China Has No Equal for Sourcing Tech Goods, Say Bose, BenQ Exclusion Requests

Tuesday was unusually heavy for List 4A tariff exclusion requests at the Office of the U.S. Trade Representative public docket, with only days remaining before the web portal for filing for exemptions closes at 11:59 p.m. Friday. We counted nearly 300 requests posted in the docket through 3 p.m. EST, well above the daily average of 40 since the portal opened for requests at noon Oct. 31. Bose filed four requests Tuesday, to go with the two it submitted Nov. 22 (see 1911220042). It’s now seeking List 4A tariff relief on the audio sunglasses (9004.10.00.00 subheading), sound bar bass modules (8518.21.00.00), TV sound systems (8518.22.00.00) and wireless in-ear Bluetooth headphones (8517.62.00.90) it imports from China. “Over the past 18 years, manufacturing of consumer electronics, including the extended supply chain (e.g., component suppliers), has coalesced in China,” said the exclusion request for the audio sunglasses, typifying the nearly identical wording in all the applications. “There is no other country that has the expertise and capacity to mass produce high-quality consumer electronics, such as the audio sunglasses covered by this request. While the Company is evaluating suppliers outside China, qualifying new suppliers to produce products to Bose’s rigorous quality and performance standards takes many months.” There exists no “mass-market production” of the digital light processing (DLP) projectors BenQ imports from China under the 8528.62.00.00 subheading, said the vendor’s request for an exclusion Tuesday from the List 4 Section 401 tariffs. “While we source certain other products from third countries, the only suppliers that have the expertise and equipment to produce this product are in China,” said BenQ. “We are exploring sourcing this product from third countries, but this requires significant time and capital investment.” BenQ sources the DLP “core imaging technology” in its projectors from Texas Instruments, it said. “This technology requires many specialized components that need to be customized for the technology. Developing alternative sources for these components is more difficult than developing alternative sources for components used in competitor products.”