[Federal Register Volume 89, Number 103 (Tuesday, May 28, 2024)]
[Notices]
[Pages 46252-46293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11634]
=======================================================================
-----------------------------------------------------------------------
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket Number USTR-2024-0007]
Request for Comments on Proposed Modifications and Machinery
Exclusion Process in Four-Year Review of Actions Taken in the Section
301 Investigation: China's Acts, Policies, and Practices Related to
Technology Transfer, Intellectual Property, and Innovation
AGENCY: Office of the United States Trade Representative (USTR).
ACTION: Request for comments.
-----------------------------------------------------------------------
SUMMARY: In a notice published on September 8, 2022, USTR announced
that the July 6, 2018 and August 23, 2018 actions, as modified, in the
section 301 investigation of China's Acts, Policies, and Practices
Related to Technology Transfer, Intellectual Property, and Innovation
did not terminate on their four-year anniversary dates and would
continue. The notice also announced that the U.S. Trade Representative
would conduct a review
[[Page 46253]]
of the actions. In connection with that review, and at the specific
direction of the President, the U.S. Trade Representative is proposing
modifications to the actions by adding or increasing ad valorem rates
of duty, as directed by the President, for certain products of China in
strategic sectors. In addition, the U.S. Trade Representative is
proposing subheadings eligible for an exclusion process by which
interested persons may request that particular machinery used in
domestic manufacturing be temporarily excluded from these tariffs. The
U.S. Trade Representative also is proposing to modify the actions by
granting 19 temporary exclusions for certain solar manufacturing
equipment. The products subject to these proposed modifications and the
products being proposed for the exclusion process are set out in
annexes to this notice. USTR is seeking public comments regarding the
proposed modifications and exclusion process.
DATES: May 29, 2024, at 12:01 a.m. EDT: The public docket on the web
portal at https://comments.ustr.gov will open for interested persons to
submit comments.
June 28, 2024, at 11:59 p.m. EST: To be assured of consideration,
submit written comments on the public docket by this date.
ADDRESSES: You must submit all comments through the online portal:
https://comments.ustr.gov.
FOR FURTHER INFORMATION CONTACT: Philip Butler and Megan Grimball,
Chairs of the Section 301 Committee, (202) 395-5725.
SUPPLEMENTARY INFORMATION:
A. Background
On August 24, 2017, the U.S. Trade Representative initiated an
investigation into certain acts, policies, and practices of the
Government of China related to technology transfer, intellectual
property, and innovation under section 301 of the Trade Act of 1974, as
amended (Trade Act) (19 U.S.C. 2411). See 82 FR 40213. In a notice
published on April 6, 2018, the U.S. Trade Representative determined
that acts, policies, and practices of the Government of China related
to technology transfer, intellectual property, and innovation were
unreasonable or discriminatory, and burdened or restricted U.S.
commerce, and thus were actionable under section 301(b) of the Trade
Act (19 U.S.C. 2411(b)). See 83 FR 14906.
Following a notice and comment process on the proposed action to be
taken in the investigation, the U.S. Trade Representative took two
actions under section 301 of the Trade Act: the July 6, 2018 action,
covering an approximate annual trade value of $34 billion (List 1), and
the August 23, 2018 action, covering an approximate annual trade value
of $16 billion (List 2). See 83 FR 28710 (July 6, 2018 action) and 83
FR 40823 (August 23, 2018 action). These actions subsequently were
modified by imposing additional duties on supplemental lists of
products, known as Lists 3 and 4, as well as by the temporary removal
of duties on certain products through product exclusions.
On May 5, 2022, USTR announced that under section 307(c)(2) of the
Trade Act (19 U.S.C. 2417(c)(2)), the July 6, 2018 and August 23, 2018
actions, as modified, were subject to possible termination on their
respective four-year anniversary dates (i.e., July 6, 2022, and August
23, 2022, respectively) and of the opportunity for representatives of
domestic industries that benefit from the trade actions to request
continuation of the actions during the last 60 days of such four-year
periods. See 87 FR 26797.
