[Federal Register Volume 85, Number 52 (Tuesday, March 17, 2020)]
[Notices]
[Pages 15244-15249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05451]


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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 Section 301 investigation of China's acts, policies, and 
practices related to technology transfer, intellectual property, and 
innovation by imposing additional duties of 10 percent ad valorem on 
goods of China with an annual trade value of approximately $300 
billion. 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

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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, 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), 85 FR 3741 (January 22, 2020), and 85 FR 13970 (March 10, 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 on 
products of China with an annual aggregate trade value of approximately 
$300 billion. 84 FR 43304 (August 20, 2019) (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 (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 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. In March 2020, the U.S. Trade Representative 
granted an initial set of exclusion requests. See 85 FR 13970. The 
Office of the United States Trade Representative regularly updates the 
status of each pending request on the Exclusions Portal at https://exclusions.ustr.gov/s/docket?docketNumber=USTR-2019-0017.

B. Determination To Grant Certain Exclusions

    Based on 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 19 
specially prepared product descriptions, which cover 39 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.

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    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. 2020-05451 Filed 3-16-20; 8:45 am]
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