Written by Susan Kohn Ross

On Friday, March 17, 2023, the Court of International Trade issued its decision in the pending 301 litigation. That decision can be found here. The judges agreed the actions by the U.S. Trade Representative (“USTR”) were adequate and found the tariffs valid for the products on Lists 3 and 4. [Lists 1 and 2 were never challenged.] It is entirely possible the trial court was simply not prepared to order the government to refund hundreds of millions, if not billions, of dollars to importers, but this litigation was really never more than Round 1, regardless of the outcome. If the government lost, you knew there would be an appeal, and an appeal was expected if plaintiffs lost as well. The appeal is timely filed before the Court of Appeal for the Federal Circuit, if filed within 60 days. Pursuant to 28 USC 2107(b, the exact deadline is 60 days from when the judgment is entered.

For context, it is important to keep in mind the general feeling in Congress and in many parts of the country is there is no better option than these tariffs in terms of putting pressure on China (even while there is no evidence the tariffs have changed China’s behavior re its intellectual property practices). These tariffs are one of the few issues on which both sides of the aisle agree. Their imposition is thought to allow the U.S. to crack down on China, which is seen as an ever more serious opponent on the world stage. Look for further action seeking to crack down on China through a change to the di minimum rule – all those shipments being imported which are valued at less than $800.00.

It is true USTR is performing a four-year review of the 301 tariffs , but it was always expected these 301 tariffs would be continued after the review is concluded. This is very obviously one of those situations where  – the impact on companies and consumers be damned! How long the tariffs will be extended, in what percentages (likely the same as currently imposed), and the big question – will an exclusion process be established – all remain unanswered for now.

Assuming the appeal is filed, it is on to Round 2! The challenge for importers is now arguments need to be raised on appeal about why the judges of the CIT decided the outcome erroneously, so stay tuned!