2022-06397. Notice of Reinstatement of Certain Exclusions: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation

AGENCY:

Office of the United States Trade Representative (USTR).

ACTION:

Notice.

SUMMARY:

In prior Federal Register notices, the U.S. Trade Representative modified the action in the Section 301 investigation of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation by excluding certain products from additional duties. The U.S. Trade Representative subsequently extended 549 of these exclusions. Following public notice and comment, the U.S. Trade Representative has determined to reinstate certain previously extended exclusions through December 31, 2022, as specified in the Annex to this notice.

DATES:

The reinstated product exclusions announced in this notice will apply as of October 12, 2021, and extend through December 31, 2022. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.

FOR FURTHER INFORMATION CONTACT:

For general questions about this notice, contact Associate General Counsel Philip Butler or Assistant General Counsel Rachel Hasandras at [phone]. For specific questions on customs classification or implementation of the product exclusion identified in the Annex to this notice, contact [e-mail].

SUPPLEMENTARY INFORMATION:

A. Background

In the course of this investigation the U.S. Trade Representative imposed additional duties on products of China in four tranches. See 83 FR 28719 (June 20, 2018); 83 FR 40823 (August 16, 2018); 83 FR 47974 (September 21, 2018), as modified by 83 FR 49153 (September 28, 2018); and 84 FR 43304 (August 20, 2019), as modified by 84 FR 69447 (December 18, 2019) and 85 FR 3741 (January 22, 2020). Each tranche is commonly known as a `List', e.g., List 1, List 2, etc. The fourth tranche is contained in Lists 4A and 4B. No tariffs on List 4B currently are in effect.

For each tranche, the U.S. Trade Representative established a process by which U.S. stakeholders could request the exclusion of particular products subject to the action. The first tranche of exclusions expired in December 2019 and the final tranche of exclusions expired in October 2020. Starting in November 2019, the U.S. Trade Representative established processes for submitting public comments on whether to extend particular exclusions. See, e.g., 85 FR 6687 (February 5, 2019) and 85 FR 38482 (June 26, 2020). Pursuant to these processes, the U.S. Trade Representative determined to extend 137 exclusions covered under List 1, 59 exclusions on List 2, 266 exclusions on List 3, and 87 exclusions on List 4. With the exception of exclusions related to the COVID-19 pandemic, all of these 549 exclusions have expired. In particular, the exclusions for most of these products expired by December 31, 2020, and the remaining exclusions expired in 2021. See 85 FR 15849 and 85 FR 20332. USTR has separately addressed the extension of COVID-19 exclusions. See 86 FR 48280 (August 27, 2021), 86 FR 54011 (September 29, 2021), and 86 FR 63438 (November 16 2021).

On October 8, 2021, the U.S. Trade Representative invited the public to comment on whether to reinstate particular exclusions previously granted and extended under the four tranches (the October 8 notice). The October 8 notice set out the following factors to be considered in decisions on possible reinstatement, and invited public comment:

• Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
• Any changes in the global supply chain since September 2018 with respect to the particular product or any other relevant industry developments.
• The efforts, if any, the importers or U.S. purchasers have undertaken since September 2018 to source the product from the United States or third countries.
• Domestic capacity for producing the product in the United States.

In addition, USTR considered whether or not reinstating the exclusion would impact or result in severe economic harm to the commenter or other U.S. interests, including the impact on small businesses, employment, manufacturing output, and critical supply chains in the United States, as well as the overall impact of the exclusions on the goal of obtaining the elimination of China's acts, policies, and practices covered in the Section 301 investigation.

B. Determination To Reinstate Certain Exclusions

Based on evaluation of the factors set out in in the October 8 notice, and pursuant to sections 301(b), 301(c), and 307(a) of the Trade Act of 1974, as amended, the U.S. Trade Representative has determined to reinstate certain exclusions described in the October 8 notice through December 31, 2022, as set out in the Annex to this notice. The U.S. Trade Representative's determination considers public comments submitted in response to the October 8 notice, and the advice of advisory committees, the interagency Section 301 Committee, and the White House COVID-19 Response Team.

The reinstated exclusions are available for any product that meets the description in the product exclusion. In particular, the scope of each exclusion is governed by the scope of the ten-digit Harmonized Tariff Schedule of the United States (HTSUS) subheadings and product descriptions in the Annex to this notice.

As stated in the October 8 notice, the reinstated exclusions are retroactive to October 12, 2021. In particular, the reinstated exclusions will apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on October 12, 2021, that are not liquidated or to entries that are liquidated, but within the period for protest described in section 514 of the Tariff Act of 1930, as amended. The U.S. Trade Representative has determined to extend the reinstated exclusions through December 31, 2022, and may consider further extensions as appropriate.

U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.

Greta M. Peisch,

General Counsel, Office of the United States Trade Representative.