[Federal Register Volume 90, Number 206 (Tuesday, October 28, 2025)]
[Notices]
[Pages 48733-48736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-19679]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket Nos. USTR-2025-0007, USTR-2025-0020]
Initiation of Section 301 Investigation: China's Implementation
of Commitments Under the Phase One Agreement; Notice of Hearing; and
Request for Public Comments
AGENCY: Office of the United States Trade Representative (USTR).
[[Page 48734]]
ACTION: Notice of initiation of investigation and hearing, and request
for comments.
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SUMMARY: In light of the Government of China's apparent failure to
comply with the January 15, 2020, Economic and Trade Agreement Between
the Government of the United States of America and the Government of
the People's Republic of China (Phase One Agreement), at the direction
of the President, the United States Trade Representative has initiated
an investigation to determine whether the rights of the United States
under the Phase One Agreement are being denied or an act, policy, or
practice of China violates, or is inconsistent with, the provisions of,
or otherwise denies benefits to the United States under, the Phase One
Agreement. The Section 301 Committee is holding a public hearing in
this investigation and solicits public comment on China's
implementation of the Phase One Agreement and potential actions to
address these issues.
DATES:
October 24, 2025: The U.S. Trade Representative initiated the
investigation.
October 31, 2025: USTR will open dockets for submission of written
comments and requests to appear at the hearing.
December 1, 2025, at 11:59 p.m. EST: To be assured of
consideration, submit written comments by this date.
December 1, 2025, at 11:59 p.m. EST: To be assured of
consideration, submit requests to appear at the hearing, along with a
summary of testimony by this date.
December 16, 2025: The Section 301 Committee will convene a public
hearing, beginning at 10:00 a.m., either virtually or at a location to
be announced. If necessary, the hearing may continue on the next
business day.
Seven calendar days after the last day of the public hearing: Due
date for submission of post-hearing rebuttal comments.
ADDRESSES: Submit documents in response to this notice, including
written comments, hearing appearance requests, summaries of testimony,
and post-hearing rebuttal comments through the appropriate online USTR
portal at: https://comments.ustr.gov/s/.
FOR FURTHER INFORMATION CONTACT: For procedural questions concerning
comments or participating in the public hearing, contact the USTR
Section 301 support line at (202) 395-5725. Direct all other questions
regarding this notice to Philip Butler, Chair of the Section 301
Committee, or Susie Park Hodge, Associate General Counsel, at (202)
395-5725.
SUPPLEMENTARY INFORMATION:
I. Background
On August 18, 2017, the United States Trade Representative (Trade
Representative) initiated an investigation under section 301 of the
Trade Act of 1974, as amended (Trade Act) (19 U.S.C. 2411), to
determine whether the acts, policies, and practices of the Government
of China related to technology transfer, intellectual property (IP),
and innovation are unreasonable or discriminatory and burden or
restrict U.S. commerce. See 82 FR 40213. Based on the information
obtained during the investigation, on March 22, 2018, the Trade
Representative released the Findings of the Investigation Into China's
Acts, Policies, and Practices Related to Technology Transfer,
Intellectual Property, and Innovation under Section 301 of the Trade
Act, determining that China employed a series of technology transfer-
related acts, policies, and practices that are unreasonable or
discriminatory and burden or restrict U.S. commerce. In a notice
published on April 6, 2018 (83 FR 14906), the Trade Representative
announced a determination that the acts, policies, and practices of the
Government of China covered in the investigation are unreasonable or
discriminatory and burden or restrict U.S. commerce, and are thus
actionable under Section 301(b) of the Trade Act.
Following a period of public notice and comment, the Trade
Representative determined to take action under Section 301 in the form
of additional duties of 25 percent ad valorem on certain subheadings of
the Harmonized Tariff Schedule of the United States (HTSUS), with an
approximate annual trade value of $34 billion (List 1), effective July
6, 2018, and proposed further action. See 83 FR 28710 (June 20, 2018).
The Trade Representative later determined to take additional action by
imposing additional duties of 25 percent ad valorem on subheadings with
an approximate annual trade value of $16 billion (List 2), effective
August 23, 2018. See 83 FR 40823 (August 16, 2018).
The Trade Representative subsequently modified these actions,
pursuant to authority under Section 307(a) of the Trade Act. (19 U.S.C.
