Federal Register/Vol. 84, No. 161/Tuesday, August 20, 2019
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43304 Federal Register / Vol. 84, No. 161 / Tuesday, August 20, 2019 / Notices OFFICE OF THE UNITED STATES At the direction of the President, the responded to questions. The public TRADE REPRESENTATIVE Trade Representative determined to take submissions and a transcript of the actions resulting in the imposition of an hearing are available on Notice of Modification of Section 301 additional 25 percent ad valorem duty www.regulations.gov in docket number Action: China’s Acts, Policies, and on products of China with an annual USTR–2019–0004. Practices Related to Technology aggregate trade value of approximately C. Modification of Action Transfer, Intellectual Property, and $250 billion. The additional duties were Innovation imposed in three tranches. Tranche 1 The Section 301 statute (set out in covered 818 tariff subheadings, with an Sections 301 to 308 of the Trade Act) AGENCY: Office of the United States approximate annual trade value of $34 (19 U.S.C. 2411–2418) includes Trade Representative. billion. See 83 FR 28710 (June 20, 2018). authority for the Trade Representative to ACTION: Notice of modification of action. Tranche 2 covered 279 tariff modify the action being taken in an subheadings, with an approximate investigation. In particular, Section SUMMARY: In accordance with the annual trade value of $16 billion. See 83 307(a)(1) authorizes the Trade specific direction of the President, the FR 40823 (August 16, 2018). Tranche 3 Representative to modify or terminate U.S. Trade Representative (Trade covered 5,733 tariff subheadings, with any action taken under Section 301, Representative) has determined to an approximate annual trade value of subject to the specific direction, if any, modify the action being taken in this $200 billion. See 83 FR 47974 of the President if: The burden or Section 301 investigation by imposing (September 21, 2018); 83 FR 49153 restriction on United States commerce additional duties of 10 percent ad (September 28, 2018); and 84 FR 20459 of the acts, policies, and practices, that valorem on products of China classified (May 9, 2019). are the subject of the action has in the tariff subheadings set out in the As set out in the above-referenced increased or decreased, or the action is Annexes to this notice. notices, the Trade Representative being taken under Section 301(b) and is DATES: Additional duties at a rate of 10 decided that one of the four categories no longer appropriate. percent ad valorem on the tariff of acts, policies, and practices covered The burden or restriction on United subheadings set out in Annex A to this in the investigation—in particular, States commerce of the acts, policies, notice are applicable with respect to relating to China’s technology licensing and practices that are the subject of the products that are entered for regulations—should be addressed Section 301 action continues to consumption, or withdrawn from through recourse to WTO dispute increase. China’s unfair acts, policies, warehouse for consumption, on or after settlement. Accordingly, the United and practices include not just its September 1, 2019. Additional duties at States initiated a WTO dispute by technology transfer and IP polices a rate of 10 percent ad valorem on the requesting consultations with the referenced in the notice of initiation in tariff subheadings set out in Annex C to Government of China regarding certain the investigation, but also China’s this notice are applicable with respect to aspects of China’s technology subsequent defensive actions taken to products that are entered for regulations. China—Certain Measures maintain those unfair acts, policies, and consumption, or withdrawn from Concerning the Protection of Intellectual practices as determined in that warehouse for consumption, on or after Property Rights (DS542). Neither the investigation. China has decided to December 15, 2019. prior actions under Section 301, nor the impose tariffs on approximately $110 billion worth of U.S. goods, with the FOR FURTHER INFORMATION CONTACT: For action announced in this notice, relate goal of pressuring the United States to questions about this action, contact to or take into account harm caused by cease its efforts to obtain the elimination Associate General Counsel Arthur Tsao this category of acts, policies, and of China’s unfair policies. China has or Assistant General Counsel Megan practices of China. further taken or threatened to take Grimball, or Director of Industrial Goods B. Proposed Modification of Action and additional countermeasures, including Justin Hoffmann at (202) 395–5725. For Public Comment non-tariff measures, against commerce questions on customs classification or As of May 2019. China’s statements of the United States. In short, instead of implementation of additional duties on and conduct indicated that action at a addressing the underlying problems, products identified