[Federal Register Volume 85, Number 34 (Thursday, February 20, 2020)]
[Notices]
[Pages 9921-9925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03377]


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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 makes amendments to certain 
notes in the Harmonized Tariff Schedule of the United States (HTSUS).

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 Benjamin 
Allen, 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), 85 FR 549 
(January 6, 2020), and 85 FR 6674 (February 5, 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 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

[[Page 9922]]

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, January 
2020, and February 2020. See 84 FR 49591, 84 FR 57803, 84 FR 61674, 84 
FR 65882, 84 FR 69012, 85 FR 549, and 85 FR 6674. The Office of the 
United States Trade Representative 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 one 10-
digit HTSUS subheading, which cover 6 requests, and 46 specially 
prepared product descriptions, which cover 61 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.
    Paragraph A, subparagraphs (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. note 20(ll)(68), published at 84 
FR 57803 (October 28, 2019), U.S. note 20(mm)(6), published at 84 FR 
61674 (November 13, 2019), and U.S. note 20(nn)(30), published at 84 FR 
65882 (November 29, 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.

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 9903.88.40 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
----------------------------------------------------------------------------------------------------------------
``9903.88.40...................  Articles the product    The duty provided
                                  of China, as provided   in the
                                  for in U.S. note        applicable
                                  20(ss) to this          subheading''.
                                  subchapter, each
                                  covered by an
                                  exclusion granted by
                                  the U.S. Trade
                                  Representative.
----------------------------------------------------------------------------------------------------------------

    2. By inserting the following new U.S. note 20(ss) to subchapter 
III of chapter 99 in numerical sequence:
    ``(ss) 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, 
and by which particular products classified in heading 9903.88.04 and 
provided for in U.S. note 20(g) to this subchapter could be excluded 
from the additional duties imposed by heading 9903.88.04. 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 or in heading 9903.88.04 shall not apply to the following 
particular products, which are provided for in the enumerated 
statistical reporting numbers:

(1) 6505.00.8015
(2) Titanium dioxide (CAS No. 13463-67-7) (described in statistical 
reporting number 2823.00.0000)
(3) D-Ribose (CAS No. 50-69-1) (described in statistical reporting 
number 2940.00.6000)
(4) Mechanical articles for motor vehicles, of vulcanized rubber other 
than hard rubber, each comprising a guide or a stopper for a sunroof or 
sunshade and weighing not more than 4 g (described in statistical 
reporting number 4016.99.6010)
(5) Stuff sacks with outer surface of textiles of man-made fibers, each 
measuring 77.5 cm or more but not over 127.7 cm in circumference, 
cylindrical in shape with a single compartment, a drawstring closure at 
one end and a strap at the other end of the sack (described in 
statistical reporting number 4202.92.3131)

[[Page 9923]]

