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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

document, or is a public version of a BCI document.

3.

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

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5. Requestor's relationship to the product:

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the HTSUS item number associated with your product, see https://hts.usitc.gov/

1

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VERSION 1

Requestor Information

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8. Is this product, or a comparable product, available from sources in the United States?:

VERSION 1

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that you purchased for each calendar year specified. Limit this figure to the products

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JUNKER & NAKACHI, P.C.

ONE MARKET SPEAR TOWER; SUITE 3600

SAN FRANCISCO, CA 94105

(415) 498-0070

WWW.TRADELAWCOUNSEL.COM

MATT NAKACHI

(213) 458-2602

NAKACHI@TRADELAWCOUNSEL.COM

October 9, 2018 

Via Reglations.gov

The Honorable Robert E. Lighthizer 

United States Trade Representative 

Office of the U.S. Trade Representative 

600 17th Street, N.W. 

Washington, DC 20508 

Re: Section 301 Investigation: China’s Acts, Policies, and Practices Related to 

Technology Transfer, Intellectual Property, and Innovation / Request For Exclusion 

From Additional 301 Duties

Dear Ambassador Lighthizer:

On behalf of Gatekeeper Systems, Inc. (“Gatekeeper”), we provide this request for exclusion from 

additional duties on imports of unique parts for a retail cart-pushing machine (called the 

CartManager) from China.1

I. SUMMARY 

Gatekeeper is an American industry leader in retail cart-pushing machine (called the 

CartManager) which is used by retailers for safer and faster cart collection. The CartManager

allows a single employee to retrieve up to thirty (30) carts at one time. CartManager saves 

retailers time and money by reducing cart collection time and labor hours by up to 50%, and it 

improves employee safety by mitigating overexertion and the hazards associated with cart 

collection in parking lots. 

• The tariffs will cause substantial economic loss to Gatekeeper and will impact other U.S. 

interests. For many existing Gatekeeper customers, the tariff costs cannot be fully, or 

even partially, offset by raising prices because CartManager sales are based on multi-year 

customer contracts with price limitations. For new customers, increased price points may 

limit Gatekeeper's competitiveness and drive business to Gatekeeper’s competitors, some 

of which are foreign. The chain reaction created by 301 tariffs will severely impact our 

U.S.-based company, while also harming other U.S. retail businesses. 

• It is not immediately possible to re-source the CartManager component parts away from 

China, where Gatekeeper has spent ten (10) years building out our supply chain. We 

 

1

See, Docket USTR-2018-0025, Procedures to Consider Requests for Exclusion of Particular Products from the 

Determination of Action Pursuant to Section 301. 83 Fed. Reg. 32181 (July 11, 2018).

Docket No. USTR-2018-0025 

PUBLIC VERSION OF BUSINESS 

CONFIDENTIAL INFORMATION
Gatekeeper Systems, Inc

Request for a 301 Tariff Exclusion

October 9, 2018

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Junker & Nakachi | www.TradeLawCounsel.com

would lose nearly all profits on new unit sales by resourcing to the United States, and

would significantly impair competitiveness by outsourcing to another foreign country. 

• The CartManager is created using existing mechanical parts. It is not related to, or 

supportive of China’s “Made in China 2025,” or other industrial policies.

II. BACKGROUND

Gatekeeper is an American company, founded in 1998 on the principles of innovation, quality, 

and service. Twenty years later, over 5 million carts, 51 countries, and 47 of the top 50 retailers 

globally are protected by Gatekeeper’s suite of integrated and easy to use product lines. We offer 

retailers intelligent cart solutions and innovative technology to reduce asset and labor 

expenditures. Specifically, our CartManager products serve to optimize labor and reduce 

employee accidents, liabilities and claims. Parking lots are a hazardous place for retail customers 

and employees and loose carts present a persistent accident threat. Employees manually 

maneuvering chains of shopping carts are slow and vulnerable to accidents with faster moving 

vehicles. Manual cart collection is often limited to ten (10) carts at a time due to the weight of 

large amounts of carts and danger of musculoskeletal injuries. According to the Bureau of Labor 

Statistics, “one in three workplace injuries are form over exertion.” The Occupational Safety and 

Health Administration (“OSHA”) acknowledges the ergonomic risk factors associated with cart 

retrieval. OSHA regulations require employers to identify and correct job hazards associated with 

manual cart retrieval. 