in the Annexes to $250 billion level was insufficient to China has increased tariffs and adopted this notice, contact traderemedy@ obtain the elimination of China’s unfair or threatened additional retaliation to cbp.dhs.gov. and harmful policies. Thus, on May 17, further protect the unreasonable acts, SUPPLEMENTARY INFORMATION: 2019, the Trade Representative, at the policies, and practices identified in the direction of the President, invited investigation, resulting in increased A. Prior Determinations in the public comment on modifying the harm to the U.S. economy. Investigation action taken in the investigation by China’s response has shown that the On August 18, 2017, the Trade adopting an action to impose up to an current action no longer is appropriate. Representative initiated an investigation additional 25 percent duty on products The United States is engaging with into certain acts, policies, and practices from China classified in 3,805 full and China with the goal of obtaining the of the Government of China related to partial tariff subheadings, with an elimination of the acts, policies, and technology transfer, intellectual annual trade value of approximately practices covered in the investigation. property, and innovation. 82 FR 40213. $300 billion. 84 FR 22564 (May 17 The leaders of the United States and In April 2018, the Trade Representative notice). China met on December 1, 2018, and published a notice of a determination In response to the May 17 notice agreed to hold negotiations on a range that the acts, policies, and practices of inviting comments on a possible action, of issues, including those covered in China under investigation are interested persons filed nearly 3,000 this Section 301 investigation. See unreasonable or discriminatory and written submissions. In addition, USTR https://www.whitehouse.gov/briefings- burden or restrict U.S. commerce, and and the Section 301 Committee held a statements/statement-press-secretary- are thus actionable under Section 301(b) seven-day public hearing from June 17 regarding-presidents-working-dinner- of the Trade Act of 1974, as amended to June 25, 2019, at which over 300 china/. Since the meeting on December (Trade Act). 83 FR 14906. witnesses provided testimony and 1, the United States and China have VerDate Sep<11>2014 21:08 Aug 19, 2019 Jkt 247001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 E:\FR\FM\20AUN2.SGM 20AUN2 jbell on DSK3GLQ082PROD with NOTICES2 Federal Register / Vol. 84, No. 161 / Tuesday, August 20, 2019 / Notices 43305 engaged in additional rounds of description of the products in list 1. admitted as ‘privileged foreign status’ as negotiation on these issues, including Annex C contains the formal HTSUS defined in 19 CFR 146.41. Such meetings in March, April, and May of language for list 2, and Annex D products will be subject upon entry for 2019. Shortly before the May 2019 contains an informal description of the consumption to any ad valorem rates of meetings, China retreated from specific products in list 2. duty or quantitative limitations related commitments made in previous rounds. List 1 includes tariff subheadings to the classification under the China also has imposed further where China’s share of U.S. imports applicable HTSUS subheading. retaliatory action against U.S. from the world is less than 75 percent Any product listed in Annex C, commerce. The United States and China for each subheading. For list 1, the except any product that is eligible for held another round of meetings from additional duty of 10 percent ad admission under ‘domestic status’ as July 29 to July 31, 2019. At the valorem is effective September 1, 2019. defined in 19 CFR 146.43, which is conclusion of that round, China List 2 includes products where subject to the additional duty imposed remained unwilling to return to the China’s share of U.S. imports from the by this determination, and that is specific commitments it had offered in world is 75 percent or greater for each admitted into a U.S. foreign trade zone prior rounds of negotiations. subheading. To provide a longer on or after 12:01 a.m. eastern daylight Furthermore, as found by the adjustment period for U.S. interested time on December 15, 2019, only may be Department of the Treasury, China has persons, the additional duty of 10 admitted as ‘privileged foreign status’ as taken concrete steps to devalue its percent ad valorem for list 2 is delayed defined in 19 CFR 146.41. Such currency. See https:// until December 15, 2019. products will be subject upon entry for home.treasury.gov/news/press-releases/ In order to implement this consumption to any ad valorem rates of sm751. determination, effective September 1, duty or quantitative limitations related For these reasons, and in accordance 2019, subchapter III of chapter 99 of the to the classification under the with the specific direction of the HTSUS is modified by Annexes A and applicable HTSUS subheading. President, the Trade Representative has C of this notice.