[Federal Register Volume 85, Number 47 (Tuesday, March 10, 2020)]
[Notices]
[Pages 13970-13973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05000]


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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: On August 20, 2019, at the direction of the President, the 
U.S. Trade Representative determined to modify the action being taken 
in the investigation by imposing additional duties of 10 percent ad 
valorem on goods of China with an annual trade value of approximately 
$300 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 additional duties on 
products in List 1, which is set out in Annex A of that action, became 
effective on September 1, 2019. On August 30, 2019, 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 action announced in the August 20 notice from 10 percent 
to 15 percent. On January 22, 2020, the U.S. Trade Representative 
determined to reduce the rate from 15 percent to 7.5 percent. The U.S. 
Trade Representative initiated a product exclusion process in October 
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. The U.S. Trade Representative 
will continue to issue decisions on pending requests on a periodic 
basis.

DATES: The product exclusions announced in this notice will apply as of 
September 1, 2019, the effective date of the $300 billion action, and 
will extend to September 1, 2020.

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 24, 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 49153 
(September 28, 2018), 84 FR 20459 (May 9, 2019), 84 FR 43304 (August 
20, 2019), 84 FR 45821 (August 30, 2019), 84 FR 57144 (October 24, 
2019), 84 FR 69447 (December 18, 2019), and 85 FR 3741 (January 22, 
2020).
    In a notice published August 20, 2019, the U.S. Trade 
Representative, at the direction of the President, announced a 
determination to modify the action being taken in the Section 301 
investigation by imposing an additional 10 percent ad valorem duty

[[Page 13971]]

on products of China with an annual aggregate trade value of 
approximately $300 billion. 84 FR 43304 (August 20, 2019) (the August 
20 notice). The August 20 notice contains two separate lists of tariff 
subheadings, with two different effective dates. List 1, which is set 
out in Annex A of the August 20 notice, was effective September 1, 
2019. List 2, which is set out in Annex C of the August 20 notice, was 
scheduled to take effect on December 15, 2019.
    On August 30, 2019, the U.S. Trade Representative, at the direction 
of the President, determined to modify the action being taken in the 
investigation by increasing the rate of additional duty from 10 to 15 
percent ad valorem on the goods of China specified in Annex A and Annex 
C of the August 20 notice. See 84 FR 45821. On October 24, 2019, the 
U.S. Trade Representative established a process by which U.S. 
stakeholders could request exclusion of particular products classified 
within an 8-digit Harmonized Tariff Schedule of the United States 
(HTSUS) subheading covered by List 1 of the $300 billion action from 
the additional duties. See 84 FR 57144 (the October 24 notice). 
Subsequently, the U.S. Trade Representative announced a determination 
to suspend until further notice the additional duties on products set 
out in Annex C of the August 20 notice. See 84 FR 69447 (December 18, 
2019). The U.S. Trade Representative later determined to further modify 
the action being taken by reducing the additional duties for the 
products covered in Annex A of the August 20 notice from 15 percent to 
7.5 percent. See 85 FR 3741 (January 22, 2020).
    Under the October 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 $300 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, among other 
information. 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 October 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 October 24 notice required submission of requests for exclusion 
from List 1 of the $300 billion action no later than January 31, 2020, 
and noted that the U.S. Trade Representative periodically would 
announce decisions. This notice contains the first set of exclusion 
from List 1 of the $300 billion action. 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-2019-0017.

B. Determination To Grant Certain Exclusions

    Based on the evaluation of the factors set out in the October 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 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 
requests.
    As set out in the Annex, the exclusions are reflected in 8 10-digit 
HTSUS subheadings, which cover 59 separate exclusion requests.
    In accordance with the October 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 10-digit 
HTSUS subheading as described in the Annex, and not by the product 
descriptions set out in any particular request for exclusion.
    As stated in the October 24 notice, the exclusions will apply from 
September 1, 2019, the effective date of the $300 billion action, and 
will extend for one year to September 1, 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. 2020-05000 Filed 3-6-20; 4:15 pm]
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