[Federal Register Volume 85, Number 142 (Thursday, July 23, 2020)]
[Notices]
[Pages 44563-44571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15995]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Product Exclusions 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 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. 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, and make certain amendments to 
previously announced exclusions.

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

FOR FURTHER INFORMATION CONTACT: For general questions about this 
notice, contact Associate 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 
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), 85 FR 13970 (March 10, 2020), 85 
FR 15244 (March 17, 2020), 85 FR 17936 (March 31, 2020), 85 FR 28693 
(May 13, 2020), 85 FR 32098 (May 28, 2020), 85 FR 35975 (June 12, 
2020), and 85 FR 41658 (July 10, 2020).
    On 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 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 (List 1) 
and Annex C (List 2) of the August 20 notice. See 84 FR 45821. 
Subsequently, the U.S. Trade Representative announced determinations 
suspending until further notice the additional duties on products set 
out in Annex C (List 2) and reducing the additional duties for the 
products covered in Annex A of the August 20 notice (List 1) to 7.5 
percent. See 84 FR 69447, 85 FR 3741.
    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 eight-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). 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 eight-digit subheading covered by the $300 
billion action. Requestors also had to provide the ten-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 
objectives 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 U.S. 
Trade Representative granted additional exclusions in March, May, June 
and July 2020. See 85 FR 15244, 85 FR 17936, 85 FR 28693, as modified 
by 85 FR 32098, 85 FR 35975 and 85 FR 41658. 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 the evaluation of the factors set out in the October 24 
notice, which

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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 11 
existing ten-digit HTSUS subheadings and 53 specially prepared product 
descriptions, which together respond to 242 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 ten-digit 
HTSUS subheading as described in the Annex, and not by the product 
descriptions set out in any particular request for exclusion.
    Paragraph A, subparagraphs (3)-(4) of the Annex contain conforming 
amendments to the HTSUS reflecting the modifications made by the Annex.
    Paragraph B, subparagraphs (1)-(5) of the Annex contain technical 
corrections to address periodic revisions to the HTSUS subheadings in 
previously published exclusions.
    The U.S. Trade Representative will continue to issue determinations 
on pending requests on a periodic basis.

Joseph Barloon,
General Counsel, Office of the United States Trade Representative.

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[FR Doc. 2020-15995 Filed 7-22-20; 8:45 am]
BILLING CODE 3290-F0-P