[Federal Register Volume 84, Number 242 (Tuesday, December 17, 2019)]
[Notices]
[Pages 69016-69018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27070]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Product Exclusion and Amendments: 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 exclusion and amendments.

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SUMMARY: Effective July 6, 2018, the U.S. Trade Representative imposed 
additional duties on goods of China with an annual trade value of 
approximately $34 billion 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 U.S. 
Trade Representative's determination included a decision to establish a 
product exclusion process. The U.S. Trade Representative initiated the 
exclusion process in July 2018, and stakeholders have submitted 
requests for the exclusion of specific products. In December 2018, and 
March, April, May, June, July, September, and October 2019, the U.S. 
Trade Representative granted exclusion requests. This notice announces 
the U.S. Trade Representative's determination to grant an additional 
exclusion request, as specified in the Annex to this notice, and makes 
amendments to certain notes in the Harmonized Tariff Schedule of the 
United States (HTSUS). The U.S. Trade Representative will continue to 
issue decisions as necessary.

DATES: The product exclusion will apply as of the July 6, 2018 
effective date of the $34 billion action, and will extend to October 1, 
2020 at 11:59 p.m. EDT. The amendments announced in this notice are 
retroactive to the date the original exclusions were published and do 
not extend the period for the original exclusions. 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 Counsel Philip Butler 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 
40823 (August 16, 2018), 83 FR 47974 (September 21, 2018), 83 FR 65198 
(December 19, 2018), 83 FR 67463 (December 28, 2018), 84 FR 7966 (March 
5, 2019), 84 FR 11152 (March 25, 2019), 84 FR 16310 (April 18, 2019), 
84 FR 21389 (May 14, 2019), 84 FR 25895 (June 4, 2019), 84 FR 32821 
(July 9, 2019), 84 FR 49564 (September 20, 2019), and 84 FR 52567 
(October 2, 2019).
    Effective July 6, 2018, the U.S. Trade Representative imposed 
additional 25 percent duties on goods of China classified in 818 8-
digit subheadings of the HTSUS, with an approximate annual trade value 
of $34 billion. See 83 FR 28710. The U.S. Trade Representative's 
determination included a decision to establish a process by which U.S. 
stakeholders can request exclusion of particular products classified 
within an 8-digit HTSUS subheading covered by the $34 billion action 
from the additional duties. The U.S. Trade Representative issued a 
notice setting out the process for the product exclusions, and opened a 
public docket. See 83 FR 32181 (the July 11 notice).
    Under the July 11 notice, requests for exclusion had to identify 
the product subject to the request in terms of the physical 
characteristics that distinguish it from other products within the 
relevant 8-digit subheading covered by the $34 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 July 11 notice stated that the U.S. Trade Representative would take 
into account whether an exclusion would undermine the objective of the 
Section 301 investigation.
    The July 11 notice required submission of requests for exclusion 
from the $34 billion action no later than October 9, 2018, and noted 
that the U.S. Trade Representative periodically would announce 
decisions. In December 2018, the U.S. Trade Representative granted an 
initial set of exclusion requests. See 83 FR 67463. The U.S. Trade 
Representative granted additional exclusions in March, April, May, 
June, July, September, and October 2019. See 84 FR 11152, 84 FR 16310, 
84 FR 21389, 84 FR 25895, 84 FR 32821, 84 FR 49564 and 84 FR 52567.

B. Determination To Grant Certain Exclusions

    Based on the evaluation of the factors set out in the July 11 
notice, which are

[[Page 69017]]

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 U.S. Trade Representative 
has determined to grant the product exclusion set out in the Annex to 
this notice. The U.S. Trade Representative's determination also takes 
into account advice from advisory committees and any public comments on 
the pertinent exclusion request.
    Exclusions from the duties have been established in two different 
formats: (1) As an exclusion for an existing 10-digit subheading from 
within an 8-digit subheading covered by the $34 billion action, or (2) 
as an exclusion reflected in specially prepared product descriptions. 
The exclusion announced in this notice takes the form of a 10-digit 
HTSUS subheading.
    In accordance with the July 11 notice, the exclusion is available 
for any product that meets the description in the Annex, regardless of 
whether the importer filed an exclusion request. Further, the scope of 
the exclusion is governed by the scope of the 10-digit HTSUS subheading 
in the Annex to this notice, and not by the product descriptions set 
out in any particular request for exclusion.
    Paragraph A is a conforming amendment to the HTSUS reflecting the 
modification made by the Annex to this notice.

