Notice2024-31306
Initiation of Section 301 Investigation; Hearing; and Request for Public Comments: China's Acts, Policies, and Practices Related to Targeting of the Semiconductor Industry for Dominance
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Published
December 30, 2024
Issuing agencies
Trade Representative, Office of United States
Abstract
The U.S. Trade Representative has initiated an investigation, of China's acts, policies, and practices related to targeting of the semiconductor industry for dominance. The inter-agency Section 301 Committee is holding a public hearing and seeking public comments in connection with this investigation.
Full Text
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<title>Federal Register, Volume 89 Issue 249 (Monday, December 30, 2024)</title>
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[Federal Register Volume 89, Number 249 (Monday, December 30, 2024)]
[Notices]
[Pages 106725-106726]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-31306]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket Nos. USTR-2024-0024 and USTR-2024-0025]
Initiation of Section 301 Investigation; Hearing; and Request for
Public Comments: China's Acts, Policies, and Practices Related to
Targeting of the Semiconductor Industry for Dominance
AGENCY: Office of the United States Trade Representative (USTR).
ACTION: Notice of initiation of investigation and a hearing, and a
request for comments.
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SUMMARY: The U.S. Trade Representative has initiated an investigation,
of China's acts, policies, and practices related to targeting of the
semiconductor industry for dominance. The inter-agency Section 301
Committee is holding a public hearing and seeking public comments in
connection with this investigation.
DATES:
December 23, 2024: The U.S. Trade Representative initiated the
investigation.
January 6, 2025: USTR will open dockets for submission of written
comments and requests to appear at the hearing.
February 5, 2025, at 11:59 p.m. EST: To be assured of
consideration, submit written comments by this date.
February 24, 2025, at 11:59 p.m. EST: To be assured of
consideration, submit requests to appear at the hearing, along with a
summary of the testimony, by this date.
March 11-12, 2025: Public hearing.
Seven calendar days after the last day of the public hearing: Due
date for submission of post-hearing rebuttal comments.
ADDRESSES: Submit documents in response to this notice, including
written comments, hearing appearance requests, summaries of testimony,
and post-hearing rebuttal comments through the online USTR portal:
<a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>.
FOR FURTHER INFORMATION CONTACT: For procedural questions concerning
comments or participating in the public hearing, contact the USTR
Section support line at 202.395.5725. Direct all other questions
regarding this notice to Philip Butler and Megan Grimball, Chairs of
the Section 301 Committee; Brian Janovitz, Chief Counsel for Trade
Enforcement Strategy and Competitiveness; or Erin Biel, Assistant
General Counsel at 202.395.5725.
SUPPLEMENTARY INFORMATION:
I. China's Acts, Policies, and Practices
Evidence indicates that the People's Republic of China (the PRC or
China) has adopted acts, policies, and practices related to targeting
of the semiconductor industry for dominance. China apparently seeks to
dominate domestic and global markets in the semiconductor industry and
undertakes extensive anticompetitive and non-market means, including
setting and pursuing market share targets, to achieve indigenization
and self-sufficiency. The PRC's acts, policies, and practices also
appear to have and to threaten detrimental impacts on the United States
and other economies, undermining the competitiveness of American
industry and workers, critical U.S. supply chains, and U.S. economic
security.
Evidence indicates that the PRC's acts, policies, and practices
have been reflected in various economic and industrial plans issued by
the PRC. For example, Made in China 2025 set numerical targets for the
PRC's domestic semiconductor capacity and production that reflect
China's targeting of the semiconductors sector for dominance. Evidence
further indicates that the PRC pursues its targeting of the
semiconductor industry through an extensive range of anticompetitive
and non-market means, including through Chinese Communist Party
guidance, directives, and control within state and private enterprises;
activities of state-owned or state-controlled enterprises; market
access restrictions; opaque regulatory preferences and discrimination;
wage-suppressing labor practices; massive and persistent state
financial support of industry, including government guidance funds; and
forced technology transfer, including state-directed cyber intrusions
and cybertheft of intellectual property.
Evidence indicates that the PRC's targeting of the semiconductor
industry for dominance is leading to significant capacity expansion,
artificially and unsustainably lower domestic and global prices, a
protected domestic market, and emerging overconcentration of production
capacity in the PRC. Evidence indicates that in just six years, China
has nearly doubled its global share of foundational logic
semiconductors production capacity. Based on announced new fabrication
plants (fabs), China's share is projected to reach approximately half
of the world's capacity by 2029. In addition, projections show that
China will lead in production capacity for other types of legacy
semiconductors, such as power chips. Evidence further suggests that the
PRC's non-market-oriented expansion of capacity is already discouraging
investment by market-oriented actors.
II. Initiation of Section 301 Investigation
Section 302(b)(1)(A) of the Trade Act of 1974, as amended (Trade
Act), authorizes the U.S. Trade Representative to initiate an
investigation to determine whether an act, policy, or practice of a
foreign country is actionable under section 301 of the Trade Act.
Actionable matters under section 301 include acts, policies, and
practices of a foreign country that are unreasonable or discriminatory
and burden or restrict U.S. commerce. An act, policy, or practice is
unreasonable if, while not necessarily in violation of, or inconsistent
with, the international legal rights of the United States, it is
otherwise unfair and inequitable.
On December 23, 2024, the U.S. Trade Representative initiated a
section 301 investigation of China's acts, policies, and practices
related to targeting of the semiconductor industry for dominance.
Pursuant to section 302(b)(1)(B) of the Trade Act, USTR has consulted
with appropriate advisory committees and the inter-agency Section 301
Committee. Pursuant to section 303(a) of the Trade Act, USTR is
requesting consultations with the Government of China.