(6) Covers, of leather, designed for use with telecommunication devices 
(described in statistical reporting number 4205.00.8000)
(7) Two-layer wood flooring consisting of a non-coniferous wood veneer 
measuring at least 0.6 mm but not more than 1.2 mm in thickness 
laminated to a single-layer base of fiberboard, each board measuring at 
least 9 cm but not more than 21 cm in width, at least 35 cm but not 
more than 1.9 m in length and at least 5 mm but not more than 12 mm in 
thickness (described in statistical reporting number 4412.99.5105)
(8) Desk accessories of medium density fiberboard, painted or stained, 
including but not limited to desk organizers, letter trays, business 
card holders, incline files, pencil cups, note holders, corner shelves, 
monitor risers, magazine holders, book ends and storage caddies, each 
weighing at least 0.06 kg but not more than 5.5 kg, measuring at least 
10 cm but not more than 35 cm in length, at least 4 cm but not more 
than 43 cm in width and at least 4.5 cm or more but not more than 30 cm 
in height (described in statistical reporting number 4420.90.8000)
(9) Fabrics wholly of cotton, unbleached, plain weave, weighing not 
more than 100 g/m\2\, of numbers 43 to 68 (``cheesecloth''), 3-layer 
folded and crimped, less than 28 cm wide after folding and crimping, 
compliant with standards of Aerospace Management Services (AMS) 
(described in statistical reporting number 5208.11.4090)
(10) Fabrics wholly of cotton, bleached, plain weave, weighing not more 
than 100 g/m\2\, of numbers 43 to 68 (``cheesecloth''), compliant with 
standards of Aerospace Management Services (AMS) (described in 
statistical reporting number 5208.21.4090)
(11) Woven fabrics of synthetic filament yarn, dyed, weighing more than 
280 g/m\2\ but not more than 420 g/m\2\ (described in statistical 
reporting number 5407.92.2090)
(12) Sheeting fabrics containing less than 85 percent by weight of 
artificial staple fibers, mixed mainly or solely with cotton, such 
artificial staple fibers derived from wood, printed (described in 
statistical reporting number 5516.44.0022)
(13) Non-woven fabrics of polyethylene terephthalate (PET), in sheets 
measuring not more than 160 cm by 250 cm, weighing more than 1,800 g/
m\2\ but not more than 3,000 g/m\2\ (described in statistical reporting 
number 5603.94.9090)
(14) Fabrics wholly of polyester, warp knit, bonded to a plain weave 
backing fabric, measuring not more than 141 cm in width, weighing over 
271 g/m\2\, of a kind used to upholster furniture (described in 
statistical reporting number 6001.92.0010)
(15) Knitted or crocheted fabrics of artificial staple fibers derived 
from bamboo (described in statistical reporting number 6003.40.6000)
(16) Fabrics wholly of polyester, warp knit, printed, bonded to a woven 
backing wholly of polyester, weighing not less than 290 g/m\2\ but not 
more than 500 g/m\2\, of a kind used to upholster furniture (described 
in statistical reporting number 6005.39.0080)
(17) Portable outdoor cookers, each consisting of a burner and stand 
made from steel and cast iron, two or more pots with fitted strainer 
baskets, a rack suitable for supporting and lifting out large food 
items and an adjustable pressure regulator/hose combination for 
connecting the burner to a portable container of LP, put up for retail 
sale (described in statistical reporting number 7321.11.1060)
(18) Sewer hose supports constructed of flat strips of aluminum 
measuring 0.3 cm in thickness and riveted together to extend and 
retract accordion-style, each not exceeding 4.6 m when extended and 
weighing not more than 1.5 kg (described in statistical reporting 
number 7616.99.5150)
(19) Clamp edge components of aluminum, with injection molded clamp 
heads and levers, measuring not less than 60 cm but not more than 127 
cm in length, with extensions to 254 cm in length (described in 
statistical reporting number 7616.99.5190)
(20) Shovels of aluminum, each of adjustable length measuring not less 
than 65 cm but not more than 85 cm, weighing less than 1 kg (described 
in statistical reporting number 8201.10.0000)
(21) Automotive polishing attachments specially designed for use with a 
hand-held drill, each attachment including a 9.5 mm steel drive shaft, 
internal gear assembly, transverse hand brace and rotating disk 
components (described in statistical reporting number 8207.90.7585)
(22) Articulating video monitor wall mounting assemblies of steel and 
aluminum, each weighing not less than 4 kg but not more than 7 kg 
(described in statistical reporting number 8302.50.0000)
(23) Fuel filters for internal combustion engines, each consisting of a 
cylindrical case of plastics with an internal mesh filter measuring not 
more than 8 cm in length and not more than 5.5 cm in diameter 
(described in statistical reporting number 8421.23.0000)
(24) Digital electronic scales (other than counting scales or retail 
scales) having a maximum weighing capacity not exceeding 30 kg 
(described in statistical reporting number 8423.81.0040)
(25) Jacks of steel with zinc coating for supporting the tongues of 
trailers, each measuring not less than 60 cm in retracted condition and 
not less than 85 cm in extended condition, with a maximum width of 17 
cm and a maximum load capacity of 455 kg (described in statistical 
reporting number 8425.49.0000)
(26) Lottery ticket vending terminals, each terminal including a 
touchscreen monitor, barcode scanner, Wi-fi/Ethernet/Bluetooth 
connectivities, six USB ports, two LAN ports and two serial ports 
(described in statistical reporting number 8470.90.0190)
(27) Hand-operated flat-back gate valves of cast iron, designed for use 
with irrigation canals, diversion ditches and the like (described in 
statistical reporting number 8481.80.3010)
(28) Hand-operated spigot-back gate valves of cast iron, for irrigation 
canals, diversion ditches and the like (described in statistical 
reporting number 8481.80.3010)
(29) AC motors, single phase, each of an output exceeding 74.6 W but 
not exceeding 335 W, measuring not more than 13 cm in diameter and not 
more than 13 cm in height and with a shaft measuring not more than 39 
cm in length (described in statistical reporting number 8501.40.4040)
(30) 48 V rectifiers for telecommunications wireline and wireless 
apparatus, each with output of not less than 2,400 W but not more than 
3,000 W, measuring not more than 45 mm by 105 mm by 330 mm, weighing 
not more than 2 kg (described in statistical reporting number 
8504.40.8500)
(31) 48 V rectifiers for telecommunications wireline and wireless 
apparatus, each with output of not less than 4,000 W but not more than 
4,600 W, measuring not more than 165 mm by 95 mm by 305 mm, weighing 
not more than