On September 8, 2022, USTR announced that the July 6, 2018 and
August 23, 2018 actions, as modified, would remain in effect because at
least one representative of a domestic industry that benefits from each
action submitted to the U.S. Trade Representative a request for
continuation of the actions. See 87 FR 55073. The notice also announced
that in accordance with section 307(c)(3) of the Trade Act (19 U.S.C.
2417(c)(3)), the U.S. Trade Representative would conduct a review of
the July 6, 2018 and August 23, 2018 actions, as modified. See 87 FR
55073.
To aid in this review, on November 15, 2022, USTR opened a docket
for interested persons to submit comments with respect to a number of
considerations concerning the review. See 87 FR 62914. USTR received
approximately 1,500 comments.
Pursuant to section 307(c)(3) of the Trade Act (19 U.S.C.
2417(c)(3)), and based on information obtained during the review,
including the written submissions, USTR, in consultation with the
Section 301 Committee, prepared a comprehensive report that included
findings on the effectiveness of the July 6, 2018 and August 23, 2018
actions, as modified, in achieving the objectives of the investigation,
other actions that could be taken, and the effects of such actions on
the United States economy, including consumers. The report, Four-Year
Review of Actions Taken in the Section 301 Investigation: China's Acts,
Policies, and Practices Related to Technology Transfer, Intellectual
Property, and Innovation (the Report), was published on May 14, 2024,
and is available on the USTR website at https://ustr.gov/sites/default/files/05.14.2024%20Four%20Year%20Review%20of%20China%20Tech%20Transfer%20Section%20301%20(Final).pdf. The Report is incorporated into this notice by
reference.
As detailed in the Report, the U.S. Trade Representative has found
that:
[ssquf] The section 301 actions have been effective in encouraging
China to take steps toward eliminating some of its technology transfer-
related acts, policies, and practices, and have reduced some of the
exposure of U.S. persons and businesses to these technology transfer-
related acts, policies, and practices.
[ssquf] China has not eliminated many of its technology transfer-
related acts, policies, and practices, which continue to impose a
burden or restriction on U.S. commerce. Instead of pursuing fundamental
reform, China has persisted, and even become more aggressive,
particularly through cyber intrusions and cybertheft, in its attempts
to acquire and absorb foreign technology, which further burden or
restrict U.S. commerce.
[ssquf] Economic analyses generally find that the duties have had
small negative effects on U.S. aggregate economic welfare, positive
impacts on U.S. production in the ten sectors most directly affected by
the duties, and minimal impacts on economy-wide prices and employment.
[ssquf] Economic analyses, including the principal U.S. Government
analysis published by the U.S. International Trade Commission,
generally find that the Section 301 tariffs have contributed to
reducing U.S. imports of goods from China and increasing imports from
alternate sources, including U.S. allies and partners, thereby
potentially supporting U.S. supply chain diversification and
resilience.
Based on these findings, the U.S. Trade Representative recommended
to the President that section 301 tariffs on covered products be
maintained. To further encourage China to eliminate the investigated
acts, policies, and practices, the U.S. Trade Representative
recommended enhancing the effectiveness of the tariff actions by adding
or increasing section 301 tariffs on certain products in strategic
sectors. The proposed modification includes products targeted by China
for dominance, or are products in sectors where the United States has
recently made significant investments.
[[Page 46254]]
Taking into consideration the U.S. Trade Representative's findings
and recommendations, on May 14, 2024, the President issued a Memorandum
that directed the U.S. Trade Representative to: ``maintain, as
appropriate and consistent with this memorandum, the ad valorem rates
of duty and lists of products subject to the [actions] taken under the
[s]ection 301 investigation'' and ``[t]o further encourage China to
eliminate the acts, policies, and practices at issue, and to counteract
the burden or restriction of these acts, policies, and practices, the
Trade Representative shall modify the [actions taken in the
investigation] to increase [s]ection 301 ad valorem rates of duty'' for
certain specified products of China. See https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/14/memorandum-on-actions-by-the-united-states-related-to-the-statutory-4-year-review-of-the-section-301-investigation-of-chinas-acts-policies-and-practices-related-to-technology-transfer-intellectua/. The President's Memorandum
specified categories of products for proposed tariff increases, tariff
rates for those products, and year for tariff increases.