Pursuant to section 304 of the Trade Act, USTR must determine
whether the act, policy, or practice under investigation is actionable
under section 301. If that determination is affirmative, the U.S. Trade
Representative must determine whether action is appropriate, and if so,
what action to take.
This investigation initially will focus on PRC manufacturing of
foundational semiconductors (also known as legacy or mature node
semiconductors), including to the extent that they are incorporated as
components into downstream products for critical industries like
defense, automotive, medical devices, aerospace, telecommunications,
and power generation and the electrical grid. The investigation also
will initially assess whether the impact of the PRC's acts, policies,
and practices on the production of silicon carbide substrates (or other
wafers used as inputs into semiconductor fabrication) contribute to any
unreasonableness or discrimination or burden or restriction on U.S.
commerce. In addition, the investigation will examine the relationship
between the PRC's acts, policies, and practices and existing or
threatened non-market excess capacity or overconcentration of
semiconductor production in the PRC,
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and resulting dependencies and vulnerabilities that create risks for
certain critical downstream industries, as well as harm to U.S.
semiconductor producers and foundries.
III. Request for Public Comments
You may submit written comments on any issue covered by the
investigation. In particular, USTR invites comments regarding:
<bullet> China's acts, policies, and practices related to its
targeting of the semiconductor industry for dominance.
<bullet> Anticompetitive and non-market means employed by the PRC
in pursuit of its semiconductor industry targeting objectives,
including political guidance, directives, and control within state and
private enterprises, activities of state-owned or state-controlled
enterprises, market access restrictions, opaque regulatory preferences
and discrimination, wage-suppressing labor practices, massive state
support of industry (including government guidance funds), and forced
technology transfer (including state-directed cyber intrusions and
cybertheft of intellectual property).
<bullet> Whether China's acts, policies, and practices are
unreasonable or discriminatory.
<bullet> Whether China's acts, policies, and practices burden or
restrict U.S. commerce, and if so, the nature and level of the burden
or restriction. This would include economic assessments of the burden
or restriction on semiconductors, semiconductor manufacturing including
foundries, silicon carbide substrates or other wafers, and downstream
products, with a particular focus on critical industries, such as
defense, automotive, medical devices, aerospace, telecommunications,
and power generation and the electrical grid.
<bullet> Whether China's acts, policies, and practices are
actionable under section 301(b) of the Trade Act, and what action, if
any, should be taken, including tariff and non-tariff actions.
To be assured of consideration, USTR must receive written comments
by 11:59 p.m. EST on February 5, 2025. Additional instructions on how
to submit written comments are provided below in Part V.
IV. Hearing Participation
The Section 301 Committee will convene a public hearing on March
11, 2025, and if needed, the hearing will continue on March 12, 2025.
To testify at the hearing, you must submit a request to appear using
the electronic portal at <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>, following the
instructions in Part V below. Requests to appear must include a summary
of testimony, and may be accompanied by a prehearing submission.
Remarks at the hearing are limited to five minutes to allow for
possible questions from the Section 301 Committee. All submissions must
be in English. To be assured of consideration, USTR must receive your
request to appear and summary of the testimony by February 24, 2025.
Post-hearing rebuttal comments, which should be limited to
rebutting or supplementing testimony presented at the hearing, may be
submitted within seven calendar days after the last day of the public
hearing. Rebuttal comments must be submitted using the electronic
portal at <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>, following the instructions in
Part V below.
V. Submissions Instructions
Interested persons must submit written comments, requests to appear
at the hearing, summaries of testimony, and post-hearing rebuttal
comments using the appropriate docket on the portal at <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>. To make a submission, use the docket on the
portal entitled `Request for Comments on the Section 301 Investigation
of China's Acts, Policies, and Practices Related to Targeting of the
Semiconductor Industry for Dominance,' docket number USTR-2024-0024.
Interested persons wishing to provide testimony at the hearing must
submit a notification of intent and summary of testimony using the
docket entitled `Request to Appear at the Hearing on the Section 301
Investigation of China's Acts, Policies, and Practices Related to
Targeting of the Semiconductor Industry for Dominance,' docket number
USTR-2024-0025.
You do not need to establish an account to submit comments or a
notification of intent to testify. The first screen allows you to enter
identification and contact information. Third party organizations such
as law firms, trade associations, or customs brokers should identify
the full legal name of the organization they represent and identify the
primary point of contact for the submission. Information fields are
optional. However, USTR may not consider your comment or request if
insufficient information is provided. Fields with a gray Business
Confidential Information (BCI) notation are for BCI information that
will not be made publicly available. Fields with a green (Public)
notation will be viewable by the public. After entering the
identification and contact information, you can complete the remainder
of the comment, or any portion of it, by clicking `Next.' You may
upload documents at the end of the form and indicate whether USTR
should treat the documents as business confidential or public
information. Any page containing BCI 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 BCI. If you request business confidential
treatment, you must certify in writing that the information would not
customarily be released to the public. Parties uploading attachments
containing BCI also must submit a public version of their comments. If
these procedures are not sufficient to protect BCI or otherwise protect
business interests, please contact the USTR section 301 support line at
202.395.5725 to discuss whether alternative arrangements are possible.
USTR will post attachments uploaded to the docket for public
inspection, except for properly designated BCI. You can view
submissions on USTR's electronic portal at <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>.
Juan Millan,
Acting General Counsel, Office of the United States Trade
Representative.
[FR Doc. 2024-31306 Filed 12-27-24; 8:45 am]
BILLING CODE 3390-F4-P
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</html>Indexed from Federal Register on December 30, 2024.
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