301 Tariffs Survive Initial Court Decision; Importers Can Still Join Litigation

A March 17 decision by the Court of International Trade means the Section 301 tariffs on imports from China will remain in place for now, but litigation to overturn the levies will continue and importers of goods subject to the tariffs can still join this effort.

A case first filed with the CIT 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 imposed in violation of the Administrative Procedures Act because USTR failed to allow sufficient time and process for notice and comment and failed to adequately respond to the thousands of comments received. The plaintiff’s arguments involved three discrete issues: (1) USTR’s consideration of comments when it included or excluded particular tariff numbers from Lists 3 and 4a, (2) USTR’s consideration of comments concerning the potential aggregate economic harm/impact caused by implementation of the tariffs, and (3) USTR’s consideration of comments concerning potential alternative courses of action to the level of tariffs directed by the president.

On each of these points the CIT found that the explanations provided by USTR were not impermissibly after-the-fact and that the APA did not mandate as robust an explanation of the agency’s decision-making process as the trade community argued. Rather, the CIT indicated that USTR need only show that it was aware of the comments and engaged in reasoned decision-making, stating that it will “uphold a decision of less-than-ideal clarity if the agency’s path may reasonably be discerned.”

The CIT’s decision will be appealed to the Court of Appeals for the Federal Circuit, which will likely not render its decision until 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.