[Federal Register Volume 83, Number 159 (Thursday, August 16, 2018)]
[Notices]
[Pages 40823-40838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17709]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Notice of Action Pursuant to Section 301: China's Acts, Policies,
and Practices Related to Technology Transfer, Intellectual Property,
and Innovation
AGENCY: Office of the United States Trade Representative.
ACTION: Notice.
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SUMMARY: The U.S. Trade Representative (Trade Representative) has
determined that appropriate action in this investigation includes the
imposition of an additional ad valorem duty of 25 percent on products
from China classified in the subheadings of the Harmonized Tariff
Schedule of the United States (HTSUS) set out in Annex A of this
notice. The Trade Representative has further determined to establish a
process by which U.S. stakeholders may request that particular products
classified within a covered tariff subheading in Annex A be excluded
from these additional duties.
DATES: The additional duties set out in Annex A to this notice are
effective with respect to products that are entered for consumption, or
withdrawn from warehouse for consumption, on or after August 23, 2018.
FOR FURTHER INFORMATION CONTACT: For questions about this action,
contact Assistant General Counsel Arthur Tsao or Director of Industrial
Goods Justin Hoffmann at (202) 395-5725. For questions on customs
classification or implementation of additional duties on products
identified in Annex A to this Notice, contact [email protected].
SUPPLEMENTARY INFORMATION:
A. Proceedings in the Investigation
On August 18, 2017, the Office of the U.S. Trade Representative
(USTR) initiated an investigation into certain acts, policies, and
practices of the Government of China related to technology transfer,
intellectual property, and innovation (82 FR 40213).
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.
The April 6 notice also invited public comment on a proposed action in
the investigation, in the form of an additional 25 percent ad valorem
duty on products from China classified in a list of 1,333 tariff
subheadings, with an annual trade value of approximately $50 billion.
As explained in that notice, the level was appropriate both in light of
the estimated harm to the U.S. economy, and to obtain elimination of
China's harmful acts, policies, and practices.
The public comment process included two opportunities for the
submission of written comments, and the opportunity to participate in a
public hearing. USTR received thousands of submissions, and held a 3-
day public hearing with more than 100 witnesses. The public versions of
submissions and a transcript of the hearing are available on
www.regulations.gov in docket number USTR-2018-0005.
USTR and the interagency Section 301 Committee carefully reviewed
the public comments and the testimony from the public hearing. USTR and
the Section 301 Committee also carefully reviewed the extent to which
the tariff subheadings in the April 6 notice include products
containing industrially significant technology, including technologies
and products related to China's ``Made in China 2025'' industrial
policy program.
Based on this review process, the Trade Representative determined
to take an initial action in the investigation, and to consider an
additional proposed action. The Trade Representative announced the
determination on June 15, 2018, and published a notice on June 20, 2018
(83 FR 28710). The Trade Representative narrowed the proposed list in
the April 6 notice to 818 tariff subheadings, with an approximate
annual trade value of $34 billion. This initial action became effective
on July 6, 2018. The additional proposed action was an additional ad
valorem duty of 25 percent on products of China classified in 284
tariff subheadings, with an annual trade value of approximately $16
billion, as set forth in Annex C to the June 20 notice. The June 20
notice further explained that including these tariff subheadings in the
Section 301 action would maintain the effectiveness of a $50 billion
trade action.
The June 20 notice invited public comment on the additional
proposed action. USTR requested that commenters address specifically
whether imposing increased duties on a particular listed subheading
would be practicable or effective to obtain the elimination of China's
acts, policies, and practices, and whether maintaining or imposing
additional duties on a particular listed product would cause
disproportionate economic harm to U.S. interests, including small or
medium-sized businesses and consumers.
In response to the notice of additional proposed action, interested
persons filed over 700 written submissions. USTR and the Section 301
Committee held a 2-day public hearing on July 24-25, 2018. During the
hearing, 82 witnesses provided testimony and responded to questions.