Gatekeeper’s solution is the CartManager, a remote and hand operated motorized cart pusher. 

Carts are daisy chained together and driven by CartManager with employees steering the chain 

from the front while using the remote. CartManager features a 3.0 horsepower (“HP”) motor, 

eight (8) hour battery life, safety brakes for emergency stops, and a high visibility light for safety 

awareness. CartManager helps employees clear parking lots of carts faster while increasing 

safety and reducing labor hours. With greater control and visibility offered by the CartManager, 

the risk of parking lot accidents is greatly reduced. Powered by the 3 HP motor, employees can 

collect up to three (3) times more carts while having a significantly lower risk of injury. Labor 

hours associated with cart collection can be reduced by 50%, freeing employees to focus on other 

retail needs such as customer service. Unfortunately, continued production and distribution of 

CartManager is threatened due to the added financial burdens created by section 301 tariffs. 

III. SECTION 301 TARIFFS CREATE SEVERE ECONOMIC HARM TO CARTMANAGER 

PRODUCTION AND A DETRIMENTAL IMPACT TO U.S. BUSINESS INTERESTS 

Imposing section 301 tariffs on CartManager products would have a severe economic impact on 

our company because we face near total profit loss on new unit sales of existing contracts should 

we re-source in the United States and increasing prices on new customer sales may cause us to 

lose business to competitors, some of which are foreign. This will result in job loss for our 

American employees. In addition, section 301 policies create the inadvertent threat of harm to 

other U.S. retail businesses, as the CartManager product allows retailers to collect shopping carts 

more efficiently. 
Gatekeeper Systems, Inc

Request for a 301 Tariff Exclusion

October 9, 2018

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Junker & Nakachi | www.TradeLawCounsel.com

A. Section 301 Tariffs Will Eliminate Profits on CartManager Products 

CartManager sales represent [ ]% of our company’s total product sales and has a contribution 

margin of [ ]%. CartManager is viewed as a commodity to our new and existing customers. 

The sales we generate from this product help us stimulate additional business for other product 

lines and services. Consequently, we do not have the ability to increase pricing on new 

CartManager sales without creating a harmful ripple effect throughout our entire business model. 

In addition, the tariff costs cannot be fully, or even partially, offset by raising prices because the 

majority of CartManager new unit sales are based on multi-year customer contracts with price 

limitations. 

Without an option to offset our costs, the added tariffs will decrease margins by [ ]%, resulting in 

a decreased segment contribution of $[ ]. 

B. American Workers Suffer Job Loss Unless CartManager Products Receive Exclusions 

from Section 301 Tariffs 

Gatekeeper employs [ ] CartManager employees at our Arlington, Texas assembly facility. Our 

American CartManager workforce represents over $[ ] in wages and benefits. Section 301 

poses impending instability to our CartManager product line, which contributes a meaningful 

percentage of Gatekeeper’s total product sales. The loss associated with CartManager profit 

contributions will not only impair CartManager employment, but may also affect our remaining 

U.S. employee base due to the negative impact on the company’s overall financial performance. 

C. Subjecting CartManager Products to Section 301 Tariffs Will Have a Harmful Impact 

on Gatekeeper's U.S. Retailer Customer

Subjecting CartManager to 301 tariffs will also harm our customers, mainly U.S. retailers. U.S. 

brick-and-mortar businesses are already suffering from eCommerce competitors that can reach 

consumers directly from China or anywhere else in the world. CartManager is an asset and labor 

protection solution. It helps brick-and-mortar retailers keep business costs down by mitigating 

employee and customer injuries related to cart collection and parking lot accidents. It also creates 

an efficient solution that cuts labor costs by up to 50% and allows employees more time to spend 

in other areas of the business, such as customer service. Raising the production cost of 

CartManager and passing those costs to retailers will offset some of the cost-savings the product 

provides to other U.S. businesses. 

