Litigants challenging lists 3 and 4A Section 301 tariffs have a “difficult hill to climb” in making a compelling case for why the tariffs should be lifted, a lawyer said. Speaking March 11 on a panel at Georgetown Law's 2021 International Trade Update on the courts' role in tariffs, Bradford Ward of King & Spalding called out the central claim used by one of the litigants: that the law does not permit the Office of the U.S. Trade Representative to increase tariffs, only to “delay, taper or terminate such actions.” In the same provision of that law, modification of tariffs is authorized when the burden on U.S. commerce has increased or decreased, meaning the agency can increase or decrease tariffs, said Ward, who used to work at USTR and now represents domestic industry. “It would be illogical, from my perspective, for the statute to prohibit an increase in tariffs while recognizing the ability of USTR to modify via an increase in the burden. It doesn't seem coherent,” Ward said.
The Department of Justice declined to submit additional arguments in defense of President Donald Trump's decision to expand Section 232 steel and aluminum tariffs to steel derivatives beyond its original argument in front of the Court of International Trade, guaranteeing that the court will overturn the steel derivatives tariffs but allowing for an appeal.
The U.S. Court of International Trade dismissed a challenge to the Section 232 steel and aluminum tariffs' exclusion process, finding that the importer-specific exclusion process is constitutional. In the case, steel importer Thyssenkrupp Materials and its subsidiaries said that by excluding individual importers from the tariffs, the process violated the Constitution's uniformity clause by discriminating against steel and aluminum importers based on geography (see 2004230053). Thyssenkrupp also held that the exclusion process was inconsistent with presidential proclamations dictating how the exclusions should be conducted. Judges Claire Kelly, Gary Katzmann and Jane Restani in their March 10 opinion were unconvinced of both arguments and granted the government defense's motion to dismiss the case.
Congress should repeal the Section 232 provisions that allow the president to impose tariffs in response to national security threats, Cato Institute Senior Fellow Scott Lincicome and Research Fellow Inu Manak said in a policy analysis released March 9. The statute is "superfluous given the expansion of presidential trade and other national security powers in laws enacted" since Section 232 became law in 1962, they said. Absent the appetite for a full repeal of the tariffs -- Lincicome and Manak's first proposal -- the writers floated other options for congressional changes, including amending the law to hand final say over Section 232 to Congress, providing for judicial review, narrowing what constitutes “national security,” moving Section 232 investigations to an independent agency and including a public interest provision.
The Court of International Trade's recent decision denying first sale valuation for cookware importer Meyer Corp. likely won't lead to the end of first sale treatment for goods originating from non-market economies, said customs lawyers in interviews. Despite broader questions raised by CIT Senior Judge Thomas Aquilino, it's unlikely that courts will do away with first sale for non-market countries entirely, but the decision does highlight the burden of demonstrating eligibility for first sale, lawyers said.
The Justice Department has moved to dismiss a case at the Court of International Trade that challenges the legality of President Donald Trump's move to withdraw a tariff exclusion for bifacial solar panels. The move indicates that the new Biden administration will, at least for the time being, not back down from its defense of the tariff exemption withdrawal, instead declaring that the president's actions were lawful.
First sale treatment may not be applicable to transactions involving non-market economies, including China, Court of International Trade Senior Judge Thomas Aquilino said in a March 1 decision. In a ruling on cookware imported by Meyer from Thailand and China through a Chinese middleman, the trade court found the involvement of Chinese companies made it difficult to determine whether the transaction was at arm's length and undistorted by non-market influences, as required for first sale valuation. Though he stopped short of saying imports originating in non-market economies could never receive first sale valuation, he called on the U.S. Court of Appeals for the Federal Circuit to clarify.
Keirton USA Inc., a manufacturer based in Washington state, filed a complaint with the U.S. District Court for the Western District of Washington, calling for CBP to stop seizing, denying entry to or detaining any of the company's products. The company makes machinery used to harvest hemp, kale, hops and other farm goods and has had continued troubles with CBP dating back to 2012, with the real issues beginning in May 2020. Keirton's flagship product is the Twister Trimmer -- a cannabis and hemp trimmer that the company assures is only used in a legal capacity.
The following lawsuits were filed at the Court of International Trade during the week of Feb. 15-21:
The Court of International Trade ordered the Commerce Department to reconsider its determination that certain hardwood plywood with outer veneers of radiata or agathis pine is circumventing antidumping and countervailing duties on hardwood plywood from China. CIT Judge Jane Restani found that Commerce had insufficient evidence to prove that the type of plywood in question was developed after the duties were imposed, in a Feb. 18 decision.