C. Amendments to Certain Exclusions

    To correct technical and ministerial errors and in order to conform 
to the U.S. Trade Representative's intent to grant certain exclusions 
requested, the Annex to this notice includes amendments to certain 
notes in the HTSUS.
    Subparagraphs B(1-5) correct errors in U.S. notes 20(q)(25), 
20(q)(26), 20(q)(201), 20(q)(235) and 20(q)(252) to subchapter III of 
chapter 99 of the HTSUS, as set out in the Annex of the notice 
published at 84 FR 49564 (September 20, 2019).
    In order to conform to the U.S. Trade Representative's intent to 
grant certain exclusion requests, subparagraphs B(6-7) of the Annex 
make amendments to U.S. notes 20(n)(11) and 20(n)(85) to subchapter III 
of chapter 99 of the HTSUS, as set out in the Annex of the notice 
published at 84 FR 32821 (July 9, 2019). Subparagraphs B(8-14) of the 
Annex make amendments to notes 20(q)(27), 20(q)(28), 20(q)(58), 
20(q)(195), 20(q)(217), 20(q)(291) and 20(q)(293) to subchapter III of 
chapter 99 of the HSTUS, as set out in the Annex of the notice 
published at 84 FR 49564 (September 20, 2019), to conform to this 
intent.
    The U.S. Trade Representative will continue to issue determinations 
on a periodic basis as needed.

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 July 6, 2018, and before October 2, 2020, U.S. 
note 20(x) to subchapter III of chapter 99 of the Harmonized Tariff 
Schedule of the United States (HTSUS) is modified by inserting the 
following exclusion in numerical order after exclusion (92): ``(93) 
9030.90.4600''.
    B. 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 July 6, 2018:
    1. U.S. note 20(q)(25) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``Rotary compressors, each exceeding 746 W (1 horsepower) but not 
exceeding 2,984 W (4 horsepower), with a cooling capacity ranging from 
2,300 W (7,960 BTU) to 5,500 W (18,766 BTU) (described in statistical 
reporting number 8414.30.8060)'' and inserting ``Rotary compressors, 
each exceeding 746 W but not exceeding 2,238 W, with a cooling capacity 
ranging from 2.3 kW to 5.5 kW (described in statistical reporting 
number 8414.30.8060)'' in lieu thereof.
    2. U.S. note 20(q)(26) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``Rotary compressors, each exceeding 746 W (1 horsepower) but not 
exceeding 2,984 W (4 horsepower), with a cooling capacity ranging from 
750 to 1400 W (described in statistical reporting number 
8414.30.8060)'' and inserting ``Rotary compressors, each exceeding 746 
W but not exceeding 2,238 W, with a cooling capacity of 750 W or more 
but not exceeding 1.4 kW (described in statistical reporting number 
8414.30.8060)'' in lieu thereof.
    3. U.S. note 20(q)(201) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``electric transformers, static converters and''.
    4. U.S. note 20(q)(235) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``Single-pole, double-throw switches, for a voltage not exceeding 100 
V, each with a movable contact arm permitting the opening and closing 
of contact points (described in statistical reporting number 
8536.50.9065)'' and inserting ``Single-pole, double-throw switches, 
each with a movable contact arm permitting the opening and closing of 
contact points, of a rating not over 1,000 V (described in statistical 
reporting number 8536.50.9065)'' in lieu thereof.
    5. U.S. note 20(q)(252) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``of less than 1 W and an operating frequency of less than 100 MHz 
(described in statistical reporting number 8541.29.0095)'' and 
inserting ``of 1W or more (described in statistical reporting number 
8541.29.0095)'' in lieu thereof.
    6. U.S. note 20(n)(11) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``$72'' and inserting ``$96'' in lieu thereof.
    7. U.S. note 20(n)(85) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``$2.50'' and inserting ``$3.20'' in lieu thereof.
    8. U.S. note 20(q)(27) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``$250 but not over $500'' and inserting ``$200 but not over $1500'' in 
lieu thereof.
    9. U.S. note 20(q)(28) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``$500 but not over $900'' and inserting ``$200 but not over $1500'' in 
lieu thereof.
    10. U.S. note 20(q)(58) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``polymer filtration systems of a kind used to separate solid 
contaminants from liquid polymers, each valued over $30,000 but not 
over $40,000'' and inserting ``filtration or purifying machinery for 
liquid chemical polymers, of steel housing, with sintered metal 
cylindrical filters'' in lieu thereof.
    11. U.S. note 20(q)(195) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``stators and rotors, 2 or 4 pole type, valued over $4,700 but not over 
$4,900'' and inserting ``stators and rotors for electric motors and 
generators (excluding generating sets), 2 or 4 pole type, valued $85 or 
more but not over $1,700'' in lieu thereof.
    12. U.S. note 20(q)(217) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``not over $1.50'' and inserting ``at not over $4'' in lieu thereof.
    13. U.S. note 20(q)(291) to subchapter III of chapter 99 of the 
Harmonized

[[Page 69018]]

Tariff Schedule of the United States is modified by deleting ``for 
radiation therapy, affixed to the treatment table when used, each 
valued over $18 but not over $23'' and inserting ``of polycaprolactone 
for the use of immobilizing patients, during the use of alpha, beta or 
gamma radiations, for radiography or radiotherapy'' in lieu thereof.
    14. U.S. note 20(q)(293) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``$2'' and inserting ``$8.50'' in lieu thereof.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.
[FR Doc. 2019-27070 Filed 12-16-19; 8:45 am]
BILLING CODE 3290-F0-P