Notice of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 65198-65199 [2018-27458]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 83, Number 243 (Wednesday, December 19, 2018)]
[Notices]
[Pages 65198-65199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27458]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Modification of Section 301 Action: 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 modification of action.

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SUMMARY: In accordance with the direction of the President, the U.S. 
Trade Representative (Trade Representative) has determined to modify 
the action being taken in this Section 301 investigation by postponing 
the date on which the rate of the additional duties will increase to 25 
percent for the products of China covered by the September 2018 action 
in this investigation. As set out in this notice, the rate of 
additional duty for the products covered by the September 2018 action 
will increase to 25 percent on March 2, 2019.

DATES: On March 2, 2019 at 12:01 a.m. Eastern Standard Time, the rate 
of additional duty will increase to 25 percent with respect to products 
covered by the September 2018 action.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
contact Assistant General Counsels Arthur Tsao or Megan Grimball, or 
Director of Industrial Goods Justin Hoffmann at (202) 395-5725. For 
questions on customs classification or implementation of additional 
duties on products covered by the September 2018 action, contact 
traderemedy@cbp.dhs.gov.

SUPPLEMENTARY INFORMATION: 

[[Page 65199]]

A. September 2018 Action

    For background on the proceedings in this investigation, please see 
the prior notices issued in the investigation, including 82 FR 40213 
(August 23, 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), and 
83 FR 40823 (August 16, 2018).
    In a notice published on September 21, 2018 (83 FR 47974), the 
Trade Representative, at the direction of the President, announced a 
determination to modify the action being taken in the investigation by 
imposing additional duties on products of China with an annual trade 
value of approximately $200 billion. The rate of additional duties 
initially was 10 percent. Those additional duties were effective 
starting on September 24, 2018, and currently are in effect. Under 
Annex B of the September 21 notice, the rate of additional duty was set 
to increase to 25 percent on January 1, 2019. In the September 21 
notice, the Trade Representative stated that he would continue to 
consider the actions taken in this investigation, and if further 
modifications were appropriate, he would take into account the 
extensive public comments and testimony previously provided in response 
to the notices published on July 17, 2018 (83 FR 33608) and August 7, 
2018 (83 FR 38760).
    On September 28, 2018 (83 FR 49153), the Trade Representative 
issued a conforming amendment and modification of the September 21 
action. We refer to the September 21 action, as modified by the 
September 28 notice, as the `September 2018 action.'

B. Determination To Modify September 2018 Action

    The United States is engaging with China with the goal of obtaining 
the elimination of the acts, policies, and practices covered in the 
investigation. The leaders of the United States and China met on 
December 1, 2018, and agreed to hold negotiations on a range of issues, 
including those covered in this Section 301 investigation. See https://www.whitehouse.gov/briefings-statements/statement-press-secretary-regarding-presidents-working-dinner-china/ (the `December 1 
Statement'). The December 1 Statement notes that the President ``agreed 
that on January 1, 2019, he will leave the tariffs on $200 billion 
worth of product at the 10% rate, and not raise it to 25% at this time 
. . . Both parties agree that they will endeavor to have this 
transaction completed within the next 90 days. If at the end of this 
period of time, the parties are unable to reach an agreement, the 10% 
tariffs will be raised to 25%.'' The end of the 90-day period mentioned 
in the December 1 Statement is March 1, 2019.
    Section 301(b) of the Trade Act of 1974, as amended (Trade Act), 
requires the Trade Representative to ``take all appropriate and 
feasible action authorized under [Section 301(c)] to obtain the 
elimination of [the] act, policy, or practice [under investigation].'' 
Section 307(a)(1) of the Trade Act provides, in relevant part, that the 
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)] of this 
title and is no longer appropriate.'' In light of the outcome of the 
December 1 meeting, and at the direction of the President, the Trade 
Representative has determined that it no longer is appropriate for the 
rate of duty under the September 2018 action to increase to 25 percent 
on January 1, 2019, and that the rate of duty under the September 2018 
action instead should increase to 25 percent on March 2, 2019 (which is 
the day following the end of the 90-day period mentioned in the 
December 1 Statement).
    The Trade Representative's decision to modify the September 2018 
action takes into account the extensive public comments and testimony, 
as well as advice from advisory committees, concerning the actions 
proposed in the notices issued in advance of the September 2018 action 
(83 FR 33608 and 83 FR 38760). Those notices, among other things, 
requested comments on whether the rate of additional duties should be 
10 percent or 25 percent. The Trade Representative's decision also 
reflects the advice of the interagency Section 301 Committee.
    As noted above, Annex B to the September 21 notice increased the 
rate of additional duties for the September 2018 action to 25 percent 
on January 1, 2019. The Annex to this notice supersedes Annex B to the 
September 21 notice, and provides that the rate of additional duties 
for the September 2018 action will increase to 25 percent on March 2, 
2019.

Annex

    (Superseding Annex B of the Notice Published at 83 FR 47974)
    Effective with respect to goods entered for consumption, or 
withdrawn from warehouse for consumption, on or after 12:01 a.m. 
Eastern Standard Time on March 2, 2019, subchapter III of chapter 99 of 
the Harmonized Tariff Schedule of the United States is modified:
    1. By deleting ``10%'' in the Rates of Duty 1-General column of 
headings 9903.88.03 and 9903.88.04, and inserting ``25%'' in lieu 
thereof; and
    2. by deleting ``10 percent'' each place that it appears in U.S. 
Notes 20(e) and 20(g) to subchapter III of chapter 99 and inserting 
``25 percent'' in lieu thereof.

Robert Lighthizer,
United States Trade Representative.
[FR Doc. 2018-27458 Filed 12-18-18; 8:45 am]
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