[[Page 9924]]

4 kg (described in statistical reporting number 8504.40.8500)
(32) 48 V rectifiers for telecommunications wireline and wireless 
apparatus, each with output of not more than 1,200 W output, measuring 
not more than 50 mm by 90 mm by 260 mm, weighing not more than 1 kg 
(described in statistical reporting number 8504.40.8500)
(33) Power supplies for cable networks, that convert 120 V/60 Hz AC 
input to either 63 V AC or 87 V AC output, each measuring not more than 
200 mm by 425 mm by 270 mm and weighing not more than 27.5 kg, 
containing printed circuit board assemblies, a transformer, and an oil 
filled capacitor (described in statistical reporting number 
8504.40.8500)
(34) Power supplies for cable networks, that converts 120 V/60 Hz AC or 
230 V/50 Hz AC input to 63 V AC or 87 V AC output, each measuring not 
more than 220 mm by 244 mm by 200 mm and weighing not more than 12 kg 
(described in statistical reporting number 8504.40.8500)
(35) Power supplies for fiber optic communications equipment, that 
convert 120-240 V AC to 12 V DC, each measuring no more than 170 mm by 
200 mm by 115 mm and having four LED indicators (described in 
statistical reporting number 8504.40.8500)
(36) Quad output power modules with cut-outs on one side for air flow, 
each containing a printed circuit board and 4 LED indicators, with 
external dimensions measuring not more than 361 mm by 125 mm by 75 mm, 
each weighing not more than 1 kg (described in statistical reporting 
number 8504.40.8500)
(37) Power supplies with a power output exceeding 150 W but not 
exceeding 180 W, 120 V, each measuring no more than 90 mm by 395 mm by 
625 mm (described in statistical reporting number 8504.40.9530)
(38) Power supplies, each with 120 V AC input and output, measuring not 
more than 485 mm by 385 mm by 260 mm, weighing not more than 15 kg, to 
provide not more than 660 W of power in an uninterruptible manner in 
the event that a normal source of power fails (described in statistical 
reporting number 8504.40.9540)
(39) Power supplies, each with 120 V AC input and output, measuring not 
more than 530 mm by 355 mm by 205 mm, weighing not more than 20 kg, to 
provide not more than 2,000 W of power in an uninterruptible manner in 
the event that a normal source of power fails (described in statistical 
reporting number 8504.40.9540)
(40) Electrical inverters (other than rectifiers, power supplies for 
automatic data processing equipment or for telecommunications 
apparatus), each measuring not more than 190 mm by 160 mm by 255 mm, 
weighing not more than 2.5 kg (described in statistical reporting 
number 8504.40.9570)
(41) Tags for acousto-magnetic security systems (described in 
statistical reporting number 8531.90.9001)
(42) Cable lugs of copper, for a voltage not exceeding 1,000 V, each 
measuring at least 12 mm but not more than 155 mm in length (described 
in statistical reporting number 8536.69.8000)
(43) Printed circuit board assemblies, for a voltage not exceeding 
1,000 V, each measuring 3 mm by 169 mm by 137.5 mm, presented with four 
relays mounted down the center of the assembly and fitted with 
connectors (described in statistical reporting number 8537.10.9150)
(44) Electric conductors for a voltage not exceeding 300 V, insulated 
with polyvinyl chloride (PVC), each fitted with connectors, measuring 
