 301 tariffs. Tariffs on 

parts and accessories for ultrasound diagnostic devices that are not available elsewhere outside of 

China will not advance national trade objectives and will be to the detriment of U.S. 

manufacturing. 

* * * 

 1

 See 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, Executive 

Summary, by office of the USTR Executive Office of the President (March 22, 2018), at vi-vii. 
PUBLIC VERSION 

This submission contains business confidential information for which SMS requests confidential 

treatment. As permitted in the Exclusion Request Procedures, SMS has identified business 

confidential information in brackets and has appropriately stamped each page containing 

business confidential information. As requested, we are simultaneously providing a public 

version of this request. SMS hereby certifies that disclosure of the bracketed business 

confidential information would endanger trade secrets or profitability, and that the information 

would not customarily be released to the public. The undersigned further certifies that the 

information provided is complete and correct to the best of his knowledge. 

Should you have any questions or require additional information, please do not hesitate to 

contact the undersigned. 

 Respectfully submitted, 

 Daniel J. Cannistra 

 Counsel to Siemens Medical Solutions USA, Inc. 
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 particular product of concern:

4.

*

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/

7.

5. Requestor's relationship to the product:

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.

Requestor Information

Requestor Name (Last, First):

VERSION 2 CONTINUED BELOW 1
8. Is this product, or a comparable product, available from sources in the United States? (If you

9. Is this product, or a comparable product, available from sources in third countries? (If you

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:

% of your total gross sales in 2017 that the Chinese-origin product accounted for.

% of the total cost of producing the final product(s) the Chinese-origin input 

accounts for.

% of your total gross sales in 2017 that sales of the final product(s) incorporating 

the input accounted for.

VERSION 2 CONTINUED BELOW 2

indicate "NO", you must provide support for your assertion in Box 12).

indicate "NO", you must provide support for your assertion in Box 12).

11. Is the Chinese-origin product of concern sold as a final product or an input used in

a) For imports sold as final products, please provide:

b) For imports of inputs used in the production of final products, please provide:

the production of a final product or products?
12. Please provide information in support your request, taking account of the

VERSION 2 END 3

instructions provided in Section B of the Federal Register notice. If you

responded "NO" to Questions 8 or 9, you must provide support for your

assertion in the box below. (Note: text entered below can extend beyond the

apparent size of this box).
ATTACHMENT 1 

ATTACHMENT 2 
THIS DOCUMENT IS NOT SUSCEPTIBLE TO PUBLIC SUMMARY