[Federal Register Volume 84, Number 170 (Tuesday, September 3, 2019)]
[Notices]
[Pages 46212-46417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18946]



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Vol. 84

Tuesday,

No. 170

September 3, 2019

Part V





Office of the United States Trade Representative





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Request for Comments Concerning Proposed Modification of Action 
Pursuant to Section 301: China's Acts, Policies, and Practices Related 
to Technology Transfer, Intellectual Property, and Innovation; Notice

  Federal Register / Vol. 84 , No. 170 / Tuesday, September 3, 2019 / 
Notices  

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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2019-0015]


Request for Comments Concerning Proposed Modification of Action 
Pursuant to Section 301: China's Acts, Policies, and Practices Related 
to Technology Transfer, Intellectual Property, and Innovation

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments.

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SUMMARY: In accordance with the specific direction of the President, 
the U.S. Trade Representative proposes to modify the action being taken 
in this investigation by increasing the rate of additional duty from 25 
percent to 30 percent on the products of China currently subject to 
tariff actions first taken in June, August, and September 2018, with an 
aggregate annual trade value of approximately $250 billion. The 
products subject to this proposed modification are specified in prior 
notices, and for the convenience of the public also are set out in the 
Annexes to this notice. The Office of the U.S. Trade Representative 
invites public comment on the proposed modification.

DATES: 
    September 20, 2019: To be assured of consideration, submit written 
comments by September 20, 2019.
    October 1, 2019: The proposed modification would be effective on 
October 1, 2019.

ADDRESSES: Submit public comments and the public version of comments 
containing business confidential information (BCI) through the Federal 
eRulemaking Portal: http://www.regulations.gov. The docket number is 
USTR-2019-0015. Follow the instructions for submitting comments in 
sections D below. Email comments containing BCI to 
[email protected].

FOR FURTHER INFORMATION CONTACT: For questions about this proposed 
action, contact Associate General Counsel Arthur Tsao or Assistant 
General Counsel Megan Grimball, or Director of Industrial Goods Justin 
Hoffmann at (202) 395-5725. For questions on customs classification or 
implementation of additional duties on products identified in the 
Annexes to this notice, contact [email protected].

SUPPLEMENTARY INFORMATION: 

A. Prior Determinations in the Investigation

    On August 18, 2017, the U.S. Trade Representative initiated an 
investigation into certain acts, policies, and practices of the 
Government of China related to technology transfer, intellectual 
property, and innovation. 82 FR 40213 (August 23, 2017). In April 2018, 
the U.S. Trade Representative published a notice of a determination 
that the acts, policies, and practices of China under investigation are 
unreasonable or discriminatory and burden or restrict U.S. commerce, 
and are thus actionable under Section 301(b) of the Trade Act of 1974, 
as amended (Trade Act). 83 FR 14906 (April 6, 2018).
    Up through early May 2019, the U.S. Trade Representative, at the 
direction of the President, determined to take actions resulting in the 
imposition of an additional 25 percent ad valorem duty on products of 
China with an aggregate annual trade value of approximately $250 
billion in order to obtain the elimination of China's acts, policies, 
and practices covered in the investigation. As explained in prior 
notices, the actions do not relate to China's acts, policies, and 
practices involving technology licensing, which are being addressed 
separately in a WTO dispute settlement proceeding.
    The U.S. Trade Representative imposed these additional duties in 
three tranches. Tranche 1 covered 818 tariff subheadings, with an 
approximate annual trade value of $34 billion. See 83 FR 28710 (June 
20, 2018). Tranche 2 covered 279 tariff subheadings, with an 
approximate annual trade value of $16 billion. See 83 FR 40823 (August 
16, 2018). Tranche 3 covered 5,733 tariff subheadings, with an 
approximate annual trade value of $200 billion. See 83 FR 47974 
(September 21, 2018); 83 FR 49153 (September 28, 2018); and 84 FR 20459 
(May 9, 2019).
    As described below, the current notice proposes to increase the 
rate of additional duty on these three tranches from 25 percent to 30 
percent, effective October 1, 2019.
    In August 2019, the U.S. Trade Representative, at the direction of 
the President, determined to modify the action being taken in the 
investigation by imposing an additional 10 percent ad valorem duty on 
products of China with an annual aggregate trade value of approximately 
$300 billion. 84 FR 43304 (August 20, 2019). Subsequently, at the 
direction of the President, the U.S. Trade Representative determined to 
increase the rate of the additional duty applicable to the tariff 
subheadings covered by the $300 billion action from 10 percent to 15 
percent.

