Supreme Court Allows China 301 Tariffs on POLYESTER YARN, WOOLSACKS, and HATS

On June 15, 2026, the U.S. Supreme Court DECLINED TO HEAR an appeal from the decision of United States Court of Appeals for the Federal Circuit affirming the Court of International Trade decision that USTR's actions relating to List 3 and List 4 did not violate any federal law.

In other words, the lawsuit is DEAD. The China Section 301 tariffs will continue.

While Agathon Associates does not include an attorney, it was possible to refer clients to an attorney who could file on their behalf.

Agathon Associates clients who joined the lawsuit were importers of the following merchandise:

• Various classifications under Subheading 5402.20 and 5902.20
  • Certain polyester yarns (25% 301 tariff).
• Statistical classification 6305.39.0000
  • Nylon woolsacks (7.5% 301 tariff in addition to General Rate of Duty of 8.4%).
• Statistical classification 6502.00.6030
  • Straw hat bodies (25%, General Rate of Duty is Free).

The Supreme Court docket is available at https://www.supremecourt.gov/docket/docketfiles/html/public/25-1012.html.

UPDATE: Section 122 Tariffs

On February 20, 2026, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the imposition of tariffs. Later that same day, President Trump announced that he was imposing a temporary 10% surcharge on imports using Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132). This is the first time a President has used Section 122.

See: 91 FR 9339 (February 25, 2026).

Section 122 authorizes the President to impose temporary import duties or surcharges "[w]henever fundamental international payments problems require special import measures to restrict imports (1) to deal with large and serious United States balance-of-payments deficits, (2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or (3) to cooperate with other countries in correcting an international balance-of-payments disequilibrium." President Trump's actions have raised questions about the meaning of the term "balance-of-payments deficits" as it is used in Section 122.

See: CRS Report IF13199 (April 9, 2026).Sec. 122 of the Trade Act of 1974. as amended.

See: Sec. 122 of the Trade Act of 1974, as Amended through P.L. 119–75, Enacted February 3, 2026.

On May 7, 2026, The United States Court of Internation Trade, in a devided decision, struck down Trump's Section 122 tariff action.

See: Slip Op. 26-47 (May 7, 2026).

On May 12, 2026, several non-governmental sources reported that the United States Court of Appeals for the Federal Circuit stayed the CIT's judgment while the court considers such relief.

Woman Pleads Guilty to Importing and Selling Counterfeit Apparel and Other Luxury Articles

On May 6, 2026, a Waynesville, Missouri., woman pleaded guilty in federal court today to importing and selling counterfeit luxury goods, apparel, and other items online.

By pleading guilty today, Lecena admitted she sold various counterfeit purses, jewelry, phone cases, handbags, shoes, clothing, and other counterfeit products through Bali Rattan LLC from March 2022 to December 2024.

The counterfeit goods and apparel were typically manufactured in the Philippines, Hong Kong, and China and shipped to the U.S. for distribution. Numerous shipments were delivered from these countries to Lecena during this time.

Read the Department of Justice Press Release HERE.

BACKGROUND to IEEPA Tariffs and Sec. 122 Tariffs

On February 20, 2026, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the imposition of tariffs. Later that same day, President Trump announced that he was imposing a temporary 10% surcharge on imports using Section 122 of the Trade Act of 1974 (19 U.S.C. § 2132). This is the first time a President has used Section 122.

Section 122 authorizes the President to impose temporary import duties or surcharges "[w]henever fundamental international payments problems require special import measures to restrict imports (1) to deal with large and serious United States balance-of-payments deficits, (2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or (3) to cooperate with other countries in correcting an international balance-of-payments disequilibrium." President Trump's actions have raised questions about the meaning of the term "balance-of-payments deficits" as it is used in Section 122.

Extending the Tariffs. Section 122 authorizes a surcharge for up to 150 days "unless such period is extended by Act of Congress." Congress could consider legislation to extend (or terminate) the surcharge proclaimed by President Trump, although Section 122 does not provide expedited procedures for considering such legislation.

