[Federal Register Volume 84, Number 152 (Wednesday, August 7, 2019)]
[Notices]
[Pages 38717-38718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16886]


=======================================================================
-----------------------------------------------------------------------

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Product Exclusions: China's Acts, Policies, and 
Practices Related to Technology Transfer, Intellectual Property, and 
Innovation

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of product exclusions.

-----------------------------------------------------------------------

SUMMARY: Effective September 24, 2018, the U.S. Trade Representative 
(Trade Representative) imposed additional duties on goods of China with 
an annual trade value of approximately $200 billion (the $200 billion 
action) as part of the action in the Section 301 investigation of 
China's acts, policies, and practices related to technology transfer, 
intellectual property, and innovation. The Trade Representative's 
subsequent modification in May 2019 included a decision to establish a 
product exclusion process. The Trade Representative initiated the 
exclusion process in June 2019, and stakeholders have submitted 
requests for the exclusion of specific products. This notice announces 
the Trade Representative's determination to grant certain exclusion 
requests, as specified in the Annex to this notice. The Trade 
Representative will continue to issue decisions on pending requests on 
a periodic basis.

DATES: The product exclusions announced in this notice will apply as of 
the September 24, 2018 effective date of the $200 billion action, and 
will extend for one year after the publication of this notice. U.S. 
Customs and Border Protection will issue instructions on entry guidance 
and implementation.

FOR FURTHER INFORMATION CONTACT: For general questions about this 
notice, contact Assistant General Counsels Philip Butler or Megan 
Grimball, or Director of Industrial Goods Justin Hoffmann at (202) 395-
5725. For specific questions on customs classification or 
implementation of the product exclusions identified in the Annex to 
this notice, contact [email protected].

SUPPLEMENTARY INFORMATION: 

A. Background

    For background on the proceedings in this investigation, please see 
the prior notices issued in the investigation, including 82 FR 40213 
(August 23, 2017), 83 FR 14906 (April 6, 2018), 83 FR 28710 (June 20, 
2018), 83 FR 33608 (July 17, 2018), 83 FR 38760 (August 7, 2018), 83 FR 
47974 (September 21, 2018), 83 FR 49153 (September 28, 2018), 83 FR 
65198 (December 19, 2018), 84 FR 7966 (March 5, 2019), 84 FR 20459 (May 
9, 2019), and 84 FR 29576 (June 24, 2019).
    Effective September 24, 2018, the Trade Representative imposed 
additional 10 percent duties on goods of China classified in [5,745] 8-
digit subheadings of the Harmonized Tariff Schedule of the United 
States (HTSUS), with an approximate annual trade value of $200 billion. 
See 83 FR 47974. The Trade Representative's subsequent modification 
increased the additional duty to 25 percent and decided to establish a 
process by which U.S. stakeholders may request exclusion of particular 
products classified within an 8-digit HTSUS subheading covered by the 
$200 billion action from the additional duties. See 84 FR 20459. The 
Trade Representative issued a notice setting out the process for the 
product exclusions, and opened a public docket. See 84 FR 29576 (the 
June 24 notice).
    Under the June 24 notice, requests for exclusion had to identify 
the product subject to the request in terms of the physical 
characteristics that distinguish the product from other products within 
the relevant 8-digit subheading covered by the $200 billion action. 
Requestors also had to provide the 10-digit subheading of the HTSUS 
most applicable to the particular product requested for exclusion, and 
could submit information on the ability of U.S. Customs and Border 
Protection to administer the requested exclusion. Requestors were asked 
to provide the quantity and value of the Chinese-origin product that 
the requestor purchased in the last three years. With regard to the 
rationale for the requested exclusion, requests had to address the 
following factors:
     Whether the particular product is available only from 
China and specifically whether the particular product and/or a 
comparable product is available from sources in the United States and/
or third countries.
     Whether the imposition of additional duties on the 
particular product would cause severe economic harm to the requestor or 
other U.S. interests.
     Whether the particular product is strategically important 
or related to ``Made in China 2025'' or other Chinese industrial 
programs.

The June 24 notice stated that the Trade Representative would take into 
account whether an exclusion would undermine the objective of the 
Section 301 investigation.

    The June 24 notice required submission of requests for exclusion 
from the $200 billion action no later than September 30, 2019, and 
noted that the Trade Representative would periodically announce 
decisions. The Office of the United States Trade Representative 
regularly updates the status of each pending request and posts the 
status within the web pages for the respective tariff action they apply 
to at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions.

B. Determination To Grant Certain Exclusions

    Based on the evaluation of the factors set out in the June 24 
notice, which are summarized above, pursuant to sections 301(b), 
301(c), and 307(a) of the Trade Act of 1974, as amended, and in 
accordance with the advice of the interagency Section 301 Committee, 
the Trade Representative has determined to grant the product exclusions 
set out in the Annex to this notice. The Trade Representative's 
determination also takes into account advice from advisory committees 
and any public comments on the pertinent exclusion requests.
    As set out in the Annex to this notice, the exclusions are 
reflected in 10 specially prepared product descriptions,

[[Page 38718]]

which cover 15 separate exclusion requests.
    In accordance with the June 24 notice, the exclusions are available 
for any product that meets the description in the Annex, regardless of 
whether the importer filed an exclusion request. Further, the scope of 
each exclusion is governed by the scope of the product descriptions in 
the Annex to this notice, and not by the product descriptions set out 
in any particular request for exclusion.
    Paragraph A, subparagraphs (3)-(5) are conforming amendments to the 
HTSUS reflecting the modification made by the Annex to this notice.
    As stated in the June 24 notice, the exclusions will apply as of 
the September 24, 2018 effective date of the $200 billion action, and 
extend for one year after the publication of this notice. U.S. Customs 
and Border Protection will issue instructions on entry guidance and 
implementation.
    The Trade Representative will continue to issue determinations on 
pending requests on a periodic basis.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.

