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

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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?

PUBLIC VERSION
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).

PUBLIC VERSION
I .111~· Qf1ic,•s 

191 N. \~·acker Drive 

Suite 3700 

Chicago, IL 

60606-1698 

312-569-1000 

312-569-3000 fax 

www.drinkcrbiddlc.com 

CALIFORNIA 

Dt;:l.AWAR.E 

ILLINOIS 

LONDON 

NEW JERSEY 

NEW\'ORK 

PEN NSYLVANIA 

T EXAS 

WASHINGTON D .C. 

E.~t"blisl,,d 1849 

The Honorable Robert E. Lighthizer 

United State Trade Representative 

October 9, 2018 

Office of the United States Trade Representative 

600 17th Street NW 

Washington, DC 20508 

Nicob Guzman 

312-569-1 101 Direct 

312-569-3000 Fax 

Nicolas.C uilman@dbr.com 

Re: Addendum to Request for Exclusion of Particular Products from the 

Determination of Action Pursuant to Section 301 

This letter is submitted by Babcock and Wilcox SPIG Inc. ("B&W SPIG" or "the 

Company") pursuant to the Procedures to Consider Requests for Exclusion of Particular 

Products from the Determination of Action Pursuant to Section 301 as set forth in docket 

number USTR-2018-0025-0001. The information contained herein is an addendum to the 

individual product exclusion form, and is intended to address questions set forth in the 

procedures described above. For reference, this addendum pertains to certain heat 

exchanger fin tube bundles, particularly K-bundles and D-Bundles, that are used with the 

Company's air-cooled condenser heat exchange units, which the Company imports from 

China. These products are classified as parts of heat exchanger units in subheading 

8419 .90.3000 of the Harmonized Tariff Schedule of the United States ("HTSUS"). The 

following discussion addresses specific information that is requested in the Federal 

Register Notice published on July 11 , 2018 (83 Fed. Reg. 32181) concerning the three 

questions provided and responded to below. 

Consistent with USTR's request, we request confidential treatment for information 

designated as business confidential in this submission. Such information consists of 

information that would not customarily be released to the public, including business or 

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DrinkerBiddle~F11 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 2 

trade secrets regarding production costs and processes, product characteristics, and other 

sale-related business secrets, and the names of individuals or organizations that provided 

price, cost, and other market information. Business confidential information is indicated 

in the text below via single brackets ("[ ]"). Release of this information, including the 

identity of the submitter, would cause irreparable harm to the submitter. A public version 

of this Request is also being filed with all confidential information redacted. 

Subiect Fin Tube Bundles 

The products that are the subject of this Request are fin tube bundles used with 

B&W SPIG's Air-Cooled Condenser Heat Exchange Units. Air-cooled condensers are 

used in industrial applications that require heat transfer, serving to cool and condense steam 

that results from industrial processes in power plants, waste-to-energy plants, chemical and 

petrochemical plants, and oil refineries. Air cooled condensers can have a variety of design 

elements, but in general terms, they function by taking the steam discharge from the plant 

and passing it through a series of tube bundles, which maintain a lower temperature usually 

by the use of fans that create air circulation over the tubes. As the cool air lowers the 

temperature of the tube bundles, the steam condenses and travels down the tubes, to be 

collected at the bottom of the air cooled condenser as water. The water is then collected in 

the air cooled condenser and depending on the system, may be transferred back to the plant 

to be used in productive industrial processes. 

Fin tube bundles are a vital part of the air cooled condenser system. As imported, 

the fin tube bundles consist of carbon steel tubes with aluminum cladding and aluminum 

fins, and include the tube sheet holding the tubes in bundles. They are specifically designed 

PUBLIC VERSION
DrinkerBiddle~af11 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 3 

for connection to the steam distribution header, through which the steam generated from 

the industrial plant is directed and is condensed based on the cool air that is being 

transferred to the surface of the fin tube bundles. Some fin tube bundles have an integral 

carbon steel manifold attached to the tube sheet on one end, which collects and directs the 

condensate. While imported as an assembled article, the fin tube bundles are a 

subassembly of the air cooled condenser and are not the complete air cooled condenser 

heat exchange unit. 

