The 4-1-1 on 301’s: At the ports and in the courts

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As we draw closer to the end of the year and the Biden Administration’s decision to diplomatically boycott the Beijing Olympics was announced this week, the question of what kind of retaliation China will take for this announcement is on everyone’s minds. This decision, along with the persistence of trade remedy duties from China while there is a relief for other nations and trading blocs is not lost on the importing community.

The Section 301 tariffs, known more colloquially in the press as “The Trump Tariffs,” were the former President’s response to China taking advantage of trade through intellectual property violations and corporate espionage. His series of announcements set in motion four, nearly five lists, with duty rates ranging from 7.5% to 25%. The last list, which would have encompassed many finished consumer electronic goods like phones, computers, and televisions, would have immediately impacted American consumers in their pocketbooks. This, opposed to the billions of dollars paid by companies for lesser-known finished goods or raw materials whose price is hidden in a further manufactured or finished product.

The Office of the United States Trade Representative did create vehicles by which companies could appeal for an exclusion from the punitive duties. These exclusions were selectively granted, applied retroactively and time-limited. Many expired, but those in the categories of medical devices, equipment and supplies that supported the fight against the pandemic have been extended incrementally in this first year of the Biden administration.

In mid-November, the USTR announced their intention to extend 81 Section 301 exclusions for medical products through the end of May, 2022.  They also denied the extension of another 18 exclusions a day later. Also from within the administration, Treasury Secretary Yellen in an appearance on the CBS program “Face the Nation” hinted that the removal would make some difference in inflation, but did not offer an opinion as to whether or not they should be lifted.

In Congress, the fate and future of these 301’s is the subject of discussions by lawmakers which should make them a topic of interest for companies importing eligible goods. House Ways & Means Trade Subcommittee Chair Earl Blumenauer (D-OR) said in a roundtable with reporters that some relief should be granted and each tariff should be looked at one by one and interests whose opinions weren’t considered prior to their imposition should have the opportunity to weigh in. He also supports removal of items which are not “politically toxic.”

Meanwhile, CBP has laid out in a CSMS message what imports with liquidating 301 entries can and cannot do. According to that message:

“CBP will deny requests filed under 19 U.S.C. § 1504(b)(2) for an extension of time for liquidation of entries based solely on the pending CIT litigation challenging the lawfulness of the Section 301 duties on Chinese goods under List 3 and/or List 4A. The pending litigation in In Re Section 301 Cases, Court No. 21-00052, or any of the cases stayed under that lead case, is not sufficient to show good cause for the extension as required under 19 U.S.C. § 1504(b)(2). “

Speaking of that litigation, the Court of International Trade has set February 1st for a three-judge panel to hear oral arguments in the HTMX-Jasco Products case where the refunds of thousands of claimants is at stake which could result in billions in refunds if the court finds for the plaintiffs.

For Coppersmith customers, we can only continue to comply with the requirements to declare and deposit Section 301 duties where appropriate and advise clients to speak with counsel to determine if they are eligible and there remains a possibility that joining that case will provide them refunds for items on List 3 and 4a.