1) May 22 [press release] -- USTR Issues Federal Register Notice on Section 301 Proposed Tariff Modifications and Machinery Exclusion Process
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/may/ustr-issues-federal-register-notice-section-301-proposed-tariff-modifications-and-machinery
2) May 28 [FRN] -- In a notice published on September 8, 2022, USTR [Office of the United States Trade Representative] announced that the July 6, 2018 and August 23, 2018 actions, as modified, in the section 301 investigation of China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation did not terminate on their four-year anniversary dates and would continue. The notice also announced that the U.S. Trade Representative would conduct a review of the actions.
In connection with that review, and at the specific direction of the President, the U.S. Trade Representative is proposing modifications to the actions by adding or increasing ad valorem rates of duty, as directed by the President, for certain products of China in strategic sectors. In addition, the U.S. Trade Representative is proposing subheadings eligible for an exclusion process by which interested persons may request that particular machinery used in domestic manufacturing be temporarily excluded from these tariffs. The U.S. Trade Representative also is proposing to modify the actions by granting 19 temporary exclusions for certain solar manufacturing equipment. The products subject to these proposed modifications and the products being proposed for the exclusion process are set out in annexes to this notice. USTR is seeking public comments regarding the proposed modifications and exclusion process.
May 29, 2024, at 12:01 a.m. EDT: The public docket on the web portal at
https://comments.ustr.gov will open for interested persons to submit comments.
June 28, 2024, at 11:59 p.m. EST: To be assured of consideration, submit written comments on the public docket by this date.
Pursuant to section 307(c)(3) of the Trade Act (19 U.S.C. 2417(c)(3)), and based on information obtained during the review, including the written submissions, USTR, in consultation with the Section 301 Committee, prepared a comprehensive report that included findings on the effectiveness of the July 6, 2018 and August 23, 2018 actions, as modified, in achieving the objectives of the investigation, other actions that could be taken, and the effects of such actions on the United States economy, including consumers. The report,
Four-Year Review of Actions Taken in the Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation (the Report), was published on May 14, 2024, and is available on the USTR website at
https://ustr.gov/sites/default/files/05.14.2024%20Four%20Year%20Review%20of%20China%20Tech%20Transfer%20Section%20301%20(Final).pdf. The Report is incorporated into this notice by reference.
As detailed in the Report, the U.S. Trade Representative has found that:
-- The section 301 actions have been effective in encouraging China to take steps toward eliminating some of its technology transfer-related acts, policies, and practices, and have reduced some of the exposure of U.S. persons and businesses to these technology transfer-related acts, policies, and practices.
-- China has not eliminated many of its technology transfer-related acts, policies, and practices, which continue to impose a burden or restriction on U.S. commerce. Instead of pursuing fundamental reform, China has persisted, and even become more aggressive, particularly through cyber intrusions and cybertheft, in its attempts to acquire and absorb foreign technology, which further burden or restrict U.S. commerce.
-- Economic analyses generally find that the duties have had small negative effects on U.S. aggregate economic welfare, positive impacts on U.S. production in the ten sectors most directly affected by the duties, and minimal impacts on economy-wide prices and employment.
-- Economic analyses, including the principal U.S. Government analysis published by the U.S. International Trade Commission, generally find that the Section 301 tariffs have contributed to reducing U.S. imports of goods from China and increasing imports from alternate sources, including U.S. allies and partners, thereby potentially supporting U.S. supply chain diversification and resilience.
Based on these findings, the U.S. Trade Representative recommended to the President that section 301 tariffs on covered products be maintained. To further encourage China to eliminate the investigated acts, policies, and practices, the U.S. Trade Representative recommended enhancing the effectiveness of the tariff actions by adding or increasing section 301 tariffs on certain products in strategic sectors. The proposed modification includes products targeted by China for dominance, or are products in sectors where the United States has recently made significant investments.
