Organization Name:

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

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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

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

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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

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VERSION 1

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October 5, 2018

FILED VIA REGULATIONS.GOV

The Honorable Robert E. Lighthizer

U.S. Trade Representative

Office of the United States Trade Representative

600 17th Street, N.W.

Washington, D.C. 20508

RE: Request for Section 301 Exclusion

Handheld Nonelectric Micrometer Torque Wrenches 

Classified in 8466.10.0175, HTSUS

Docket No. USTR-2018-0025

Dear Ambassador Lighthizer:

Apex Tool Group, LLC (hereinafter “ATG”) is submitting this exclusion request for certain 

handheld tool holders pursuant to Docket No. USTR-2018-0025, 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. 32181 (Jul. 11, 2018). As detailed below, the tool holders at issue are not 

high-tech products that are strategically important to or related to the “Made in 2025” or any other 

Chinese industrial programs. Moreover, they are not commercially available outside of our own 

factories in China and the imposition of an additional 25% tariff will cause serious economic harm 

to ATG, its retail customers, and American consumers. For these reasons, ATG respectfully 

requests that the Handheld Nonelectric Micrometer Torque Wrenches (“torque wrenches”) that 

are classified in subheading 8466.10.01 of the Harmonized Tariff Schedule of the United States 

(“HTSUS”), be excluded from Annex A of the USTR Notice published at 83 Fed. Reg. 28710 

(June 20, 2018) (“Annex A”). 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 2 of 17

I. Overview of the Company

ATG is one of the largest manufacturers of professional hand and power tools in the world, 

serving the industrial, vehicle service and assembly, aerospace, electronics, construction and 

serious DIY markets. ATG maintains a portfolio of over 30 innovative brands 

including, GearWrench®, Weller®, Wiss®, Lufkin®, Cleco® and Crescent®. ATG also 

manufactures select, premier private label mechanics tools. Across the board, our tools stand for 

quality, innovation and value. Known for solving seemingly impossible problems, they are 

intuitive and simple to use, yet indispensable.

ATG works collaboratively with distributors, retailers and large customers across the globe 

to make sure end users have the tools they need to solve real-world problems. ATG is 

headquartered in Sparks, Maryland and employs approximately 1,800 people in the United States 

and another 6,400 people worldwide. We have manufacturing facilities and/or distribution 

facilities in Arkansas, Michigan, Ohio, Pennsylvania, North Carolina, South Carolina, and 

Wisconsin. Our products are hand tools, power tools and electronic tools (described below). We 

provide these tools for various industries such as the industrial sector, vehicle repair, vehicle 

assembly, aerospace and the construction and do-it-yourself customers. ATG relies on imported 

components to produce many of its products here in the United States. In addition, ATG imports 

primarily lower value added finished goods from China and the vast majority [ ] of the subject 

tools from China are made at ATG-owned facilities.

Ratchets/drivers

The ratchets/drivers line consists of the business operations providing mechanic, trade, and 

specialty tools, chain, truck boxes, jobsite storage and drill chucks to a broad range of 

industrial, construction, vehicle repair and DIY customers worldwide.

Power Tools

The power tools line consists of the business operations providing electric tools, as well as 

high performance bits, torque measurement, metal cutting and drilling solutions to the 

global industrial, vehicle assembly, aerospace and utilities/energy markets. To learn more, 

explore the Cleco Production Tools website.

Electronic Tools
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 3 of 17

The professional electronic tools line consists of the business operations providing 

precision soldering, cutting, motion control and air ventilation solutions to electronics 

assembly industries.

Our products are sold through national industrial distributors, contractor supply houses, 

automotive tool and equipment distributors, and many independent regional and specialized 

distribution partners. Certain consumer retailers, home centers, and hardware stores also sell our 

private-label products alongside ATG brands.

II. Handheld Nonelectric Micrometer Torque Wrenches (classifiable in 

8466.10.0175).

We request exclusion from Annex A for our handheld nonelectric micrometer torque 

wrenches. These are handheld wrenches that require sockets (not included at the time of 

importation) to function. Torque wrenches are designed to precisely apply a specific torque to a 

fastener such as a nut or bolt. They prevent overtightening of fasteners where tightness is critical. 

