Section 301 Litigation Update – There’s Still Time for Importers to Join!
Section 301 duties have been impacting US importers since 2018, with no end in sight. Some companies saw temporary relief through exclusions, but many of the exclusions have long since expired (with only a few Covid-19 related product exclusions remaining). Although List 4B never went into effect, there has been no movement on reducing or eliminating any tariffs for the thousands of products which fall under Lists 1, 2, 3, or 4A.
The current pending litigation in the U.S. Court of International Trade (CIT), seeks the refund of Section 301 tariffs paid on goods covered by List 3 or 4A and may be importers’ only chance to recoup those duties.
In September 2020, a lawsuit was filed in the CIT, challenging the assessment of additional duties on certain goods produced in China by the United States Trade Representative (USTR). Specifically, the lawsuit challenges the legality of Section 301 duties imposed under List 3 and List 4A. The central issues of the case are whether USTR exceeded its statutory authority when it drastically increased the additional duties on goods from China when it imposed the List 3 and List 4A duties, and whether the agency followed appropriate administrative procedures when it promulgated List 3 and List 4A.
Since the filing of the first case, nearly 7,000 additional importers have joined the litigation, making this one of the largest cases ever filed in the CIT. Well over $100 billion in Section 301 duties have been collected to date. In the event that the court challenge is successful, importers would be entitled to refunds of the List 3 and List 4A duties that they have paid.
Importantly, only importers that have filed cases in the CIT will receive refunds if the case is successful. It is not too late to file a CIT case, and new cases are still being filed by importers.
An oral argument in the lead case was held at the CIT on February 1, 2022, and the court could issue its decision sometime in the spring. It is nearly certain that the CIT decision, however it comes out, will be appealed.
If you have any questions or are interested in filing a case to preserve rights to a duty refund, please do not hesitate to contact Ashley Coxey at Laufer Group International or Joseph Spraragen at GDLSK, at the information provided below.
This bulletin has been prepared for general informational purposes only and is not intended as legal advice.
