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Toss China Tariffs, Industry Urges Trade Court

Organizations including the Retail Litigation Center, National Retail Federation, American Apparel & Footwear Association and Footwear Distributors and Retailers of America in a joint statement called on the United States Court of International Trade to end the Section 301 tariffs against China.

The coalition criticized the U.S. Trade Representative’s (USTR) “insufficient response” to tariff comments submitted by industry groups. Earlier this month, USTR confirmed that representatives of domestic industries benefiting from the tariff actions in the Section 301 investigation of “China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation” want to keep the punitive duties in place.

USTR said accordingly, as required by statute, the tariffs did not expire on their four-year anniversary dates and the office will proceed with the next steps as provided in the statute. In May, USTR commenced the statutory four-year process by notifying representatives of domestic industries benefitting from the tariff actions that the duties might expire and giving them the opportunity to support their continuation. Since it received requests to keep the duties in place, the tariff actions have not terminated and USTR will review whether to take any action at all.

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One of those representatives of domestic industries–the National Council of Textile Organizations (NCTO)–explained its stance before a U.S. International Trade Commission (USITC) hearing in July that Section 301 penalty tariffs on finished Chinese textile and apparel imports give American manufacturers a chance to compete and provide trade officials with an essential trade negotiation tool.

“The Court of International Trade gave the United States Trade Representative a second chance to satisfy its most basic obligations of reasoned decision-making for List 3 and List 4 tariffs, but USTR failed again to do so,” the coalition said Wednesday. “After the agency responded to none of the thousands of critical comments it received during its initial rulemaking process, the Court of International Trade remanded to give USTR another opportunity to explain itself. But USTR again offered only deflection and conclusory declarations.”

The coalition said the court “bent over backwards to allow USTR to comply with its Administrative Procedure Act obligations,” and that it has shown itself “incapable of meeting its legal responsibilities.” The group said USTR’s response “must be met with the appropriate legal action.”

The groups have filed an amicus brief in support of the challenge to List 3 and List 4 China Section 301 tariffs. The brief was prepared by Joe Palmore and Adam Sorenson of Morrison & Foerster LLP.

“The time has come for the Court of International Trade to impose the normal remedy for unlawful agency action and vacate the tariffs that are taxing American consumers, contributing to the exorbitant rise in inflation and burdening our supply chains,” the coalition said. “All illegally collected List 3 and List 4 tariff duties should be returned. The Administrative Procedure Act demands it. American businesses and consumers should no longer be forced to pay higher prices on products because of tariffs that USTR cannot reasonably justify.”

The tariffs were one of the few policies President Biden continued from the Trump administration after he took office. Biden said he wanted to use them as “leverage” against China in negotiations over bilateral trade.