The operator can measure the torque applied to the fastener so it can be matched to specifications 

of a particular application. Below is a photograph of a typical GEARWRENCH® brand torque 

wrench at issue: 

MODEL NO. 85060

These torque wrenches are classified in tariff code 8466.10.0175, HTSUS. See, e.g., Ruling 

N054804 (4/15/09). Annex A includes all products classified in the 8-digit subheading 

8466.10.01, HTSUS. In its entirety, this subheading reads as follows (with the subject tool holder 

provision highlighted in red):
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 4 of 17

By way of tariff schedule background, the vast majority of handtools are classified in 

Chapter 82, HTSUS. In fact, Chapter 82 is entitled “TOOLS, IMPLEMENTS, CUTLERY, 

SPOONS AND FORKS, OF BASE METAL; PARTS THEREOF OF BASE METAL.” Some of 

the handtools classified in this chapter include: 

• Heading 8201: Spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks 

and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, 

hedge shears, timber wedges and other tools of a kind used in agriculture

• Heading 8202: Saws

• Heading 8203: Files, rasps, pliers, pincers, tweezers, metal cutting shears, pipe cutters, 

bolt cutters, perforating punches, and similar handtools

• Heading 8204: Hand-operated spanners and wrenches (including torque meter wrenches 

but not including tap wrenches); socket wrenches, with or without handles, drives or 

extensions

• Heading 8205: Handtools (including glass cutters) not elsewhere specified or included: 

Blow torches and similar self-contained torches; Vises, clamps and the like; Anvils; 

Portable forges; Hand- or pedal-operated grinding wheels with frameworks; Drilling, 

threading or tapping tools; Hammers; Planes, chisels, gouges and similar cutting tools for 

working wood; Screwdrivers; Pipe tools: Crowbars; Caulking guns

• Heading 8206: Tool sets containing one or more of the tools described in the above 

headings.

• Heading 8207: interchangeable tools for handtools (e.g., bits).
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 5 of 17

The reason these tool holders are not included in this chapter is due to a Chapter 82 Legal 

Note and interpretations of that Note by the courts and U.S. Customs & Border Protection (“CBP”). 

These can be summarized as follows:

A. Chapter Note 1, Chapter 82, HTSUS:

1. Apart from blow torches and similar self-contained torches, portable forges, 

grinding wheels with frameworks, manicure or pedicure sets, and goods of heading 

8209, this chapter covers only articles with a blade, working edge, working 

surface or other working part of:

(a) Base metal;

(b) Metal carbides or cermets;

(c) Precious or semiprecious stones (natural, synthetic or reconstructed) on a 

support of base metal, metal carbide or cermet; or

(d) Abrasive materials on a support of base metal, provided that the articles have 

cutting teeth, flutes, grooves or the like, of base metal, which retain their identity 

and function after the application of the abrasive.

B. Judicial Interpretation:

Prior to the HTSUS, each country had its own tariff classification system. The United 

States had the Tariff Schedule of the United States (“TSUS”). In the mid 1980’s, the United States

adopted the HTSUS. However, prior to the change to the HTSUS, Note 1 to Chapter 82, HTSUS1, 

above was the subject of a court case by the U.S. Customs Court2 in Continental Arms Corp. v. 

United States, 65 Cust. Ct. 80 (1970). The Continental Arms court, in classifying a "valvespot 

oiler”, considered what constitutes a “working edge, surface or part” for purpose of headnote 1. 

After reviewing evidence proffered by both parties, the court decided that the term "working part" 

referred to "that part of the tool which does work in relation to a workpiece or object external to

the tool." In applying its interpretation to the product at trial, the Continental Arms court found 

 1 The note at the time was Schedule 6, part 3, subpart E of headnote 1 of the TSUS, which is virtually the same note 

as found today in Chapter 82, Note 1.

2 The predecessor to the U.S. Court of International Trade.
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 6 of 17

that the spout in the valvespot oiler was a passive conduit that did not work on an external object 

and was therefore not a "working part" of the oiler.

