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 Parts 

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 submersible power cables classifiable in 

subheading 8544.60.4000 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 oblong or round submersible power cables made of galvanized or 

stainless steel, and wrapped in armor (“the Submersible Power Cables”). The Submersible 

Power Cables are designed exclusively or oil and gas extraction applications. More specifically, 

they run power downhole to submersible electric motor operating thousands of feet 

underground. The Submersible Power Cables are 4 inches wide by 2 inches tall by 8,400 feet 

long. Their main internal components include copper conductor wire, lead shielding and EPDM 

insulation. In its condition as imported, the Submersible Power Cables are assembled. Postimportation, they are connected, via cable clamps, to a power supply and to the submersible 

electric pump to which it provides power. The Submersible Power Cables are parts of artificial 

lift systems, which are large pumping machines used to extract oil and gas from the earth. 

As discussed further below, an exclusion for the Submersible Power Cables 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 Submersible Power Cables 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. PESA is 

headquartered in Houston, Texas.

II. PESA Members Must Purchase Chinese-Origin Submersible Power Cables 

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 the 

Submersible Power Cables because comparable products are not currently produced in 

sufficient quantities in the United States or third countries. The oil and gas industry has slowly 

shifted to China over the past two decades in response to US trade policies, especially China's 

accession to the WTO and grant of MFN duty rate. Certain aspects of the industry have evolved 

into regionally centralized production with integration of multiple tiers of suppliers and subsuppliers and related infrastructure to move volumes efficiently. Thus, PESA’s members must 

continue to purchase these products from China.

PESA members which import the Submersible Power Cables have spent years qualifying, and 

building relationships with, certain suppliers that are proficient in producing the Submersible 

Power Cables. These products are built to industry leading performance and reliability 

standards. More specifically, they contain specific chemistries and material thickness which 

allows the Submersible Power Cables to function in extreme well conditions (i.e., pressure and 

temperatures). While substitute products are not currently 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 (approximately 12 months) for members to develop alternative sourcing strategies. 

Approving this product exclusion request will afford PESA members the additional time needed 

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 

Submersible Power Cables. The effect will be two-fold. First, it will be economically infeasible 

for our members to continue importing the Submersible Power Cables 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 the Submersible Power Cables 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 Submersible Power Cables 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 Submersible Power Cables cannot be 

considered products of strategic importance to China’s industrial policies. The Submersible 

Power Cables are, as compared with the high-tech sector products identified in the “Made in 

China 2025” plan,5devoid of advanced technology or software. In light of China’s goal to higher 

 

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 
technology manufacturing, the Submersible Power Cables are not strategically important 

products for China and the additional duty on imports of these Submersible Power Cables 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 Submersible Power Cables

PESA proposes the following language for the Submersible Power Cables:

Submersible cables, incorporating copper conductor wire and shielding made of 

galvanized or stainless steel, used solely or principally with artificial lift systems 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 Submersible Power Cables 

by their descriptions on the shipping documentation. Further, the products are visually 

identifiable as power cables.

VI. Conclusion

Comparable Submersible Power Cables are not currently available in 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 Submersible Power Cables do not 

incorporate advanced technology or software. As such, these products 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

 

equipment. U.S. Chamber of Commerce, Made in China 2025: Global Ambitions Built on Local Protections 10 

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