2417(a)). In response to China's imposing retaliatory tariffs on U.S.
goods, the Trade Representative, at the direction of the President,
determined that the initial actions were no longer appropriate and
modified the actions by imposing additional duties of 10 percent ad
valorem on additional subheadings with an approximate annual trade
value of $200 billion (List 3), increasing to 25 percent ad valorem on
January 1, 2019. See 83 FR 47974 (September 21, 2018). On December 19,
2018, the Trade Representative, at the direction of the President,
determined to delay the increase to 25 percent for products covered by
List 3 to March 2, 2019, noting that the United States was engaging
with China with the goal of obtaining the elimination of the acts,
policies, and practices covered in the Section 301 investigation, and
the parties had agreed to continue negotiating. See 83 FR 65198
(December 18, 2019). Subsequently, the Trade Representative, at the
direction of the President, determined to further delay the increase
until further notice. See 84 FR 7966 (March 5, 2019).
On May 9, 2019, citing the lack of progress in negotiations with
China and China's retreat from certain commitments, the Trade
Representative, at the direction of the President, determined to
increase the rate of additional duty for products covered by List 3 to
25 percent. See 84 FR 20459. Additionally, the Trade Representative, at
the direction of the President, invited public comment on modifying the
actions taken in the Section 301 investigation by imposing up to an
additional 25 percent ad valorem duty on products of China under
additional subheadings, with an annual trade value of approximately
$300 billion. See 84 FR 22564 (May 17, 2019) (May 17, 2019 notice).
On August 20, 2019, the Trade Representative, at the direction of
the President, determined to modify the action further by imposing an
additional 10 percent ad valorem duty on products of China with an
annual aggregate trade value of approximately $300 billion. See 84 FR
43304 (August 20, 2019) (August 20, 2019 notice). The tariff
subheadings subject to the 10 percent additional ad valorem duties were
separated into two lists with different effective dates. The list in
Annex A had an effective date of September 1, 2019 (List 4A). The list
in Annex C had an effective date of December 15, 2019 (List 4B).
Citing the lack of progress in negotiations with China and China's
retaliatory tariffs, the Trade Representative, at the direction of the
President, determined to increase the rate of the additional duty
applicable to the tariff subheadings included in the August 20, 2019
notice from 10 percent to 15 percent. See 84 FR 45821 (August 30, 2019)
(August 30, 2019 notice). Months later, citing progress in the
[[Page 48735]]
negotiations with China, and specifically the signing of the Economic
and Trade Agreement between the Government of the United States of
America and the Government of the People's Republic of China (Phase One
Agreement) on December 13, 2019, the Trade Representative, at the
direction of the President, determined to suspend indefinitely the
imposition of the additional 15 percent duty on products covered by
List 4B. See 84 FR 69447 (December 18, 2019) (December 18, 2019
notice). In light of the scheduled entry into force of the Phase One
Agreement, on January 22, 2020, the Trade Representative, at the
direction of the President, determined that the modification announced
on August 20, 2019, as modified by the August 30, 2019 notice, was no
longer appropriate and determined to reduce the level of additional
duties on products of List 4A from 15 percent to 7.5 percent, effective
February 14, 2020. See 85 FR 3741 (January 22, 2020 notice).
The Phase One Agreement was a momentous step towards a more fair
and reciprocal trade relationship with China and a key success of
President Trump's first term. It required China to make structural
changes to correct distortive acts, policies, and practices in the
areas of IP, technology transfer, agriculture, and financial services.
Given the persistent and large bilateral U.S. trade deficit with China,
the Phase One Agreement also committed China to make substantial
additional purchases of U.S. goods and services.
Unfortunately, five years following entry into force, China's lack
of compliance with the Phase One Agreement appears to have undermined
the conditions of competition for U.S. companies seeking to trade with
and operate in China. Despite U.S. engagement with China to address
these implementation concerns over the last five years, China appears
not to have lived up to its commitments under the Phase One Agreement,
including commitments on IP, forced technology transfer, agriculture,
and financial services. Additionally, although China committed to
purchasing certain specified values of U.S. goods and services in
calendar years 2020 and 2021, totaling more than $535 billion, official
U.S. export data appears to show that China's purchases fell short by
more than $217 billion in the aggregate and across almost all of its
purchase commitments.