Annex

    A. Effective with respect to goods entered for consumption, or 
withdrawn from warehouse for consumption, on or after 12:01 a.m. 
eastern daylight time on September 24, 2018, subchapter III of chapter 
99 of the Harmonized Tariff Schedule of the United States (HTSUS) is 
modified:
    1. By inserting the following new heading 9903.88.13 in numerical 
sequence, with the material in the new heading inserted in the columns 
of the HTSUS labeled ``Heading/Subheading'', ``Article Description'', 
and ``Rates of Duty 1-General'', respectively:

----------------------------------------------------------------------------------------------------------------
                                                                             Rates of duty
                                                     -----------------------------------------------------------
 Heading/ subheading        Article description                          1
                                                     ----------------------------------------          2
                                                            General             Special
----------------------------------------------------------------------------------------------------------------
``9903.88.13........  Articles the product of China,  The duty provided   ..................  ..................
                       as provided for in U.S. note    in the applicable
                       20(p) to this subchapter,       subheading''
                       each covered by an exclusion
                       granted by the U.S. Trade
                       Representative.
----------------------------------------------------------------------------------------------------------------

    2. By inserting the following new U.S. note 20(p) to subchapter III 
of chapter 99 in numerical sequence:
    ``(p) The U.S. Trade Representative determined to establish a 
process by which particular products classified in heading 9903.88.03 
and provided for in U.S. notes 20(e) and (f) to this subchapter could 
be excluded from the additional duties imposed by heading 9903.88.03. 
See 83 FR 47974 (September 21, 2018) and 84 FR 29576 (June 24, 2019). 
Pursuant to the product exclusion process, the U.S. Trade 
Representative has determined that the additional duties provided for 
in heading 9903.88.03 shall not apply to the following particular 
products, which are provided for in the enumerated statistical 
reporting numbers:

(1) Container units of plastics, each comprising a tub and lid 
therefore, configured or fitted for the conveyance, packing, or 
dispensing of wet wipes (described in statistical reporting number 
3923.10.9000)
(2) Injection molded polypropylene plastic caps or lids each weighing 
not over 24 grams designed for dispensing wet wipes (described in 
statistical reporting number 3923.50.0000)
(3) Kayak paddles, double ended, with shafts of aluminum and blades of 
fiberglass reinforced nylon (described in statistical reporting number 
3926.90.3000)
(4) High tenacity polyester yarn not over 600 decitex (described in 
statistical reporting number 5402.20.3010)
(5) Nonwovens weighing more than 25 g/m\2\ but not more than 70 g/m\2\ 
in rolls, not impregnated coated or covered (described in statistical 
reporting number 5603.92.0090)
(6) Pet cages of steel (described in statistical reporting number 
7323.99.9080)
(7) Carts, not mechanically propelled, each with three or four wheels, 
of the kind used for household shopping (described in statistical 
reporting number 8716.80.5090)
(8) Truck trailer skirt brackets, other than parts of general use of 
Section XV (described in statistical reporting number 8716.90.5060)
(9) Inflatable boats, other than kayaks and canoes, with over 20 gauge 
polyvinyl chloride (PVC), each valued at $500 or less and weighing not 
over 52 kg (described in statistical reporting number 8903.10.0060)
(10) Inflatable kayaks and canoes, with over 20 gauge polyvinyl 
chloride (PVC), each valued at $500 or less and weighing not over 22 kg 
(described in statistical reporting number 8903.10.0060)''

    3. by amending the last sentence of the first paragraph of U.S. 
note 20(e) to subchapter III of chapter 99 by inserting after the 
phrase ``imposed by heading 9903.88.03'':
    ``, except products of China granted an exclusion by the U.S. Trade 
Representative and provided for in heading 9903.88.13 and U.S. note 
20(p) to subchapter III of chapter 99'';
    4. by amending the first sentence of U.S. note 20(f) to subchapter 
III of chapter 99 by inserting after the phrase ``the following 8-digit 
subheadings'' the following phrase:
    ``, except products of China granted an exclusion by the U.S. Trade 
Representative and provided for in heading 9903.88.13 and U.S. note 
20(p) to subchapter III of chapter 99''; and
    5. by amending the Article Description of heading 9903.88.03:
    a. by deleting ``''Articles the product of China,'' and
    b. by inserting in lieu thereof: ``Except as provided in heading 
9903.88.13, articles the product of China,''.

[FR Doc. 2019-16886 Filed 8-6-19; 8:45 am]
 BILLING CODE 3290-F9-P