CBP has found that torque wrenches that are imported without sockets are classified as 

“tool holders” in subheading 8466.10.01, HTSUS. See, e.g., Ruling N054804 (4/15/09). 

If Note 1 had not been so interpreted by the Customs Court and CBP, these items would 

most certainly be classified in Chapter 82, specifically Heading 8205. Instead, they are classified 

in what is arguably a “second best” category covering tool holders. The “tools” these drives “hold” 

are sockets and bits, both of which are classified in Chapter 82. Under the above interpretations,

the sockets and bits work on the fastener directly whereas the drives work on them indirectly. This 

interpretation ignores the leverage and torque the drives provide in tightening and loosening 

fasteners. One could argue the framers of the HTSUS would never have intended this result, but 

absent a Congressional act to modify the HTSUS or an interpretative change by the courts or CBP, 

these items are not included in the handtool chapter.

We thought it would be helpful to contrast these tool holders with industrial tool holders 

and self-operating die heads that do fall under the targeted 8-digit subheading (8466.10.01, 

HTSUS). We have set forth below actual examples of those expensive, complex tool holders. 

ATG does not import them and has no opinion on whether they should be included in Annex A

but merely includes them here to show the contrast between them and our low-tech tool holders:

Self-Opening Diehead

http://www.plumberscrib.com/ridgid97075-815a-self-opening-die-head-righthandonly.html?gclid=EAIaIQobChMIioGL6Ie23AIV

gUCGCh0uagLREAQYCyABEgICb_D_BwE

Retail Price: $ 478.85
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 7 of 17

Source: http://techminy.com/wp-content/uploads/2016/12/Components-of-die-and-punch-Assembly.jpg

T-A® Spade Drill Insert Holders

https://www.travers.com/t-areg-spade-drillinsert-holders/p/71533/

Price Range: $ 185.01- $ 697.09
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 8 of 17

https://www.amazon.com/GearWrench-85066-Micrometer-TorqueWrench/dp/B00HQGI4CC/ref=sr_1_1?s=hi&ie=UTF8&qid=1538511335&sr=1-

1&keywords=torque+wrench+bit&refinements=p_89%3AGearWrench

As you can see, these simple torque wrenches are very dissimilar from the complex mechanical 

tool holders for which this tariff heading is intended to cover. 

III. ATG Products Use Widely Available Manufacturing Technology

and Are Not a Part of the Made in China 2025 or Any Other

Chinese Industrial Program Initiatives

In the USTR’s Executive Summary of its 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 (3/22/18), it cited a plan published by the Chinese 

Government entitled Made in China 2025 (July 7, 2015). Handtools are not one of the 10 Priority 

Sectors identified by China in this plan. On page 23 of that plan, China outlined its objectives in 

the “High-end Digital Control Machine Tools and Robot” sectors:

3.6.2 High-end Digital Control Machine Tools and Robots

High-end Digital Control Machine Tools - We will:

• Develop precision machine tools capable of high speed, high efficiency 

and functional flexibility, and develop manufacturing equipment and 

integrated manufacturing systems.

COMPARED WITH:
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 9 of 17

• Accelerate research of frontier technologies and equipment like high-end 

digital control machine tools and additive manufacturing.

• Focus on reliability, stability and precision of major parts like high-end 

numerical systems, servomotors, bearings and grating to realize 

industrialization.

• Improve user process certification.

Robots – We will:

• Actively research new products and promote robotic standardization and 

market application modularization in order to meet demand for industrial 

robots in automobile, machinery, electronics, chemicals and light industry, 

specialty robots and service robots in medical treatment, domestic services, 

education and entertainment.

• Remove the bottleneck of essential spare parts like robot bodies, reducers, 

servomotors, controllers, sensors, drivers and integrated system design.

Made in China 2025, State Council, July 7, 2015; at 23.

We suspect this was the basis for the USTR’s inclusion of subheading 8466.10.01, HTSUS, 

as there is no other industrial sector in this plan that would involve tool holders. The basic handheld 

nonelectric micrometer torque wrenches at issue are not high-end digital control machines or 

robots or parts of those machines. The technology used by ATG to make these simple handoperated tool holders is not the “cutting-edge” technology that is being sought by China. 

