Date: Thursday, September 17, 2020
Source: Supply Chain Dive
Law Firms Urge Importers To Sue For China Tariff Refunds
U.S. importers could see immense financial relief if the court grants a refund on list 3 tariffs — a tranche that affected more than 5,700 harmonized tariff schedule codes. U.S. businesses, manufacturers and consumers paid more than $57 billion in tariffs from the trade war's beginnings in February 2018 through April 2020, according to the most recent data from Tariffs Hurt the Heartland.
Attorneys acknowledged the HMTX and subsequent lawsuits may be a long shot. Trade analysts put the odds of success around 10%, according to Jennifer Diaz, board-certified international attorney with the firm Diaz Trade Law.
"I consider it a roll of the dice," she said. "But I'll take the 10% chance. Why not? Let's gamble."
Despite low odds, interest in filing a suit has been high among importers across industries, due to the wide swath of goods covered under the list 3 tariffs, Diaz said. "There's a whole lot of products at stake here," she said.
Diaz received five emails expressing interest in filing a suit in the span of about 15 minutes. "Imagine if all your friends get refunds and you don't. I would have major [fear of missing out]," she said.
To file a claim, businesses have to provide a description of products and the accompanying HTS code for their imports affected by the tariffs. They also have to specify if they applied for any exemptions.
Diaz said interest was particularly high due to the lack of planning time between the announcement and imposition of list 3 tariffs in 2018. The Trump administration announced the tariffs in July, and they took effect in September, allowing little time for businesses to adjust supply chains or find suppliers outside of China if they were not already diversified. Importers had only a few weeks to factor the duties into their total landed costs, and many rushed shipments over the Pacific in hopes of beating the tariffs.
The trade war has fallen out of the spotlight as the pandemic became the forefront risk for supply chains to manage. But the tariffs haven't disappeared, and the duties hampered some medical supply chains' ability to procure necessary products to fight the COVID-19 pandemic.
The combined risks from the trade war and later the pandemic prompted an interest in reshoring or nearshoring. Many businesses have started to shift supply chains to Mexico where tariffs are minimal or nonexistent, lead times are faster and labor wages are lower.
But the move isn't right for all industries, many of which have deep roots and specialized skill sets in China. A majority of companies in a recent AmCham survey said they have no plans to move out of China.