Eni CRRC 

CRRC MA Corporation 

October 5, 2018 

The Honorable Robert E. Lighthizer 

United States Trade Representative 

Office of the U.S. Trade Representatives 

600 17thStreet, N.W. 

Washington D.C. 20508 

Re: Docket: USTR 2018-0025-0001 

Request for Exclusion from Remedies Resulting from the Section 301: China's Acts, 

Policies, and Practices Related to Technology Transfer, Intellectual Property, and 

Innovation End Door HTSUS Number 8607995000. 

Dear Mr. Lighthizer, 

This exclusion petition is submitted by CRRC MA Corporation ("CRRC MA") regarding the 

determination of action pursuant to Section 301: China's Acts, Policies, and Practices Related to 

Technology Transfer, Intellectual Property, and Innovation to impose additional duties of twentyfive (25%) percent on certain products from China as listed on the Annex A to the Section 301 

Notice. CRRC MA respectfully requests that the end door listed under HTS 8607995000, which 

are components essential to the competitive manufacture of rail cars in the United States, be 

removed from the Section 301 List Annex A. 

1. CRRC MA's Investments and Operations in the United States will be Significantly 

Undermined by the Proposed Additional Tariffs 

CRRC MA is a Massachusetts company and a subsidiary of CRRC Corporation Limited, an 

international market leader in rail car manufacturing, providing all types of railway vehicles, 

machinery, and new energy products. CRRC MA, the corporation's first North American company 

was established to expand the company's U.S. footprint, and with that to bring its world class 

manufacturing technologies and processes to the U.S. In 2014, through a competitive bidding 

process, CRRC MA was awarded from the Massachusetts Bay Transportation ("MBTA") its first 

contract to design and manufacturer Boston's transit system a brand-new, state-of-the-art vehicle. 

The investment of an in-state, 204,000 sq. ft rail car manufacturing facility in Springfield, 

Massachusetts equipped with a 2,240-foot test track, is CRRC MA's hub to assemble subway cars 

for the MBTA, and vehicle assembly for recently awarded contracts from Los Angeles County 

Page 1 of 6 
CRRC MA Corporation 

Metropolitan Transportation Authority ("LACMTA") and Philadelphia's Southeastern 

Pennsylvania Transportation Authority (SEPTA"). With assembly of MBTA vehicles at the 

Massachusetts plant underway and other contracts soon to follow, a steady stream of 

manufacturing work will be realized at CRRC MA's facility. By 2026, CRRC MA's 

manufacturing facility will be at peak capacity with continuous work through the decade. 

CRRC MA is a world-class passenger rail vehicle manufacturer supplying rail cars to major 

United States public transportation agencies. CRRC MA has invested $95 million in establishing 

manufacturing facilities in Springfield and its facility center in Los Angeles is underway. As a 

result of its significant investment and growth, CRRC MA now employs approximately 206 

employees. The manufacturing facility in Springfield employs 121 employees, including 66 union 

production employees. This is projected to grow to 333 employees by 2020, of which 255 will be 

union production employees. This represents a 175% increase in the Springfield workforce by 

2020. CRRC MA continues to work with local partners in Western Massachusetts on the 

development of its workforce including: Springfield Technical College, Western New England 

College, the Regional Employment Board, the Urban League, Putnam Vocational High School, 

FutureWorks Veterans Inc., and Local Union 7 and 63. These partnerships have created training 

programs to prepare individuals for job placement in the mental fabrication sector. Actual job 

placement at CRRC MA has been realized from these partnerships. 

In addition to locating the company's facilities in Springfield MA, CRRC MA continues to 

identify and build partnerships locally to trigger and maintain investments in the economy. From 

hosting trade fairs to sponsorships to participating in community events, CRRC MA remains 

committed to being a significant thread in the fabric of Western Massachusetts. CRRC MA 

passenger rail procurement contracts currently include: 

• MBTA. CRRC MA is designing and manufacturing 404 Orange and Red Line subway rail 

cars, in conjunction with which CRRC MA has completed construction of a $95 million 

William c. Vantuono, CRRC Showcases Diversity, Railway Age (June 26, 2018), available at 

htt sWwww.railwa .a e.comi. assen erlarc- -showca_ses-clivcr5i

.

t. (CRRC MA...recently held a Supplier 

Diversity and Procurement Fair encompassing more than 40 minority and women owned business and 

approximately 150 corporations.) 

