Notice of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 20459-20460 [2019-09681]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 84, Number 90 (Thursday, May 9, 2019)]
[Notices]
[Pages 20459-20460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09681]


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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 increasing 
the rate of additional duty from 10 percent to 25 percent for the 
products of China covered by the September 2018 action in this 
investigation. The Trade Representative has further determined to 
establish a process by which interested persons may request that 
particular products classified within a tariff subheading covered by 
the September 2018 action be excluded from the additional duties.

DATES: The rate of additional duty will increase to 25 percent with 
respect to products covered by the September 2018 action on May 10, 
2019.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
contact Associate General Counsel Arthur Tsao, Assistant General 
Counsel Philip Butler, 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 [email protected].

SUPPLEMENTARY INFORMATION: 

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 duty 
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 
notice. The current notice refers to the September 21 notice, as 
modified by the September 28 notice, as the `September 2018 action.'
    On December 19, 2018 (83 FR 65198), in accordance with the 
direction of the President, the Trade Representative determined to 
modify the September 2018 action by postponing until March 2, 2019, the 
increase in the rate of additional duty to 25 percent. The Annex to the 
December 19 notice, which superseded Annex B to the September 21 
notice, amended the Harmonized Tariff Schedule of the United States 
(HTSUS) to reflect this postponement of the increase in the rate of 
duty applicable to the September 2018 action.
    On March 5, 2019 (84 FR 7699), in accordance with the direction of 
the President, the Trade Representative determined to modify the 
September 2018 action by postponing until further notice the increase 
in the rate of additional duty to 25 percent. Annex B of the September 
21 notice (83 FR 47974) and the Annex to the December 19 notice (83 FR 
65198) were rescinded. In accordance with Annex A of the September 21 
notice, the rate of additional duty under the September 2018 action 
remained at 10 percent until further notice.

B. Determination to Further 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/. Since the meeting on 
December 1, the United States and China have engaged in additional 
rounds of negotiation on these issues, including meetings in March, 
April, and May of 2019. In the most recent negotiations, China has 
chosen to retreat from specific commitments agreed to in earlier 
rounds. In light of the lack of progress in discussions with China, the 
President has directed the Trade Representative to increase the rate of 
additional duty to 25 percent.
    Section 301(b) of the Trade Act of 1974, as amended (Trade Act), 
provides that the Trade Representative ``shall 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 authorizes the Trade Representative 
to modify or terminate any action being taken under Section 301, 
subject to the specific direction, if any, of the President 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

[[Page 20460]]

being taken under Section [301(b)] of this title and is no longer 
appropriate.'' In light of the lack of progress in the additional 
rounds of negotiations since March 2019, and at the direction of the 
President, the Trade Representative has determined that it is 
appropriate for the rate of additional duty under the September 2018 
action to increase to 25 percent on May 10, 2019.
    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.
    The Annex to this notice amends the Harmonized Tariff Schedule of 
the United States to provide that the rate of additional duties for the 
September 2018 action will increase to 25 percent on May 10, 2019.
    Pursuant to Sections 301(b), 301(c), 304(a), and 307(a) of the 
Trade Act, the Trade Representative has determined that the Office of 
the United States Trade Representative (USTR) will establish a process 
by which interested persons may request that particular products 
classified within an HTSUS subheading covered by the September 2018 
action be excluded from the additional duties. 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.

Annex

    Effective with respect to goods (i) entered for consumption, or 
withdrawn from warehouse for consumption, on or after 12:01 a.m. 
eastern daylight time on May 10, 2019, and (ii) exported to the United 
States on or after May 10, 2019, subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States is modified:
    1. By amending U.S. Note 20(e) to subchapter III of chapter 99 by 
deleting ``10 percent'' each place that it appears, and inserting ``25 
percent'' in lieu thereof;
    2. by amending U.S. Note 20(g) to subchapter III of chapter 99 by 
deleting ``10 percent'' each place that it appears, and inserting ``25 
percent'' in lieu thereof;
    3. by amending the Rates of Duty 1-General column of heading 
9903.88.03 by deleting ``10%'', and inserting ``25%'' in lieu thereof; 
and
    4. by amending the Rates of Duty 1-General column of heading 
9903.88.04 by deleting ``10%'', and inserting ``25%'' in lieu thereof.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.
[FR Doc. 2019-09681 Filed 5-8-19; 8:45 am]
 BILLING CODE 3290-F9-P