not less than 200 mm and not more than 1.2 m in length (described in 
statistical reporting number 8544.42.9090)
(45) Toddler beds of wood, with bars to keep toddler from falling out 
(described in statistical reporting number 9403.50.9042)
(46) Fireplace mantels or surrounds of wood (described in statistical 
reporting number 9403.60.8081)
(47) Parts of office furniture, each consisting of a modular table base 
and support of base metals, with electric height adjustment mechanism, 
weighing not more than 40 kg (described in statistical reporting number 
9403.90.8041)''
    3. By amending the last sentence of the first paragraph of U.S. 
note 20(e) to subchapter III of chapter 99:
    a. By deleting the word ``or'' where it appears after the phrase 
``U.S. note 20(pp) to subchapter III of chapter 99;''; and
    b. By inserting the phrase ``; or (9) heading 9903.88.40 and U.S. 
note 20(ss) to subchapter III of chapter 99'' after the phrase ``U.S. 
note 20(qq) to subchapter III of chapter 99''.
    4. By amending U.S. note 20(f) to subchapter III of chapter 99;
    a. By deleting the word ``or'' where it appears after the phrase 
``U.S. note 20(pp) to subchapter III of chapter 99;''; and
    b. By inserting the phrase ``; or (9) heading 9903.88.40 and U.S. 
note 20(ss) to subchapter III of chapter 99'' after the phrase ``U.S. 
note 20(qq) to subchapter III of chapter 99''.
    5. By amending the first sentence of U.S. note 20(g) to subchapter 
III of chapter 99:
    a. By deleting ``or'' where it appears after ``U.S. note 20(pp) to 
subchapter III of chapter 99''; and
    b. By inserting ``; or (6) heading 9903.88.40 and U.S. note 20(qq) 
to subchapter III of chapter 99'' after ``U.S. note 20(qq) to 
subchapter III of chapter 99''.
    6. By amending the Article Description of heading 9903.88.03:
    a. By deleting ``9903.88.37 or'' and inserting ``9903.88.37'' in 
lieu thereof; and
    b. By inserting ``or 9903.88.40,'' after ``9903.88.38,''.
    7. By amending the Article Description of heading 9903.88.04:
    a. By deleting ``9903.88.37 or'' and inserting ``9903.88.37,'' in 
lieu thereof; and
    b. By inserting ``or 9903.88.40,'' after ``9903.88.38,''.
    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 September 24, 2018, subchapter III of chapter 
99 of the Harmonized Tariff Schedule of the United States (HTSUS) is 
modified:
    a. U.S. note 20(ll)(68) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``$0.50 each but not over $0.60 each'' and inserting ``$0.40 each but 
not over $0.80'' in lieu thereof.
    b. U.S. note 20(mm)(6) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``and cat leashes, collars, harnesses, retractable leashes,'' and 
inserting ``leads, collars, harnesses, retractable leads,'' in lieu 
thereof, and by deleting ``cables, stakes and aerials of iron or steel 
of various sizes, such cables, stakes and aerials presented in a form 
to be sold individually or in sets'' and inserting ``cables and 
aerials, of iron or steel'' in lieu thereof.
    c. U.S. note 20(nn)(30) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified by deleting 
``a charging pad and USB port designed for the charging of electronic 
devices'' and inserting ``a charging pad or USB port designed for

[[Page 9925]]

the charging of electronic devices'' in lieu thereof.

[FR Doc. 2020-03377 Filed 2-19-20; 8:45 am]
 BILLING CODE 3290-F0-P