Page 2 of 6 

CD CRRC 
CRRC MA Corporation 

state of the art facility comprised of a 204,000 square-foot rail car manufacturing facility 

and a 2,240-foot dynamic test track and a staging/storage area in Springfield, 

Massachusetts. Furthermore, CRRC MA has contractually committed to a content value of 

60% of U.S.-manufactured components and systems in each rail car pursuant to the FAST 

Act to meet Buy America requirements. 

• LACMTA. CRRC MA is designing and manufacturing under the base contract 64 subway 

rail cars with an option for additional 218 vehicles. Those railcars will be a vital transit link 

of the 2028 Olympic and Paralympic Games to be hosted by the City of Los Angeles. 

CRRC MA is in the process of siting an assembly plan in the Los Angeles area, which will 

also be utilized by its suppliers. CRRC MA has contractually committed to a content value 

of 65% of U.S.-manufactured components and systems in each rail car pursuant to the 

FAST Act to meet Buy America requirements. 

• SEPTA. CRRC MA is designing and manufacturing 45 double deck commuter rail 

vehicles with one of its affiliated company. 

CRRC MA's decision to import components from China has allowed CRRC MA to compete 

in an industry dominated by Japanese, Canadian and French companies. CRRC MA only engages 

with some Chinese contract manufacturers to supply parts as a measure to provide U.S. 

transportation authorities significant cost savings. However, the tariffs for the products listed on 

the retaliation list will have a significant, negative financial impact on CRRC MA, its assembly 

facility in Springfield, and existing contracts with transit agencies in Boston, Los Angeles, and 

Philadelphia. The imposition of the additional 25% tariff on HTS 8607995000 end door will result 

in increasing costs to all parties involved, which in turn will ultimately either be borne by the 

public or, alternatively, result in less value being utilized from limited federal and state funds. 

Studies also predict that the imposition of the additional tariffs would significantly harm the U.S. 

manufacturing industry and workers2. In particular, CRRC MA's reduced participation would 

lessen overall competition in the passenger rail industry which is dominated by foreign companies 

2Joseph F. Francois and Laura M. Bughman, Tartffs on Imports frorn China: The Estimated Impacts on the US. 

Econorny, Trade Partnership Worldwide (April 30, 2018) available at hrm:ilcta.techicta/media/policylmages/China301-Tariffs-f 1NAL.pdf (predicting significant net negative impacts on the U.S. economy and U.S. employment, the 

U.S. output would decline and nearly 134,00 workers would lose jobs, most of them less-skilled workers; and the 

tariff plus retaliation will hurt every state). 

Page 3 of 6 

CRRC 
..g. Ea CRRC CRRC MA Corporation 

and translates into higher costs to U.S. taxpayers, with no corresponding benefit. Again, and 

importantly, there are no U.S. manufacturers of Light and Heavy Rail Transit Vehicles. 

2. CRRC MA's Products Should not be Subject to the Proposed Additional Tariff 

It is our understanding that the Section 301 investigation of China's acts, policies, and practices 

related to technology transfer, intellectual property, and innovation was designed to balance trade, 

eliminate forced joint ventures, forced technology transfer and combat industrial initiatives such 

as the Made in China 2025. However, inclusion of HTS 8607995000 rolling stock parts does not 

achieve this intended objective for the following reasons: 

(i) Although one of the alleged aims of the tariff is to enable a return of manufacturing to 

America's shores, this is not true of the passenger rail car manufacturing sector as the 

U.S. ceased producing passenger rail vehicles in the mid-20thcentury, and as a result, 

there is currently no passenger rail car manufacturing in the U.S. All Transit Vehicle 

Manufacturers (TVM) are foreign-owned, including Canada, Japan, France, Germany, 

Italy and China. As such, the tariff CRRC MA will bear will simply provide an 

advantage to those foreign suppliers by restricting competition. The U.S. transit and 

transportation industry no longer manufacturing light and heavy rail transit vehicles. 