Taking into consideration the U.S. Trade Representative's findings and recommendations, on May 14, 2024, the President issued a Memorandum that directed the U.S. Trade Representative to: “maintain, as appropriate and consistent with this memorandum, the ad valorem rates of duty and lists of products subject to the [actions] taken under the [s]ection 301 investigation” and “[t]o further encourage China to eliminate the acts, policies, and practices at issue, and to counteract the burden or restriction of these acts, policies, and practices, the Trade Representative shall modify the [actions taken in the investigation] to increase [s]ection 301 ad valorem rates of duty” for certain specified products of China. See
https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/14/memorandum-on-actions-by-the-united-states-related-to-the-statutory-4-year-review-of-the-section-301-investigation-of-chinas-acts-policies-and-practices-related-to-technology-transfer-intellectua/. The President's Memorandum specified categories of products for proposed tariff increases, tariff rates for those products, and year for tariff increases.
The President also directed the U.S. Trade Representative to establish a process by which interested persons may request that particular machinery used in domestic manufacturing classified within a subheading under Chapters 84 and 85 of the Harmonized Tariff Schedule of the United States (HTSUS) be temporarily excluded from section 301 tariffs, and that the U.S. Trade Representative prioritize, in particular, exclusions for certain solar manufacturing equipment. . . .
Consistent with the President's direction to increase section 301 tariff rates on certain categories of products, included in Annex A to this notice are 382 HTSUS subheadings and 5 statistical reporting numbers of the HTSUS, with an approximate annual trade value of $18 billion (2023). The President has directed that increases for certain products take effect in 2024, 2025, and 2026. The U.S. Trade Representative is proposing that increases in 2024 be effective August 1, 2024, and that increases in 2025 and 2026 be effective January 1 of the corresponding year.
In addition to the proposed modifications in Annex A, consistent with the President's direction, the U.S. Trade Representative is establishing an exclusion process by which interested persons may request that particular machinery used in domestic manufacturing and classified within certain subheadings under Chapters 84 and 85 of HTSUS be temporarily excluded from section 301 tariffs. The HTSUS subheadings eligible for consideration of temporary exclusion are set forth in Annex B to this notice. Procedures for requesting exclusions under this process will be published in a separate notice. Exclusions granted through this process will be effective through May 31, 2025.
Finally, to support domestic production and decrease reliance on China in a strategic sector, the U.S. Trade Representative is proposing 19 temporary exclusions for solar manufacturing equipment. The proposed temporary exclusions are set forth in Annex C to this notice. The proposed exclusions will be effective the date of this notice and through May 31, 2025.
USTR invites comments from interested persons with respect to the proposed modifications. To be assured of consideration, you must submit written comments by June 28, 2024.
With respect to USTR's proposed modifications to Section 301 tariff rates on certain products from China listed in Annex A, interested persons are invited to comment on:
-- The effectiveness of the proposed modification in obtaining the elimination of, or in counteracting, China's acts, policies, and practices related to technology transfer, intellectual property, and innovation.
-- The effects of the proposed modification on the U.S. economy, including consumers.
-- The scope of the product description to cover ship-to-shore cranes under subheading 8426.19.00 (transporter cranes, gantry cranes and bridge cranes).
-- With respect to facemasks, medical gloves, syringes and needles, whether the tariff rates should be higher than the proposed rates.
-- With respect to facemasks, whether additional statistical reporting codes under tariff subheading 6307.90.98 should be included.
-- Whether the tariff subheadings identified for each product and sector adequately cover the products and sectors included in the President's direction to the U.S. Trade Representative.
-- With respect to the exclusion process, USTR seeks comments on whether the subheadings listed in Annex B should or should not be eligible for consideration in the machinery exclusion process and whether Annex B omits certain subheadings under Chapters 84 and 85 that cover machinery used in domestic manufacturing that should be included.
-- With respect to the proposed solar manufacturing machinery exclusions in Annex C, USTR requests comments on the scope of each exclusion, including any suggested amendments to the product description.
In order to facilitate preparation of comments prior to the May 29 opening of the web portal, USTR intends to post a copy of questions for the docket by May 24, 2024. The questions will be posted at
https://comments.ustr.gov.
FRN:
https://www.federalregister.gov/d/2024-11634 (42 pages)
