Judges Deny Elimination of Section 301 Tariffs, Petitioners to Appeal

Washington, DC, March 20, 2023-On March 17, three judges in the U.S. Court of International Trade, affirming the U.S. Trade Representative (USTR), denied the request of 3,600 companies to eliminate the section 301 tariffs.

The levies concern $300 billion worth of Chinese goods. HMTX was one of four companies standing in for thousands of suits over the tariffs.

Says Harlan Stone, CEO of HMTX and a petitioner, “I disagree with the decision. We have the right to appeal and plan to do so.” Stone shared his thoughts on the tariffs in a FloorDaily interview last August.

The HMTX complaint is challenging the USTR’s legal authority to promulgate and implement Section 301 tariffs under the Trade Act. Section 301 of the Trade Act expressly mandates that “[a]ny action taken...to eliminate an act, policy, or practice shall be devised so as to affect goods or services of the foreign country in an amount that is equivalent in value to the burden or restriction being imposed by that country on United States commerce.” Based on the USTR’s own investigation, it concluded that China’s intellectual property theft has caused at least $50 billion of damages to U.S. businesses per year. However, the USTR has imposed tariffs for an extra $500 billion goods--$200 billion for List 3 items and $300 billion for List 4A items--in addition to the List 1 ($34 billion) and List 2 ($16 billion) tariffs. The List 1 and List 2 levies (totaling $50 billion) are equivalent in value to the USTR’s determination of the burden imposed by China’s alleged unfair intellectual property practices on U.S. commerce. The additional $500 billion of new tariffs is far in excess of the USTR’s determination of damages. From an historical context when List 3 and List 4A were imposed, those lists appear to be driven by retaliatory duties imposed by China, and it can be argued that such is not a valid reason to have added the $500 billion worth of additional tariffs on imports from China.

In June 2022, it was announced that Biden would consider removal of the tariffs to mitigate inflation, but that has not yet happened.