IV. IT IS NOT IMMEDIATELY POSSIBLE TO RELOCATE PRODUCTION OF CARTMANAGER 

PRODUCTS TO THE U.S. OR ANOTHER THIRD-COUNTRY

Manufacturing CartManager in the United States or another third-country is not immediately 

possible due to a lack of economically sustainable options and the time-intensive process 

required. 
Gatekeeper Systems, Inc

Request for a 301 Tariff Exclusion

October 9, 2018

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Junker & Nakachi | www.TradeLawCounsel.com

We currently manufacture and import parts for the CartManager from our China-based supply 

chain. The imported Chinese parts are then assembled by American workers at our Arlington, 

Texas facility to maintain quality assurance and keeps jobs here in the U.S. We are currently 

working on sourcing the CartManager frame parts from other countries of origin, including the 

U.S., Mexico, and Malaysia. Unfortunately, these options have proven economically unsound. 

We have gathered price quotations from our former U.S. suppliers, whose price is approximately [ 

] % higher than our current China-based supply chain. This means that relocating frame and 

powder coat production to the U.S. would eliminate nearly all of the gross profit in selling a new 

CartManager unit. Similarly, price quotations from Mexico-based suppliers are approximately [ 

] % higher than our current China-based supply chain. These relocation options create 

unsustainable profit margins for CartManager units and would impede our ability to compete as 

an industry leader [ ]. 

Further, the time-consuming process of relocation makes it impossible for Gatekeeper to move 

our entire supply chain elsewhere in a matter of months. The USTR released its first Notice and 

proposed list of section 301 tariff lines in April of this year, and it began effectuating the 25% 

duties on those products on July 6, 2018. This left affected companies with merely three months 

to completely relocate production to avoid the hefty tariff. The development of Gatekeeper’s 

supply chain has been a slow and systematic process. We have spent the last ten (10) years 

building our China supply chain and refining our quality and testing procedures. This endeavor 

not only provides significant financial incentives through reduced production costs, but also 

allows us to operate independent from Chinese joint ventures or other business, and without 

disclosure requirements imposed by the Chinese government. It takes time to unravel and 

relocate an effort that has taken a decade to establish. The process is so time-consuming, due in 

part to the tooling and fixturization required to begin production and the testing required to 

qualify a finished product. In addition, moving the supply chain to a new country of origin will

require investment in human infrastructure to support quality control, testing and logistics. We 

are, however, investigating alternate sources and estimate that it will take approximately twelve 

(12) months to move the supply chain if we are successful in finding another country of origin 

with the requisite infrastructure and price points. An exclusion from 301 tariffs will allow us the 

time to relocate our China supply chain without risking the economic stability of CartManager 

products or the loss of competitiveness in a market where our U.S. company is the leader. 

V. CONCLUSION

Subjecting CartManager products to section 301 tariffs erodes our American company’s incentive 

to continue market participation in an industry where we are the market leader. The tariffs will 

cause substantial economic loss to Gatekeeper and will create a harmful impact on our U.S. 

retailer customers as well. It is not immediately possible to relocate the CartManager supply 

chain from China, where Gatekeeper has spent ten (10) years establishing it. For the forgoing 

reasons, we respectfully request that the agency extend an exemption to Gatekeeper on tariffs 

levied against its CartManager products under section 301. 
Gatekeeper Systems, Inc

Request for a 301 Tariff Exclusion

October 9, 2018

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Junker & Nakachi | www.TradeLawCounsel.com

We appreciate your consideration of this request. Should further questions arise, please feel free 

to contact the undersigned directly via telephone (415) 498-0070, or alternatively, via email at 

matt.nakachi@TradeLawCounsel.com.

Cordially yours,

JUNKER & NAKACHI, P.C.

Matt Nakachi, Esq.

Attorneys for Gatekeeper Systems, Inc
Certification Statement

The undersigned certifies that the information provided in this submission (USTR-2018-0025) is 

complete and correct to the best of my knowledge.

I certify in writing that disclosure of the confidential version of this document would endanger 

trade secrets or profitability of the company, and that this information is not customarily released 

to the public.

October 9, 2018

Matt Nakachi, Esq, 

JUNKER & NAKACHI, P.C. 

One Market Street; Suite 3600

San Francisco, CA 94105
EXHIBIT A


EXHIBIT B