Notice of Product Exclusion Extensions: 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 notices, the U.S. Trade Representative modified the actions in the Section 301 investigation of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation by excluding from additional duties certain medical-care products needed to address COVID, and subsequently extended certain of these exclusions. The current COVID exclusions—covering 81 medical-care products—are scheduled to expire on May 15, 2023. This notice announces the U.S. Trade Representative's determination to provide a 16-day transition period for all COVID exclusions, extending them through May 31, 2023, and to extend 77 of the COVID exclusions through September 30, 2023.

DATES:

To provide a transition period, this notice extends the 81 exclusions scheduled to expire on May 15, 2023 through May 31, 2023, listed in Annex B to notice 86 FR 63438). Those exclusions receiving further extensions and listed in the Annex to this notice are extended through September 30, 2023. 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 Edward Marcus at (202) 395–5725. For specific questions on customs classification or implementation of the product exclusions, contact traderemedy@cbp.dhs.gov.

SUPPLEMENTARY INFORMATION:

A. Background

In the course of this investigation, the U.S. Trade Representative has imposed additional duties on products of China in four tranches. See83 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).

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. Additionally, on March 25, 2020, USTR requested public comments on proposed modifications to exclude from additional duties certain medical-care products related to the U.S. response to COVID. 85 FR 16987 (March 25, 2020).

On December 29, 2020, USTR announced 99 product exclusions for medical-care products and products related to the U.S. COVID response. These 99 exclusions were later extended until September 30, 2021. 86 FR 13785. On August 27, 2021, USTR published a notice requesting public comments on whether any of these exclusions should be further extended for up to six months. 86 FR 48280. On November 16, 2021, USTR announced the U.S. Trade Representative's determination to extend 81 of these exclusions for an additional 6 months. See86 FR 63438 (November 16, 2021). The notice further provided that the U.S. Trade Representative might consider further extensions and/or modifications as appropriate. 86 FR 63438. These 81 exclusions were subsequently extended through February 28, 2023. See87 FR 33871 (June 03, 2022); 87 FR 73383 (November 29, 2022).

On February 7, 2023, USTR published a notice requesting public comments on whether to further extend any of these exclusions for up to 6 months and announced an interim extension of the 81 exclusions through May 15, 2023, to allow time for consideration of the public comments. 87 FR 8027 (February 7, 2023). The February 7 notice stated that USTR would evaluate each of the 81 exclusions on a case-by-case basis. The evaluation would examine whether it remains appropriate to exclude certain products from additional Section 301 duties in light of the changing circumstances, including the spread of variants or subvariants and the increased domestic production and availability of certain products, and taking account of the overall impact of these exclusions on the goal of obtaining the elimination of China's acts, policies, and practices covered in this Section 301 investigation.

In accordance with Section 307(c)(3) of the Trade Act of 1974, on September 8, 2022, USTR announced that it would be conducting a review of the July 6, 2018 and August 23, 2018 actions, as modified. See87 FR 26797 (May 5, 2022); 87 FR 55073 (September 8, 2022). Section 307(c) of the Trade Act of 1974 requires the U.S. Trade Representative to conduct a review of: (A) the effectiveness in achieving the objectives of Section 301 of (i) such action, and (ii) other actions that could be taken (including actions against other products or services), and (B) the effects of such actions on the United States economy, including consumers. See19 U.S.C. 2417(c)(3)(A) and (B). In a notice published on October 17, 2022 (87 FR 62914), USTR announced that it was opening a docket on November 15, 2022 (USTR–2022–0014) for interested persons to submit comments with respect to any aspect of Section 307(c) considerations, including whether certain tariff headings should remain covered by the actions.

B. Determination To Extend Certain Exclusions

Based on evaluation of the public comments and the factors set out in in the February 7 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 extend 77 of the COVID-related exclusions as set out in the Annex to this notice through September 30, 2023. The U.S. Trade Representative has determined that extending these 77 exclusions is not likely to adversely harm domestic manufacturing of products covered by the exclusions, and extending them through September 30, 2023 will allow the U.S. Trade Representative to consider and align, as appropriate, the exclusions with the results of the statutory 4-year review. The U.S. Trade Representative's determination to extend these exclusions takes into account public comments submitted in response to the February 7 notice and the advice of advisory committees, the interagency Section 301 Committee, and the White House COVID Response Team.

To provide a transition period for the expiring exclusions, the U.S. Trade Representative has determined to extend all 81 COVID-related exclusions described in Annex B of the November 16, 2021 (86 FR 63438) notice through May 31, 2023.

The exclusion extensions are available for any product that meets the description in the product exclusion. Further, the scope of each exclusion and modification 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. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.

The U.S. Trade Representative may continue to consider further extensions and/or additional modifications as appropriate.

The U.S. Trade Representative's determination not to extend certain COVID-related exclusions does not affect exclusions reinstated October 12, 2021 under docket number USTR–2021–0019 and subsequently extended through September 30, 2023. See87 FR 78187 (December 21, 2022).