Immediate Action Required to Preserve Rights to Section 301 Duty Refunds

September 2020

On September 10, litigation challenging the lawfulness of the “China tariffs” under Section 301 of the Trade Act of 1974 was filed at the U.S. Court of International Trade (CIT). Specifically, the complaint covers List 3 tariffs, which impose a 25% duty on goods originating in China. If successful, the case could result in a refund of all Section 301 tariffs paid on imported merchandise since List 3 became effective on September 24, 2018. (The complaint also references the List 4 tariffs but did not request a refund of these tariffs, which are currently set at 7.5%.)
 
The lawsuit alleges that the Office of the U.S. Trade Representative failed to comply with the Administrative Procedures Act when imposing the tariffs. It also asserts that the List 3 and List 4A tariffs were imposed to retaliate against Chinese tariffs, rather than to remedy China’s unfair trade practices—and therefore were not authorized under the Trade Act of 1974. The lawsuit further alleges that the List 3 tariffs were untimely imposed.
 
The lawsuit is based on the court’s residual jurisdiction (28 USC Section 1581(i)), under which the deadline to file a claim in court is two years after the cause of action accrues. Since the List 3 tariffs were published in the Federal Register on September 21, 2018, the deadline to file a complaint at the CIT with respect to the List 3 tariffs is September 21, 2020.
 
This development once again highlights the importance of proper tariff classification and valuation, for goods imported from China. To discuss options for refunds of the List 3 tariffs (including administrative remedies) and other customs planning in light of this new lawsuit,
please contact a BDO Customs and International Trade Services professional.
 

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