SUPPLEMENTARY INFORMATION:

A. Prior Determinations in the Investigation

For background on the proceedings in this investigation, please see the prior notices issued in the investigation, including 82 FR 40213 (August 24, 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), 83 FR 40823 (August 16, 2018), 83 FRN 47974 (September 21, 2018), and 84 FRN 20459 (May 9, 2019).

On August 18, 2017, USTR initiated an investigation into certain acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation (82 FR 40213). During the investigation, the Trade Representative determined that the acts, policies, and practices of China under investigation are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act of 1974, as amended (Trade Act).

At the direction of the President, the Trade Representative determined to take actions resulting in the imposition of an additional 25 percent duty on products of China with an annual trade value of approximately $250 billion. The additional duties were imposed in three tranches. Tranche 1 covered 818 tariff subheadings, with an approximate annual trade value of $34 billion. See83 FR 28710 (June 20, 2018). Tranche 2 covered 279 tariff subheadings, with an approximate annual trade value of $16 billion. See83 FR 40823 (August 16, 2018). Tranche 3 covered 5733 tariff subheadings, with an approximate annual trade value of $200 billion. See83 FR 47974 (September 21, 2018); 83 FR 49153 (September 28, 2018); and 84 FR 20459 (May 9, 2019).

B. Proposed Modification of 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 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. Shortly in advance of the last scheduled round, China retreated from specific commitments made in previous rounds. China also has announced further retaliatory action against U.S. commerce. The United States and China intend to continue further discussions.

Section 301(b) of the Trade Act provides that “the Trade Representative shall take all appropriate and feasible action authorized under [section 301(c)], subject to the specific direction, if any, of the President regarding any such action . . . to obtain the elimination of [the] act, policy, or practice” covered in the investigation. Section 307 of the Trade Act provides that “[t]he Trade Representative may modify or terminate any action, subject to the specific direction, if any, of the President with respect to such action, that is being taken under [section 301] 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 if such action is being taken under section 301(b) of this title and is no longer appropriate.” In light of China's failure to meaningfully address the acts, policies, and practices that are subject to this investigation and its response to the current action being taken in this investigation, and at the direction of the President, the Trade Representative proposes to modify the action being taken in this investigation.

In particular, in accordance with the direction of the President, the Trade Representative is proposing to modify the action being taken in this investigation by taking further action in the form of an additional ad valorem duty of up to 25 percent on products of China covered in the list of 3,805 full and partial tariff subheadings set out in the Annex to this notice. The proposed product list has an approximate annual trade value of $300 billion. The proposed product list covers essentially all products not currently covered by action in this investigation. The proposed product list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals. Product exclusions granted by the Trade Representative on prior tranches from this investigation will not be affected.

Any merchandise subject to the increased tariffs admitted into a U.S. foreign trade zone on or after the effective date of the increased tariffs, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, would have to be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and would be subject upon entry for consumption to the additional duty. ( printed page 22565)

D. Request for Public Comments

USTR invites comments from interested persons with respect to the proposed action to be taken in the investigation. To be assured of consideration, you must submit written comments by June 17, 2019. Post-hearing rebuttal comments, which should be limited to rebutting or supplementing testimony at the hearing, must be submitted within seven days after the last day of the public hearing. USTR requests comments with respect to any aspect of the proposed action, including:

• The specific tariff subheadings to be subject to increased duties, including whether the subheadings listed in the Annex should be retained or removed, or whether subheadings not currently on the list should be added.
• The level of the increase, if any, in the rate of duty.
• The appropriate aggregate level of trade to be covered by additional duties.

In commenting on the inclusion or removal of particular tariff subheadings listed in the Annex, USTR requests that commenters address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China's acts, policies, and practices, and whether imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.

E. Hearing Participation

The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, beginning at 9:30 a.m. on June 17, 2019. You must submit requests to appear at the hearing by June 10, 2019. The request to appear must include a summary of testimony, and may be accompanied by a pre-hearing submission. Remarks at the hearing may be no longer than five minutes to allow for possible questions from the Section 301 Committee.

All requests to appear at the hearing must be in English and sent electronically via www.regulations.gov. To submit a request to appear at the hearing via www.regulations.gov, enter docket number USTR-2019-0004 on the home page and click `search.' The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice and click on the link titled `comment now!'. In the `comment' field, include the name, address, email address, and telephone number of the person presenting the testimony. Attach a summary of the proposed testimony, and a pre-hearing submission if provided, by using the `upload file' field. The file name should include both the name of the person who will be presenting testimony and the entity they represent. In addition, please submit a request to appear and a PDF of the summary of proposed testimony by email to 301investigation@ustr.eop.gov. In the subject line of the email, please include the name of the person who will be presenting testimony, followed by `request to appear.' Please also include the name, address, email address, and telephone number of the person presenting testimony in the body of the email message.

F. Procedures for Written Submissions

All submissions must be in English and sent electronically via www.regulations.gov. To submit comments via www.regulations.gov, enter docket number USTR-2019-0004 on the home page and click `search.' The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice and click on the link titled `comment now!' For further information on using the www.regulations.gov website, please consult the resources provided on the website by clicking on `How to Use Regulations.gov ' on the bottom of the home page. We will not accept hand-delivered submissions.

The www.regulations.gov website allows users to submit comments by filling in a `comment' field or by attaching a document using an `upload file' field. USTR prefers that you submit comments in an attached document. If you attach a document, it is sufficient to type `see attached' in the `comment' field. USTR prefers submissions in Microsoft Word (.doc) or searchable Adobe Acrobat (.pdf). If you use an application other than those two, please indicate the name of the application in the `comment' field.

File names should reflect the name of the person or entity submitting the comments. Please do not attach separate cover letters to electronic submissions; rather, include any information that might appear in a cover letter in the comments themselves. Similarly, to the extent possible, please include any exhibits, annexes, or other attachments in the same file as the comment itself, rather than submitting them as separate files.

For any comments submitted electronically that contain business confidential information, the file name of the business confidential version should begin with the characters `BC'. Any page containing business confidential information must be clearly marked `BUSINESS CONFIDENTIAL' on the top of that page and the submission should clearly indicate, via brackets, highlighting, or other means, the specific information that is business confidential. If you request business confidential treatment, you must certify in writing that disclosure of the information would endanger trade secrets or profitability, and that the information would not customarily be released to the public. Filers of submissions containing business confidential information also must submit a public version of their comments. The file name of the public version should begin with the character `P'. The `BC' and `P' should be followed by the name of the person or entity submitting the comments or rebuttal comments. If these procedures are not sufficient to protect business confidential information or otherwise protect business interests, please contact the USTR Tech Transfer Section 301 line at (202) 395-5725 to discuss whether alternative arrangements are possible.

USTR will post submissions in the docket for public inspection, except business confidential information. You can view submissions on the www.regulations.gov website by entering docket number USTR-2019-0004 in the search field on the home page.

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