The fin tubes bundles are manufactured using a particular fining machine. The 

machine is controlled by a programmable logic controller, with touch screen control and 

process monitoring, that guarantees the required fin geometry and tolerance. The machine 

also includes a telemetric link to monitor, measure and transmit data from the machine to 

the technicians. The fin tube bundles are processed through five stages of tube cleaning: 

1) pre-wash; 2) agitation cycle; 3) high pressure wash; 4) clean water cycle; and 5) drying 

cycle. The products are run through a controlled atmospheric brazing process, which is 

controlled by B& W SPIG technicians who have more than 20 years of experience handling 

this technology. All the fin tube bundles are inspected and tested to ensure that only tubes 

that meet the Company's high standards are assembled to the bundles. 

The tube sheet is manufactured by in a multi-axis numerical machine center 

operated by the Company's own team of technicians. This process ensures dimensional 

accuracy within 0.04mm. The Company's competitors, on the other hand, use a press 

punching process that cannot guarantee such dimensional accuracy. Each sheet is 

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DrinkerBiddle~f11 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page4 

examined in order to meet the Company's high standard through a dye penetrating testing 

method. 

Once the fin tubes are assembled to the heat exchange units, the complete bundle 

is tested for any leaks under water. This testing is conducted for 30 minutes to guarantee 

that the sheet welds and the tubes are free from defect. The bundles are then covered in 

protective casing and prepared for shipment, and stored in the Company's warehouse. 

Pictures of the fin tube bundles are below: 

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DrinkerBiddle~ath ~ 'i: L P 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 5 

I. Whether the particular product is available only from China? In addressing 

this factor, requestors should address specifically whether the particular 

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

States and/or in third countries. 

B&W SPIG's fin tube bundles can only feasibly be supplied in the capacity needed 

from China. There are no domestic suppliers of the fin tube bundles. The Company's only 

direct competitors for these products are foreign companies based in South Korea and 

India. As a practical matter, the B&W SPIG will not be able to source the products from 

its own competitors in South Korea and India. These competitors will not try to alleviate 

the Company's difficulty in sourcing the products, but will rather take advantage of the 

Company's inability to source the products from anywhere else. This is not a suitable 

business alternative. 

Given that there are no other suppliers, other than our competitors, the only way to 

supply these fin tube bundles would be to build a factory outside China. However, such 

an endeavor would be cost prohibitive. [ 

]. This, though, pales in comparison to the amount it would cost 

to build a new factory without the aforementioned machinery and equipment cost. [ 

] Further, the labor and regulatory 

hurdles would alone be insurmountable. The Company knows of no party that has the 

ability to attempt such an endeavor. 

As stated above, because there are no domestic suppliers for the Company to obtain 

fin tube bundles. It would also be economically futile for any company to attempt to build 

PUBLIC VERSION
DrinkerBiddle~aF11 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 6 

up a manufacturing facility in the United States for these products. As mentioned above 

for a new facility to be built in a foreign country outside China, it would cost upwards of 

[ ] to build such a facility in the United States. These costs do not take into 

effect the additional, significant regulatory and labor issues that the Company would face. 

The above mentioned issues would render any attempt to build a facility that can 

sufficiently supply the Company the subject products futile. 

For these reasons, there is currently no way for B&W SPIG to source the subject 

products from outside China, whether it be from a third country or the United States. The 

imposition of an additional 25 percent tariff on these products will be debilitating to the 

Company. As such, we urge USTR to grant B&W SPIG the Section 301 exclusion 

requested herein. 

II. Whether the imposition of additional duties on the particular product would 

cause severe economic harm to the requestor or other U.S. interests? 