The President also directed the U.S. Trade Representative to
establish a process by which interested persons may request that
particular machinery used in domestic manufacturing classified within a
subheading under Chapters 84 and 85 of the Harmonized Tariff Schedule
of the United States (HTSUS) be temporarily excluded from section 301
tariffs, and that the U.S. Trade Representative prioritize, in
particular, exclusions for certain solar manufacturing equipment.
B. Proposed Modifications to the Actions
Pursuant to sections 307(c) and 307(a)(1) of the Trade Act (19
U.S.C. 2417(c), (a)(1)), the U.S. Trade Representative may modify or
terminate any action, subject to the specific direction, if any, of the
President with respect to such action, that is being taken under
Section 301 if the burden or restriction on United States commerce of
the acts, policies, and practices that are the subject of such action
has increased or decreased, or such action is being taken under section
301(b) and no longer is appropriate. Section 301(c)(3)(B) of the Trade
Act (19 U.S.C. 2411(c)(3)(B)) authorizes the U.S. Trade Representative
to take action against any goods or economic sector of the foreign
country concerned regardless of whether or not such goods or economic
sector are involved in the act, policy, or practice subject to
investigation. In accordance with sections 307(c) and 307(a)(1)(B) and
(C) of the Trade Act (19 U.S.C. 2417(c), (a)(1)(B) and (C)), and in
accordance with the specific direction of the President, the U.S. Trade
Representative is proposing certain modifications to the actions.
Consistent with the President's direction to increase section 301
tariff rates on certain categories of products, included in Annex A to
this notice are 382 HTSUS subheadings and 5 statistical reporting
numbers of the HTSUS, with an approximate annual trade value of $18
billion (2023). The President has directed that increases for certain
products take effect in 2024, 2025, and 2026. The U.S. Trade
Representative is proposing that increases in 2024 be effective August
1, 2024, and that increases in 2025 and 2026 be effective January 1 of
the corresponding year.
In addition to the proposed modifications in Annex A, consistent
with the President's direction, the U.S. Trade Representative is
establishing an exclusion process by which interested persons may
request that particular machinery used in domestic manufacturing and
classified within certain subheadings under Chapters 84 and 85 of HTSUS
be temporarily excluded from section 301 tariffs. The HTSUS subheadings
eligible for consideration of temporary exclusion are set forth in
Annex B to this notice. Procedures for requesting exclusions under this
process will be published in a separate notice. Exclusions granted
through this process will be effective through May 31, 2025.
Finally, to support domestic production and decrease reliance on
China in a strategic sector, the U.S. Trade Representative is proposing
19 temporary exclusions for solar manufacturing equipment. The proposed
temporary exclusions are set forth in Annex C to this notice. The
proposed exclusions will be effective the date of this notice and
through May 31, 2025.
C. Request for Public Comments
In accordance with section 307(a)(2) of the Trade Act (19 U.S.C.
2417(a)(2)), USTR invites comments from interested persons with respect
to the proposed modifications. To be assured of consideration, you must
submit written comments by June 28, 2024.
With respect to USTR's proposed modifications to Section 301 tariff
rates on certain products from China listed in Annex A, interested
persons are invited to comment on:
[ssquf] The effectiveness of the proposed modification in obtaining
the elimination of, or in counteracting, China's acts, policies, and
practices related to technology transfer, intellectual property, and
innovation.
[ssquf] The effects of the proposed modification on the U.S.
economy, including consumers.
[ssquf] The scope of the product description to cover ship-to-shore
cranes under subheading 8426.19.00 (transporter cranes, gantry cranes
and bridge cranes).
[ssquf] With respect to facemasks, medical gloves, syringes and
needles, whether the tariff rates should be higher than the proposed
rates.