B. Proposed Modification of Action

    The Section 301 statute (set out in Sections 301 to 308 of the 
Trade Act) (19 U.S.C. 2411-2418) includes authority for the U.S. Trade 
Representative to modify the action being taken in an investigation. In 
particular, Section 307(a)(1) authorizes the U.S. Trade Representative 
to modify or terminate any action taken under Section 301, subject to 
the specific direction, if any, of the President, if the burden or 
restriction on United States commerce of the acts, policies, and 
practices that are the subject of the action has increased or 
decreased, or the action is being taken under Section 301(b) and is no 
longer appropriate.
    The burden or restriction on United States commerce of the acts, 
policies, and practices that are the subject of the Section 301 action 
continues to increase. China's unfair acts, policies, and practices 
include not just its technology transfer and IP policies referenced in 
the notice of initiation in the investigation, but also China's 
subsequent defensive actions taken to maintain those unfair acts, 
policies, and practices as determined in that investigation. China has 
determined to impose tariffs on a substantial majority of U.S. goods 
exported to China, with the goal of pressuring the United States to 
cease its efforts to obtain the elimination of China's unfair policies. 
China has further taken or threatened to take additional 
countermeasures, including non-tariff measures, against commerce of the 
United States. For example, China has taken concrete steps to devalue 
its currency. See https://home.treasury.gov/news/press-releases/sm751. 
Most recently, shortly following the August 2019 announcement of the 
$300 billion action, China responded by announcing further tariffs on 
U.S. goods, starting September 1, 2019. In short, instead of addressing 
the underlying problems, China has increased tariffs and adopted or 
threatened additional retaliation to further protect the unreasonable 
acts, policies, and practices identified in the investigation, 
resulting in increased harm to the U.S. economy.
    The United States is engaging with China with the goal of obtaining 
the elimination of the acts, policies, and practices covered in the 
investigation. The leaders of the United States and China met on 
December 1, 2018, and agreed to hold negotiations on a range of issues, 
including those covered in this Section 301 investigation. See https://
www.whitehouse.gov/briefings-

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statements/statement-press-secretary-regarding-presidents-working-
dinner-china. Since the meeting on December 1, 2018, the United States 
and China have engaged in additional rounds of negotiation on these 
issues, including meetings in March, April, May, and July 2019. At 
certain times in these discussions, China has offered specific 
commitments that were constructive towards reaching a resolution of 
this matter. However, China more recently has retreated from these 
commitments.
    These circumstances indicate that the action currently being taken 
is not effective in obtaining the elimination of the unfair acts, 
policies, and practices covered in the investigation, and thus that 
maintaining the current 25 percent rate of additional duty on the 
products covered by prior tariff actions, with an aggregate trade value 
of $250 billion, may no longer be appropriate.
    For these reasons, and in accordance with the specific direction of 
the President, the U.S. Trade Representative is proposing to modify the 
action being taken in this investigation by increasing the rate of 
additional duty from 25 percent ad valorem to 30 percent ad valorem on 
goods of China covered by the three prior tariff actions, with an 
approximate annual trade value of $250 billion, effective October 1, 
2019. The tariff subheadings subject to these three prior actions were 
specified in the original notices of action. See 83 FR 28710 (June 20, 
2018), 83 FR 40823 (August 16, 2018), 83 FR 47974 (September 21, 2018), 
and 83 FR 49153 (September 28, 2018). For the convenience of the 
public, the three lists of tariff subheadings also are annexed to the 
current notice. The attached Annexes include conforming changes for any 
changes in HTSUS subheadings adopted since the original publication 
date of the original notices of action.
    Any increase in the rate of additional duty will not affect 
exclusions granted under the procedures set out in the USTR exclusion 
process. See 83 FR 32181 (July 11, 2018); 83 FR 47236 (Sept. 18, 2018); 
and 84 FR 29576 (June 24, 2019).