The imposition of 25 percent in additional duties on B&W SPIG is detrimental to 

the Company, its customers, and consumers. The prime beneficiaries of manufacturing 

such fin tube bundles for air cooled condenser units in China are the United States economy 

and B&W SPIG employees in the U.S. who service the heat exchanger platform sales and 

installations. These fin tube bundle imports play an important role in maintaining the 

competitive advantage the Company has over foreign competitors. The unavailability of 

alternative sourcing in the U.S., combined with the potential imposition of a 25 percent 

duty on Chinese origin imports, will have a significantly detrimental effect on B& W 

SPIG's U.S. business and workforce. 

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DrinkerBiddle~ath ~ 'r L p 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 7 

[ 

[ 

Further, from July 6, 2018 to July 6, 2019, the Company projects approximately 

] This is a significant amount 

of business for the Company and the increased costs on these fin tube bundles would be 

catastrophic to the Company. As an example, B&W SPIG has deliverable dates coming 

up on [ ] for specific contracts. These contracts 

are entered into based on the Company's representation that it can supply its U.S. 

customers. As it stands, with the imposition of these additional tariffs, the Company will 

not be able to supply its U.S. customers at the levels required under the contract. The 

Company's inability to supply its U.S. customers is a material breach of the Company's 

contractual obligations which will result in the Company owing significant liquidated 

damages. These liquidated damages are estimated to cost the Company approximately 

PUBLIC VERSION
DrinkerBiddle~tli ~ 'r'\ p 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 8 

[ ]. The Company's foreign competitors are the only parties who would 

benefit from these additional tariffs. 

The extraordinary penalties the Company faces from these additional tariffs, and 

the inability to obtain these products elsewhere will impact the Company, its employees, 

and the Company's U.S. customers. For these reasons, imposition of these additional 

duties would cause a significant economic harm to the Company and other U.S. interests. 

As such, we urge USTR to grant B&W SPIG an exclusion from the Section 301 additional 

tariffs requested herein. 

III. Whether the particular product is strategically important or related to "Made 

in China 2025" or other Chinese industrial programs? 

B&W SPIG's fin tube bundles are not at all included as part of China's "Made in 

China 2025" initiative. Imposing additional tariffs on fin tube bundle imports from China 

would be ineffective in achieving the goals of the Section 301 investigation. 

As an initial matter, the products in question are primarily manufactured in China 

by a company ("Shanxi") of which the majority owner is B&W SPIG. The Company has 

a supermajority stake - 60 percent - in Shanxi. As such, B&W SPIG has a controlling 

interest in Shanxi. In fact, at the inception of Shanxi, the Company itself bought Chinese 

property to grow capacity and production quality. Shanxi is in no way affiliated with or 

set up to benefit the Chinese government. It was neither forced upon B& W SPIG, nor does 

it benefit from Chinese government subsidies. The Company is not in any respect a State 

Owned Enterprise. 

PUBLIC VERSION
DrinkerBiddle~ath ""'t.'L l p 

The Honorable Robert E. Lighthizer 

October 9, 2018 

Page 9 

The products produced by Shanxi in China are not subject to forced intellectual 

property or technology transfers. The Company's research and development ("R&D") 

activities occur exclusively in the U.S., and thus, these products do not pose a threat to U.S. 

R&D activities in the industry. Design activities mainly involve dimensional fit 

requirements, which do vary from project to project, but would not be considered 

proprietary or sensitive information. 

Importantly, the single row fin tube bundle technology at issue is 20 year old 

technology that bas been produced by using virtually the same basic design for the last 20 

years. The particular technology at issue for heat exchanger products is not subsidized as 

part of China's "J\.1ade in China 2025" initiative. The main focus of that initiative with 

respect to industrial applications relates to innovative, breakthrough technologies in the 

areas of green manufacturing or high-end development, not the mature technology at issue 

in this request. 

For these reasons, the subject imports are not strategically important or related to 

China's "Made in China 2025" initiative or other Chinese industrial programs. As such, 

we urge USTR to grant B&W SPIG the exclusion requested herein. 

Very truly yours, 

Drinker Biddle & Reath LLP 

Nicolas Guzman 

PUBLIC VERSION