China Tariff Case Advances at Appeals Court

Litigation seeking to overturn Section 301 tariffs on hundreds of billions of dollars’ worth of imports from China moved forward recently when importers filed their first brief with the Court of Appeals for the Federal Circuit. Importers of subject goods can still join this effort, which could ultimately yield refunds of duties imposed.

A case first filed in 2020 and since joined by thousands of importers argues that the Section 301 tariffs on List 3 and List 4A goods from China were wrongly imposed. In March 2023 the Court of International Trade ruled in favor of the federal government, leaving the tariffs in place for now.

In an appeal to the CAFC, the plaintiffs raised two main arguments. First, the Office of the U.S. Trade Representative lacked statutory authority to impose the tariffs on List 3 and 4A goods because relevant law provides that a Section 301 tariff increase must be tied to an increase in the burden on U.S. commerce from the Chinese practices that gave rise to the initial round of tariffs (and not, for example, retaliation by China for those tariffs). The plaintiffs also cited the “major questions” doctrine, which has been the focus of several recent high-profile cases dealing with congressional delegation of authority, in arguing that Congress would not have granted USTR authority to take action of such economic and political consequence without a far clearer statement than what is provided in existing law.

Second, the plaintiffs asserted that USTR violated the Administrative Procedures Act by failing to consider, let alone respond to, thousands of comments lodging objections to the List 3 and 4A tariffs. The CIT agreed and should therefore have vacated these tariffs, the plaintiffs said, but instead it committed a judicial error by allowing USTR to provide the missing reasoning on remand.

The CAFC is expected to receive additional briefings and arguments in this case over the next few months and a decision is anticipated sometime in 2024.

If this case is ultimately successful, refunds of all Section 301 tariffs paid on List 3 and List 4A goods will potentially become available. Importers can still preserve their rights to possible refunds of these tariffs by joining the litigation. For more information, or assistance filing your claim, please contact attorneys Larry Ordet, Lenny Feldman, Rob DeCamp, or David Cohen at 301Litigation@strtrade.com.

In the meantime, efforts to ameliorate the impact of the tariffs are continuing.

– ST&R is advocating for the renewal of all previously approved exclusions and the creation of a process allowing for new exclusion requests (for more information, please contact strdc@strtrade.com).

– There are a number of proven and legitimate ways to effectively avoid the tariffs or limit their impact.

– Hundreds of tariff exclusions have been extended through Sept. 30.

– An ongoing USTR review could result in changes to the tariffs.