[ssquf] With respect to facemasks, whether additional statistical
reporting codes under tariff subheading 6307.90.98 should be included.
[ssquf] Whether the tariff subheadings identified for each product
and sector adequately cover the products and sectors included in the
President's direction to the U.S. Trade Representative.
With respect to the exclusion process, USTR seeks comments on
whether the subheadings listed in Annex B should or should not be
eligible for consideration in the machinery exclusion process and
whether Annex B omits certain subheadings under Chapters 84 and 85 that
cover machinery used in domestic manufacturing that should be included.
With respect to the proposed solar manufacturing machinery
exclusions in Annex C, USTR requests comments on the scope of each
exclusion, including any suggested amendments to the product
description.
In order to facilitate preparation of comments prior to the May 29
opening of the web portal, USTR intends to post a copy of questions for
the docket by May 24, 2024. The questions will be posted at https://comments.ustr.gov.
D. Procedures for Written Submissions
You must submit written comments using the appropriate docket on
the portal at https://comments.ustr.gov/. To submit written comments,
use the docket on the portal entitled Request for Comments: Proposed
Modifications to the Section 301 Actions and Proposed Exclusion
Process, docket number USTR-2024-0007.
You do not need to establish an account to submit comments. The
first screen of the docket allows you to enter identification and
contact information. Third party organizations such as law firms, trade
associations, or customs brokers, should identify the full legal name
of the organization they represent,
[[Page 46255]]
and identify the primary point of contact for the submission.
Information fields are optional; however, your comment may not be
considered if insufficient information is provided.
Fields with a gray Business Confidential Information (BCI) notation
are for BCI that will not be made publicly available. Fields with a
green (Public) notation will be viewable by the public.
After entering the identification and contact information, you can
complete the remainder of the comment, or any portion of it by clicking
`Next.' You may upload documents at the end of the form and indicate
whether USTR should treat the documents as business confidential or
public information.
Any page containing BCI must be clearly marked `BUSINESS
CONFIDENTIAL' on the top of that page and the submission should clearly
indicate, via brackets, highlighting, or other means, the specific
information that is BCI. If you request business confidential
treatment, you must certify in writing that the information would not
customarily be released to the public.
Parties uploading attachments containing BCI also must submit a
public version of their comments. If these procedures are not
sufficient to protect BCI or otherwise protect business interests,
please contact the USTR Section 301 support line at (202) 395-5725 to
discuss whether alternative arrangements are possible.
USTR will post attachments uploaded to the docket for public
inspection, except for properly designated BCI. You can view
submissions on USTR's electronic portal at https://comments.ustr.gov.
Juan Millan,
Acting General Counsel, Office of the United States Trade
Representative.
BILLING CODE 3290-F4-P
[[Page 46256]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.001
[[Page 46257]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.002
[[Page 46258]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.003
[[Page 46259]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.004
[[Page 46260]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.005
[[Page 46261]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.006
[[Page 46262]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.007
[[Page 46263]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.008
[[Page 46264]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.009
[[Page 46265]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.010
[[Page 46266]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.011
[[Page 46267]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.012
[[Page 46268]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.013
[[Page 46269]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.014
[[Page 46270]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.015
[[Page 46271]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.016
[[Page 46272]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.017
[[Page 46273]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.018
[[Page 46274]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.019
[[Page 46275]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.020
[[Page 46276]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.021
[[Page 46277]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.022
[[Page 46278]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.023
[[Page 46279]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.024
[[Page 46280]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.025
[[Page 46281]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.026
[[Page 46282]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.027
[[Page 46283]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.028
[[Page 46284]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.029
[[Page 46285]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.030
[[Page 46286]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.031
[[Page 46287]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.032
[[Page 46288]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.033
[[Page 46289]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.034
[[Page 46290]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.035
[[Page 46291]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.036
[[Page 46292]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.037
[[Page 46293]]
[GRAPHIC] [TIFF OMITTED] TN28MY24.038
[FR Doc. 2024-11634 Filed 5-24-24; 8:45 am]
BILLING CODE 3290-F4-C