CRRC MA encounters difficulty identifying an American source to procure those 

quality stock parts domestically in the quantities required. Important factors are 

considered when procuring those components including supplier reliability, quality, 

availability, and cost when seeking a supply source. Additionally, importing these 

components will not compromise U.S. economic viability of the domestic transit 

industry. 

(ii) The tariffs would heavily burden the public agencies who are CRRC MA's principal 

customers for transit rail cars, either through a pass-through by CRRC MA of the 

additional costs or by price increases by CRRC MA's major competitors from 

eliminating CRRC MA from procurement competitions. Several public transportation 

agencies expressed their concerns either by submitting their comments pursuant to 

Page 4 of 6 
CRRC CRRC MA Corporation 

USTR's request for public comments concerning Section 301 investigation3or by 

submitting supporting letters (please see attached for the supporting letters). 

(iii) Consideration of the existing Buy America requirements is also critical to this issue. 

By providing federally-funded procurements, 60% to 70% of the cost of all components 

of a passenger rail vehicle must be American-made and the vehicle assembled in the 

U.S. This Federal Transit Administration regulation more appropriately addresses the 

public interest to promote American manufacturing while taking into account available 

U.S. manufacturing capacity, and thus there is no additional benefit to be served by 

including rolling stock parts in the Section 301 List. All CRRC MA projects are Buy 

America compliant and the overwhelming majority of industry procurements have 

strict Buy America requirements. 

(iv) CRRC MA devotes substantial resources to research and development as part of a 

continuous effort to improve efficacy of our products. CRRC MA employs a workforce 

of high skilled engineers and designers to design and developed technologies and 

products in-house in the United States and to customize the products specifically to 

meet the technical specifications required by the Public Transit Agencies in the U.S. 

market. The additional tariff proposed by USTR should not punish a U.S. company 

like CRRC MA who is engaged in developing technologies in the United States, which 

runs counter to the objective of protecting U.S. technology and intellectual property 

rights. 

For all the reasons stated above, CRRC MA respectively submits that this imposition of the 

additional tariffs soon will have serious negative consequences to CRRC MA operations including 

at its Springfield manufacturing facility, at its headquarters in Quincy, and in Massachusetts 

overall. Moreover, these tariff increases will not achieve USTR's stated purpose of targeted 

3Chicago Transit Agency submitted its comment to express its concern, "CTA is not just one of the nation's largest 

transit agencies, it is one of the oldest. In order to attract investment by companies...upgrades of its system 

including its railcar fleet are necessary. Safety on the rail network also demands these upgrades which if a high 

priority...To the extent that the proposed tariffs impact the costs of new railcars and maintaining state of good repair 

of its railcars, the entities that will be hurt the most are the transit agencies and their funding partners...); See also 

the comment submit by Los Angeles County Metropolitan Transportation Authority, "certain items proposed for 

tariffs in response to these practices would increase the costs of Metro's publicly-funded projects, penalizing U.S. 

taxpayers as we are working to expand and improve our transit programs to the benefit of the Los Angeles 

community..." 

Page 5 of 6 
CRRC MA Corporation 

technology transfers to China, as in this case CRRC MA has documented that it is transferring its 

manufacturing technology and processes to the benefit of U.S. workers, and has additionally 

invested more than $130 Million into new U.S. operations. Therefore, CRRC MA respectfully 

requests that to promote competition and to continue to encourage American manufacturing, the 

end door under HTS 8607995000 be removed from the Section 301 List Annex A. 

Respectfully submitted, 

1 ‘it • /4

IL-- zBo Jia 

Vice President 

CRRC MA Corporation 

CRRC 

Page 6 of 6