[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