Accordingly, we fail to see how inclusion of these tool holders in this Section 301 action would 

help the USTR meet its stated objective of eliminating China’s policies on intellectual property 

rights acts, policies, and practices or disrupting China’s industrial economic goals described in 

Made in China 2025.

IV. China Never Attempted to Acquire ATG Technologies

ATG has never been restricted by the Chinese government in its manufacturing in China

and ATG would know because it is the main producer of these tool holders in China. For example, 

in 2017, roughly [ ] of ATG’s Chinese imports under subheading 8466.10.01, HTSUS, were

made at wholly foreign-owned enterprises (“WFOEs”) owned by ATG. Another [ ] were 

produced at one facility that is [ ] owned by ATG and [ ] owned by a Chinese partner. That 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 10 of 17

was a purely business decision based upon land availability by the shareholder in exchange for a 

small ownership interest in the company. That silent partner has no operational involvement, nor 

has there ever been any technology transferred. Combined, nearly [ ] of ATG’s imports under 

this subheading are produced in ATG’s own facilities.

ATG can confidently state 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 operations in 

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

property to Chinese company. The Chinese government’s acts, policies and practices did not

deprive our Chinese facilities of the ability to set market-based terms in licensing and other 

technology-related negotiations nor did it undermine our control over our technology in China. It 

has not been limited by required Chinese equity in manufacturing nor subject to various 

administrative reviews or licensing processes. The Chinese government has never directed nor 

unfairly facilitated the systematic investment in or acquisition of our assets or intellectual property.

Finally, we are unaware of any data attacks or breaches by the Chinese government on any of our 

facilities or other attempts by the Chinese government to penetrate our computer networks and 

access sensitive trade secrets.3

Simply put, the Chinese government is not interested in our technology. Imposing tariffs 

on these handheld tool holders would only harm U.S. interests, and would in no way influence or 

bring about the elimination of China’s acts, policies and practices that threaten IPR or trade secrets.

V. Severe Economic Harm to ATG and Other U.S. Interests 

The imposition of tariffs of 25% on the subject tool holders will cause severe economic 

harm to U.S. interests. These products constitute a significant portion of our imported finished 

goods. China is the largest supplier in the world for all products included as “other” under 

 3

ATG’s primary systems are located in the US and have not been compromised, hacked or attacked. Our systems 

located in other Asian countries have the same protections as our U.S. facilities. ATG has never suffered a breach of 

its IPR protections. 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 11 of 17

8466.10.0175, HTSUS. As clarified earlier, the primary factories making these tool holders are 

ATG-owned factories. Their production and employment are directly tied to and complement our 

U.S. operations. Further, because of the machinery involved in crafting these tool holders, we 

cannot easily shift production to another country in which we currently manufacture, including the 

United States. The costs to shift production would increase manufacturing costs by at least [ ]

which is above the 25% tariff. 

While we do manufacture our broad range of tools globally, most of the subject tool 

holders are manufactured in China and Taiwan. In addition, we also manufacture in the United 

States. Importantly, ATG products with lower value-added manufacturing are centered in China

whereas higher value-added products are centered in the United States. Our ability to balance 

global manufacturing allows us to allocate costs across the various manufacturing scenarios to 

provide quality product at reasonable prices. 

In the United States, we manufacture:

1. Steel chain and accessories at our York, PA facility; 

2. Forging operations for chain and ratchets/drivers at our Sumter, SC facility;

3. Power tools and some torque wrench production that relies on imported Chinese 

components subject to the tariff at our Lexington, SC facility;

4. Delta truck boxes and jobox constructions storage boxes are made in our Jonesboro, AR

facility; 

5. Configure U.S. and German-made power tools into specific application fixtures for auto 

manufacturing plants in our Auburn Hills, MI facility;

6. Manufacture ATG brand bits and sockets for power tool applications in Dayton, OH; and

7. Special precision machining in our Walworth, WI facility.

ATG operations in the United States are already being negatively impacted by the steel 

tariffs imposed by the President under Section 232 of the Trade Act of 1962. Even though we use 

