[Federal Register Volume 85, Number 24 (Wednesday, February 5, 2020)]
[Notices]
[Pages 6674-6687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02225]


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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.

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SUMMARY: In September of 2018, the U.S. Trade Representative imposed 
additional duties on goods of China with an annual trade value of 
approximately $200 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 initiated a product exclusion process in June 
2019, and interested persons have submitted requests for the exclusion 
of specific products. This notice announces the U.S. Trade 
Representative's determination to grant certain exclusion requests, as 
specified in the Annex to this notice, and corrects technical errors in 
previously announced exclusions.

DATES: The product exclusions announced in this notice will apply as of 
September 24, 2018, the effective date of the $200 billion action, to 
August 7, 2020. The amendments announced in this notice are retroactive 
to the date the original exclusions were published.

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), 84 FR 29576 (June 24, 2019), 84 FRN 38717 (August 7, 2019), 
84 FR 46212 (September 3, 2019), 84 FR 49591 (September 20, 2019), 84 
FR 57803 (October 28, 2019), 84 FR 61674 (November 13, 2019), 84 FR 
65882 (November 29, 2019), 84 FR 69012 (December 17, 2019), and 85 FR 
549 (January 6, 2020).
    Effective September 24, 2018, the U.S. Trade Representative imposed 
additional 10 percent duties on goods of China classified in 5,757 full 
and partial subheadings of the Harmonized Tariff Schedule of the United 
States (HTSUS), with an approximate annual trade value of $200 billion. 
See 83 FR 47974, as modified by 83 FR 49153. In May 2019, the U.S. 
Trade Representative increased the additional duty to 25 percent. See 
84 FR 20459. On June 24, 2019, the U.S. Trade Representative 
established 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 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 U.S. 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 U.S. Trade Representative would periodically announce 
decisions. In August 2019, the U.S. Trade Representative granted an 
initial set of exclusion requests. See 84 FR 38717. The U.S. Trade 
Representative granted additional exclusions in September 2019, October 
2019, November 2019, December 2019, and January 2020. See 84 FR 49591, 
84 FR 57803, 84 FR 61674, 84 FR 65882, 84 FR 69012, 85 FR 549. The 
Office of the United States Trade Representative (USTR) regularly 
updates the status of each pending request on the USTR Exclusions 
Portal at https://exclusions.ustr.gov/s/docket?docketNumber=USTR-2019-0005.

B. Determination To Grant Certain Exclusions

    Based on the evaluation of the factors set forth 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 U.S. Trade Representative has determined to grant the product 
exclusions set forth 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 
requests.
    As set forth in the Annex, the exclusions are reflected in 2 10-
digit HTSUS subheadings, which cover 52 requests, and 117 specially 
prepared product descriptions, which cover 156 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, and not by the product descriptions found in any particular 
request for exclusion.
    Subparagraphs A(3-7) of the Annex contain conforming amendments to 
the HTSUS reflecting the modifications made by the Annex. Paragraph B 
of the Annex contains amendments reflecting technical corrections to 
the specially prepared product descriptions in certain notes to the 
HTSUS, specifically U.S.

[[Page 6675]]

note 20(ll)(26), published at 84 FR 57803 (October 29, 2019), and U.S. 
note 20(nn)(20), published at 84 FR 61674 (November 13, 2019).
    As stated in the September 20, 2019 notice, the exclusions will 
apply from September 24, 2018, to August 7, 2020. U.S. Customs and 
Border Protection will issue instructions on entry guidance and 
implementation.
    The U.S. 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.
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[FR Doc. 2020-02225 Filed 2-4-20; 8:45 am]
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