US Court upholds Section 301 tariffs on Chinese goods, but appeal likely
A recent decision by the Court of International Trade has upheld the legality of Section 301 tariffs on Chinese-origin products included on the Office of the US Trade Representative’s List 3 and List 4A, despite over 3,600 importers having filed cases in hopes of securing relief from the tariffs. These tariffs apply to a wide range of products including food, raw materials, and consumer goods such as apparel, electronics, and lamps. The additional Section 301 tariffs on imports from China began in 2018 when the USTR imposed duties on specified Chinese imports under Section 301 of the Tarde Act of 1972. The USTR subsequently expanded the list of products subject to Section 301 tariffs by adding products on Lists 3 and 4A.
The litigation began at the CIT in 2020 when over 3,600 companies brought suit challenging USTR’s statutory authority to impose the duties. The CIT previously determined that the USTR acted within its statutory authority when it modified the Section 301 tariffs by adding Lists 3 and 4A. However, in the previous decision, the CIT found that the USTR had not satisfied the procedural requirements by providing adequate explanations on how it considered the thousands of comments that the agency received during the notice and comment period.
In April 2022, the CIT sustained the USTR’s authority to impose the additional duties but remanded the matter for the USTR to respond to comments received during the rulemaking proceedings establishing the product lists, as required by the Administrative Procedure Act. Upon remand, the USTR provided an additional explanation for the tariffs on List 3 and List 4A products. Plaintiffs and amici curiae filed comments opposing the Remand Results and sought vacatur of List 3 and 4A with the CIT.
The CIT rejected Plaintiffs’ argument, holding that the USTR provided a fuller explanation of its rationale. This concludes the litigation process at the CIT, but the Plaintiffs have 60 days to appeal the case to the US Court of Appeals for the Federal Circuit. Businesses that import from China will remain subject to the Section 301 tariffs as the appeals process unfolds. The tariffs have had a significant impact on the bottom line for many companies.
