China 301 Duty Refunds – What Is Next?

Written by Susan Kohn Ross

There are conflicting opinions as to when the deadline (called the statute of limitations) expires to file a complaint at the Court of International Trade and seek refunds on any China 301 List 3 duties which were paid. We know the statute of limitations is two years – but when does it start? Some argue the statute expired on Friday, September 18, 2020 (tied to the press release which the U.S. Trade Representative published in which the final list of tariff numbers were announced). Others point to Monday, September 21, 2020, which is two years from the date on which the U.S. Trade Representative published the tariff list officially in the Federal Register (and September 21, 2018 is the date listed on the USTR website).  Others have argued September 24, 2020 is the date since that is when the tariffs actually took effect. Still others have suggested the date could be even later based on when an importer is first assessed any List 3 tariff.  As this Alert is published, there are nearly 3,000 lawsuits on file seeking a refund. 

It is entirely possible a similar slew of lawsuits will follow for goods on List 4, but the expiry of that statute of limitations is about a year in the future. 

If you missed out learning about the lawsuit soon enough or could not make arrangements to timely file, you still have the chance to take action. There are really only three (3) likely outcomes. One is the court will find the claims without merit. Depending on exactly how that decision is worded, there may still be the opportunity to appeal. The second option is the court agrees with plaintiffs and finds the tariffs to be invalid from the outset. If that is the decision, the remaining question is will the court find the tariffs invalid for all importers or just those who filed – and this is where further action is recommended. 

Regardless of the outcome, importers should expect there will be at least one appeal to the Court of Appeals for the Federal Circuit and possibly a second appeal to the U.S. Supreme Court – and there are other procedural steps which could occur in-between.  So, importers should expect it will take some time before there is a final outcome.  In the meantime, since the outcome is far from certain, whether or not you have filed a lawsuit, importers would be wise to protest every entry on which they are paying 301 duties because without those protests, and assuming the best possible outcome, there may be no vehicle by which CBP will be able to issue any refunds. 

If you have not filed any protests and the 301 List 3 tariff is declared invalid as to all importers, the only means by which refunds will be possible is Congressional action, since CBP needs the existence of the protest to have a legal mechanism through which to issue any refund. Given the current climate, it is not likely Congress is going to be interested in discussing refunds of billions of dollars a year or two past the election and even assuming all the current crises are resolved. So, filing protests is really key to protecting one’s interests.  

The best of all possible outcomes is the court finds the 301 tariff on List 3 to be invalid from the outset. If so, there will be lots of entries between now and then that will be entered and liquidate. Without a protest being on file, CBP will not have a legal vehicle by which it is authorized to issue refunds, so importers would be wise to get their protests on file starting now. 

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