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New CIT Case Challenges Imposition of China 301 Tariffs Under Lists 3 and 4a - Could Result in Refunds on Duties Already Paid

On September 10, 2020, Plaintiffs HMTX Industries LLC (“HMTX”), Halstead New England Corporation (“Halstead”), and Metroflor Corporation (“Metroflor”) filed a complaint at the Court of International Trade (“CIT”) alleging that the Section 301 tariffs on List 3 and List 4A goods were imposed in violation of the authority provided under the Trade Act of 1974 and the Administrative Procedures Act (“APA”). If the litigation proves successful, importers paying Section 301 duties on products in Lists 3 and 4A would be eligible for refunds.

HMTX, Metroflor, and Halstead are all importers of vinyl tiles subject to the 301 Tariffs and are challenging the tariffs on two grounds. First, Plaintiffs allege the Office of the United State Trade Representative (“USTR”) operated outside of its statutory mandate by imposing the List 3 and List 4A Tariffs as both went into effect outside the 12-month window between the conclusion of an investigation into China’s practices and the President’s action on those goods. While tariffs imposed on Chinese imports under List 1 and List 2 did fall in that window, later additions such as List 3 and List 4 occurred well after the year anniversary of the investigation notification. Plaintiffs further state that if USTR alleges that Lists 3 and 4A are continuations or a “modification” of the prior Lists, the Trade Act only allows for modifications to de-escalate a trade conflict, including decreasing the tariff applied to listed products, suspension of the tariff, and revocation of the tariff. Second, Plaintiffs argue that even if the tariffs are deemed proper, USTR’s implementation of the tariffs violates notice and comment provisions of the APA.

There is a tight deadline for importers to protect their and their customers' rights to these potential refunds. Please reach out directly to a member of the Clark Hill PLC trade team listed below to discuss your firm’s options in joining this and similar actions.

If you have any questions regarding the content of this alert, please contact Mark Ludwikowski (mludwikowski@clarkhill.com; 202-640-6680), Kevin Williams (kwilliams@clarkhill.com; 312-985-5907); William Sjoberg (wsjoberg@clarkhill.com; 202-772-0924), Courtney Gayle Taylor (cgtaylor@clarkhill.com; 202-552-2350); Dennis Devaney (ddevaney@clarkhill.com); or another member of Clark Hill's International Trade Business Unit.