USA steel in our truck boxes and storage boxes, within three weeks of the tariffs being imposed 

on imported steel, our suppliers increased our prices by [ ]. The increase in manufacturing costs 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 12 of 17

already in the United States combined with increases of another [ ] for goods made globally will 

impact our ability to provide these handheld nonelectric micrometer torque wrenches, which are 

necessary for construction, auto, industrial technicians, contractors, tradesmen, and serious do-ityourselfers. Our increased costs will be passed on to these vital U.S. industries and negatively 

impact their ability to use our tools and continue to build, make, and manufacture in the United 

States.

The below graphic illustrates the economic harm ATG anticipates from these increased 

duties. As you can see, we estimate the American consumer will pay roughly $300 million more 

per year for just individual ratchets and tool sets classifiable in subheading 8466.10.01, HTSUS:

For these specific torque wrenches, ATG alone faces nearly [ ] in potential additional 

duties each year. These products are strong margin contributors to ATG and contribute to the 

overall financial stability of the company. Furthermore, when all three phases of the Section 301 

duties announced to date are considered, ATG faces a staggering sum - nearly [ ] - in potential 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 13 of 17

additional duties each year. This is a severe, unanticipated expense that if fully implemented will 

cause serious economic harm to our company.

As the below graphic illustrates, the 25% increase in duties will mean Americans will buy 

fewer items. The suppressed demand will erode profitability. Revenues will decrease, as will direct 

investment. ATG employs roughly 1,600 associates in the United States and estimates a 10% drop 

in demand will result in a [ ] drop in U.S. investment and headcount.

VI. These Torque Wrenches Are Not Commercially Available Outside of China

As illustrated in the below analysis that ATG prepared using 2017 Industry Point of Sales 

Data, production of tool holders classifiable in subheading 8466.10.01, HTSUS, outside of China 

cannot meet the U.S. consumptive demand. The chart below demonstrates how currently, global 

capacity of all tool holders classifiable in 8466.10.0175, HTSUS, is 35 million units with current 

production at 31 million units. Driven primarily by ATG facilities, China currently produces 21.2 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 14 of 17

million units and is at 87% capacity. Those numbers dwarf the non-Chinese production. In fact, 

even if the non-Chinese producers were working at 100% capacity, the production numbers would 

fall far short of satisfying the U.S. consumer demand. 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 15 of 17

Furthermore, ATG’s own capacity could not be ramped up quickly enough to cover 

customer demand. Without our facilities in China, we will not be able to provide the high-quality

products to our customers at the prices they can afford. Ironically, our foreign competitors that 

can avoid the 25% tariff will likely benefit from ATG’s loss of market share.
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 16 of 17

VII. Exclusion Proposal

As established above, the tool holders at issue are not high-tech products that are 

strategically important to or related to the “Made in 2025” or any other Chinese industrial 

programs. Moreover, China has never sought our technology for these items. Furthermore, they 

are not commercially available outside of China in quantities sufficient to meet consumer demand 

and the imposition of an additional 25% tariff will cause serious economic harm to ATG, its retail 

customers, and American consumers. For these reasons, ATG respectfully requests that the tool 

holders described below be excluded from Annex A: 

“Handheld Nonelectric Micrometer Torque Wrenches (classified in 8466.10.0175).”

CBP’s enforcement of this exclusion request is very simple not only from a quick visual 

examination of the imported merchandise but from a review of import paperwork, for which the 
Ambassador Lighthizer

Office of the United States Trade Representative

October 5, 2018

Page 17 of 17

invoices will always describe the imported items by name and with an additional reference to this

10-digit classification number: 8466.10.0175, HTSUS. 

VIII. Conclusion

Based upon the foregoing, ATG respectfully request that the subject items be excluded 

from Annex A, which is the final list of items subject to the additional 25% tariffs if imported from 

China.

Very truly yours, 

Thomas Pifer

Director, Global Customs Compliance

Apex Tool Group, LLC

14600 York Road, Suite A

Sparks, MD 21152

Thomas.Pifer@apextoolgroup.com