C. Requests for Public Comments

    USTR invites comments from interested persons with respect to the 
proposed modification. To be assured of consideration, you must submit 
written comments by September 20, 2019.
    USTR requests that commenters focus specifically on the proposed 
increase in the rate of additional duty from 25 percent to 30 percent, 
with an effective date of October 1, 2019. In particular, USTR invites 
commenters to address specifically whether increasing the rate of 
additional duties on one or more subheadings listed in the Annexes 
would be practicable or effective to obtain the elimination of China's 
acts, policies, and practices, and whether increasing the rate of 
additional duties on a particular product listed in the Annexes would 
cause disproportionate economic harm to U.S. interests, including 
small- or medium-sized businesses and consumers.

D. Procedures for Written Submissions

    All submissions must be in English. All public submissions and the 
public versions of submissions containing BCI must be submitted 
electronically via www.regulations.gov. To submit comments via 
www.regulations.gov, enter docket number USTR-2019-0015 on the home 
page and click ``search.'' The site will provide a search-results page 
listing all documents associated with this docket. Find a reference to 
this notice and click on the link titled ``Comment Now!'' For further 
information on using the www.regulations.gov website, please consult 
the resources provided on the website by clicking on ``How to Use 
Regulations.gov'' on the bottom of the home page. We will not accept 
hand-delivered submissions.
    The www.regulations.gov website allows users to submit comments by 
filling in a ``Comment'' field or by attaching a document using an 
``Upload File'' field. USTR prefers that you submit comments in an 
attached document. If you attach a document, it is sufficient to type 
``see attached'' in the ``Comment'' field. USTR prefers submissions in 
Microsoft Word (.doc) or Adobe Acrobat (.pdf). If you use an 
application other than those two, please indicate the name of the 
application in the ``Comment'' field.
    File names should reflect the name of the person or entity 
submitting the comments. Please do not attach separate cover letters to 
electronic submissions; rather, include any information that might 
appear in a cover letter in the comments themselves. Similarly, to the 
extent possible, please include any exhibits, annexes, or other 
attachments in the same file as the comment itself, rather than 
submitting them as separate files.
    Do not submit comments containing BCI via www.regulations.gov. 
Instead, interested persons should email any comments containing BCI to 
[email protected]. The file name of the business 
confidential version should begin with the characters ``BC''. Any page 
containing BCI must be clearly marked ``BUSINESS CONFIDENTIAL'' on the 
top of that page and the submission should clearly indicate, via 
brackets, highlighting, or other means, the specific information that 
is business confidential. If you request business confidential 
treatment, you must certify in writing that disclosure of the 
information would endanger trade secrets or profitability, and that the 
information would not customarily be released to the public. Filers of 
submissions containing business confidential information also must 
submit a public version of their comments. The file name of the public 
version--which must be submitted on www.regulations.gov--should begin 
with the character ``P''. The ``BC'' and ``P'' should be followed by 
the name of the person or entity submitting the comments or rebuttal 
comments. If these procedures are not sufficient to protect business 
confidential information or otherwise protect business interests, 
please contact the USTR Section Hotline 301 line at (202) 395-5725 to 
discuss whether alternative arrangements are possible.
    USTR will post submissions in the docket for public inspection, 
except business confidential information. You can view submissions on 
the https://www.regulations.gov website by entering docket number USTR-
2019-0015 in the search field on the home page.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.
BILLING CODE 3290-F9-P

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BILLING CODE 3290-F9-C

[FR Doc. 2019-18946 Filed 8-29-19; 8:45 am]
BILLING CODE 3290-F9-P