Interested parties also had the opportunity to provide rebuttal
submissions. The public submissions and a transcript of the hearing are
available on www.regulations.gov in docket number USTR-2018-0018.
B. Determination on Appropriate Action
USTR and the Section 301 Committee have carefully reviewed the
public comments and the testimony from the two-day public hearing. In
addition, USTR and the interagency Section 301 Committee have carefully
reviewed the extent to which the tariff subheadings in Annex C to the
June 20 notice include products containing industrially significant
technology, including technologies and products related to the ``Made
in China 2025'' program. Based on this review process, the Trade
Representative has determined to narrow the proposed tariff subheadings
in Annex C to the June 20 notice to 279 tariff subheadings. The annual
trade
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value of the final list remains approximately $16 billion.
Pursuant to sections 301(b), 301(c), and 304(a) of the Trade Act of
1974 (19 U.S.C. 2411(b), 2411(c), and 2414(a)), the Trade
Representative determines that appropriate and feasible action in this
investigation includes the imposition of an additional ad valorem duty
of 25 percent on products of China covered in the tariff subheadings
listed in Annex A to this notice. Annex B to this notice contains the
same list of tariff subheadings, with unofficial descriptions of the
types of products covered in each subheading.
In order to implement this determination, effective August 23,
2018, subchapter III of chapter 99 of the HTSUS is modified by Annex A
of this notice. Products of China that are provided for in new HTSUS
heading 9903.88.02, as established by Annex A of this notice that are
entered for consumption, or withdrawn from warehouse for consumption,
on or after 12:01 a.m. Eastern daylight time on August 23, 2018, will
be subject to an additional ad valorem duty of 25 percent. The rates of
duty applicable to products of China that are provided for in new HTSUS
heading 9903.88.02 apply in addition to all other applicable duties,
fees, exactions, and charges.
The HTSUS note in Annex A, as compared to the HTSUS note in Annex A
to the June 20 notice, includes clarifications on the application of
the additional duties to goods entered under certain provisions of
Chapter 98 and 99 of the HTSUS. Annex C to this notice modifies the
HTSUS note in Annex A to the June 20 notice in order to reflect these
clarifications. In addition, Annex C makes a conforming amendment to
the HTSUS heading in Annex A to the June 20 notice, and makes a
technical correction to the HTSUS note in Annex A to the June 20
notice.
Any product listed in Annex A to this notice, except any product
that is eligible for admission under `domestic status' as defined in 19
CFR 146.43, which is subject to the additional duty imposed by this
determination, and is admitted into a U.S. foreign trade zone on or
after 12:01 a.m. Eastern daylight time on August 23, 2018, only may be
admitted as `privileged foreign status' as defined in 19 CFR 146.41.
Such products will be subject upon entry for consumption to any ad
valorem rates of duty or quantitative limitations related to the
classification under the applicable HTSUS subheading.
During the notice and comment process, a number of interested
persons asserted that specific products within a particular tariff
subheading only were available from China, that imposition of
additional duties on the specific products would cause severe economic
harm to a U.S. interest, and that the specific products were not
strategically important or related to the ``Made in China 2025''
program. In light of such concerns, and pursuant to sections 301(b),
301(c), 304(a), and 307(a) of the Trade Act of 1974 (19 U.S.C. 2411(b),
2411(c), 2414(a), and 2417(a)), the Trade Representative has determined
that USTR will establish a process by which U.S. stakeholders may
request that particular products classified within an HTSUS subheading
listed in Annex A be excluded from these additional duties. The process
will be comparable to the exclusion process established in connection
with the initial, $34 billion trade action. USTR will publish a
separate notice describing the product exclusion process, including the
procedures for submitting exclusion requests, and an opportunity for
interested persons to submit oppositions to a request.
Robert Lighthizer,
United States Trade Representative.
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[FR Doc. 2018-17709 Filed 8-15-18; 8:45 am]
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