On Monday, August 1st, the Office of the U.S. Trade Representative (USTR) filed remand results with the U.S. Court of International Trade (CIT), releasing updated explanations for retaliatory tariffs on roughly $300 billion worth of Chinese goods imposed in the midst of the U.S. – China Trade War. USTR filed the remand as ordered by the CIT, which found that the USTR had not satisfied its obligations under the Administrative Procedure Act (APA). The APA governs the process by which federal agencies develop and issue regulations.
Under the Trump Administration, the USTR levied two rounds of Section 301 tariffs on a combined $50 billion worth of Chinese goods in the response to the country’s forced intellectual property transfer and discriminatory trade policies. Section 301 authorizes USTR to take action to encourage foreign countries to abandon or mitigate unfair trade practices affecting U.S. commerce. After Beijing retaliated with its own tariffs on U.S. goods, the Trump Administration directed the USTR to expand its Section 301 tariffs to cover roughly $300 billion of imports, a development that was controversial from the start. The decision to impose a third and fourth round of Section 301 tariffs on China elicited more than 9,000 public comments on the proposed expansions. Despite these comments, the USTR imposed the tariffs and thousands of importer plaintiffs have filed suit in the CIT challenging these actions.
The 90-page document addresses product-specific comments across eight categories, including new explanations on why the USTR included some products (parts) and excluded others (certain rare earths/critical minerals, seafood products, antiquities and art, consumer electronics, health and safety products, and chemicals and chemical inputs). The USTR did not explain inconsistencies in its decision-making process, but relied heavily on its desire to maintain the level of coverage directed by of former President Trump. The USTR stated in Monday’s remand that “most comments urging for additional inputs to be removed failed to demonstrate how imposing the additional duties on the input would not be practicable or effective to eliminate China’s acts, policies, and practices or failed to show how imposing the additional duties would cause disproportionate economic harm to U.S. interests.”
Prior to filing its remand results Monday, the USTR submitted a motion to correct the administrative record in the case, asking to add several Federal Register notices and press releases it said influenced decision-making around List 3 and List 4. USTR Associate General Counsel Megan Grimball stated on Monday that “upon drafting the remand results as ordered by the court, USTR determined that additional documents were directly or indirectly considered in the process of issuing List 3 and List 4.” None of these documents were provided or cited in USTR’s original notices implementing the tariffs.
Crowell & Moring, LLP continue to monitor this development and the potential impact to businesses and consumers moving forward.