II. Initiation of Section 301 Investigation
Section 302(b) of the Trade Act authorizes the Trade Representative
to initiate an investigation to determine whether conduct is actionable
under section 301 of the Trade Act. Actionable conduct under section
301(a) includes, inter alia, that the rights of the United States under
any trade agreement are being denied or that an act, policy, or
practice of a foreign country violates, or is inconsistent with, the
provisions of, or otherwise denies benefits to the United States under,
any trade agreement.
On October 24, 2025, in accordance with the specific direction of
the President, the Trade Representative initiated a section 301
investigation to determine whether the rights of the United States
under the Phase One Agreement are being denied or an act, policy, or
practice of China violates, or is inconsistent with, the provisions of,
or otherwise denies benefits to the United States under, the Phase One
Agreement.
Pursuant to section 302(b)(1)(B), the Trade Representative
consulted with the appropriate advisory committees. The Trade
Representative also consulted with the inter-agency Section 301
Committee. Pursuant to section 303(a) of the Trade Act, the Trade
Representative has requested consultations with the Government of the
People's Republic of China.
Pursuant to section 304 of the Trade Act, the Trade Representative
must determine whether the act, policy, or practice under investigation
is actionable under section 301. Upon determining that U.S. rights
under a trade agreement are being denied, section 301(a) provides that
the Trade Representative shall take all appropriate and feasible action
authorized under section 301(c), subject to the specific direction, if
any, of the President regarding such action, and all other appropriate
and feasible action within the power of the President that the
President may direct the Trade Representative to take to enforce such
rights.
This investigation initially will focus on China's implementation
of the Phase One Agreement and whether China has fully implemented its
commitments under the Agreement. In addition, the investigation will
examine the burden or restriction on U.S. commerce resulting from any
non-implementation by China of its commitments under the Phase One
Agreement, and what action, if any, should be taken in response.
III. Request for Public Comments
USTR invites interested persons to submit written comments or oral
testimony on any issue covered by the investigation. In particular,
USTR invites comments regarding:
Whether non-implementation by China of its commitments
under the Phase One Agreement denies rights of the United States or an
act, policy, or practice of China denies benefits to the United States.
China's implementation of its commitments under the Phase
One Agreement, including concrete examples of non-implementation of
specific commitments.
Any estimate of the burden or restriction on U.S. commerce
resulting from any non-implementation by China of its commitments under
the Phase One Agreement.
What action, if any, should be taken to address these
issues, including:
[cir] The level and scope, if any, of duties on products of China.
[cir] The level and scope, if any, of fees or restrictions on
services of China.
[cir] The level and scope, if any, of import restrictions on
products of China.
The appropriate aggregate level of trade to be covered by
any additional duties on products of China, fees or restrictions on
services of China, or import restrictions on products of China.
To be assured of consideration, USTR must receive written comments
by 11:59 p.m. EST on December 1, 2025, in accordance with the
instructions in section V below.
IV. Hearing Participation
The Section 301 Committee will convene a public hearing on December
16, 2025, either virtually or at a location to be announced, beginning
at 10:00 a.m. Persons wishing to appear at the hearing must provide
written notification of their intention and a summary of the proposed
testimony by 11:59 p.m. EST on December 1, 2025, in accordance with the
instructions in section V below. Remarks at the hearing are limited to
five minutes to allow for possible questions from the Section 301
Committee.
Post-hearing rebuttal comments, which should be limited to
rebutting or supplementing testimony presented at the hearing, may be
submitted within seven calendar days after the last day of the public
hearing, in accordance with the instructions in section V below.
V. Submission Instructions
Interested persons must submit written comments, requests to appear
at the hearing, summaries of testimony, and post-hearing rebuttal
comments using the appropriate docket on the portal at https://comments.ustr.gov/s/.
[[Page 48736]]
To submit written comments, including post-hearing rebuttal comments,
use the docket on the portal entitled `Request for Comments on the
Section 301 Investigation of China's Implementation of Commitments
under the Phase One Agreement,' docket number USTR-2025-0007.
Interested persons wishing to provide testimony at the hearing must
submit a notification of intent and summary of testimony using the
docket entitled `Request to Appear at the Hearing on the Section 301
Investigation of China's Implementation of Commitments under the Phase
One Agreement,' docket number USTR-2025-0020.
You do not need to establish an account to submit comments or a
notification of intent to testify. The first screen 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 and identify the
primary point of contact for the submission.
Fields with a gray Business Confidential Information (BCI) notation
are for BCI information 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/s/
.
Jennifer Thornton,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2025-19679 Filed 10-27-25; 8:45 am]
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