Amending Section 122. If Congress approves or disapproves of Section 122 duties and does not wish to wait for or defer to courts' interpretations of the statute, it could either amend Section 122 or pursue nonbinding measures (such as a simple resolution) to express whether it thinks Section 122's conditions for tariffs are currently satisfied.

See: Proclamation 11012 of February 20, 2026

See: Section 122 of the Trade Act of 1974.

See: CRS Report IF13199.

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On February 20, 2026, the U.S. Supreme Court issued its decision in Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., two appeals concerning tariffs President Trump had imposed under the International Emergency Economic Powers Act (IEEPA). In an opinion authored by Chief Justice Roberts, the Court held that IEEPA does not give the President authority to impose tariffs.

See: CRS Report LSB11398.

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On April 2, 2025, President Trump declared a separate emergency concerning "a lack of reciprocity in our bilateral trade relationships . . . as indicated by large and persistent annual U.S. goods trade deficits." Based on this declaration, President Trump invoked IEEPA to announce tariffs of at least 10% on imports from almost all U.S. trading partners and higher, country-specific "reciprocal tariffs" for many countries (collectively, the worldwide tariffs). President Trump subsequently modified the trafficking tariffs and the worldwide tariffs several times. The President also cited IEEPA when imposing tariffs on imports from Brazil, India, and various other imports based on emergency declarations.

See: Executive Order 14257 of April 2, 2025 Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits

` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` ` `

On February 1, 2025, President Donald Trump invoked IEEPA to announce tariffs on imports from Canada, Mexico, and the PRC, declaring emergencies largely concerning illicit drugs (the trafficking tariffs).

Executive Order 14193 imposed additional tariff of 25% on products of Canada, effective February 4, 2025.

See: Executive Order 14193 of February 1, 2025 Imposing Duties To Address the Flow of Illicit Drugs Across Our Northern Border.

Executive Order 14194 imposed additional tariff of 25% on products of Mexico, effective February 4, 2025.

See: Executive Order 14194 of February 1, 2025 Imposing Duties To Address the Situation at Our Southern Border

Executive Order 14195 imposed additional tariff of 10% on products PRC, effective February 4, 2025.

See: Executive Order 14195 of February 1, 2025 Imposing Duties To Address the Synthetic Opioid Supply Chain in the People’s Republic of China

Connecticut Woman Pleads Guilty to Selling Counterfeit Clothing

According to court documents and statements made in court, between 2021 and 2024, Melissa Cruz conspired with others to sell counterfeit clothing, luxury and designer handbags and purses, and jewelry bearing counterfeit trademarks to customers across the U.S., some of which she imported from outside the U.S. She used Facebook to conduct live shows during which she showcased, advertised, and sold the counterfeit goods. In total, Cruz and her co-conspirators made more than $4 million in gross sales for the counterfeit merchandise through various electronic peer-to-peer payment services including CashApp, Paypal, and Venmo.

Read more HERE.

Court Rules on he Comfy®, which combines the Features of a Throw Blanket with those of a Pullover.

Cozy Comfort contends The Comfy® should be classified under a tariff heading for blankets instead, or in the alternative, under one of two other tariff headings. The Court conducted a five-day bench trial to resolve lingering factual disputes about The Comfy®. Based on the following findings of fact, the Court concludes that the Government is correct. The Comfy® is a pullover classifiable under 6110.30.30, HTSUS. Read more HERE

ITA Publishes Notice of Amended Antidumping Duty Order Relating to Superabsorbent Polymers

On January 3, 2025, the International Trade Administration published in the Federal Register (90 FR 302) Certain Superabsorbent Polymers From the Republic of Korea: Notice of Court Decision Not in Harmony With the Final Determination of Antidumping Duty Investigation; Notice of Amended Final Determination; Notice of Amended Antidumping Duty Order.

Polyester Textured Yarn From Indonesia: Notice of Court Decision Not in Harmony With the Final Determination of Antidumping Investigation

On November 8, 2024, the International Trade Administration published in the Federal Register (89 FR 88725 ) Polyester Textured Yarn From Indonesia: Notice of Court Decision Not in Harmony With the Final Determination of Antidumping Investigation; Notice of Amended Final Determination.

Court Ruling on "Parts" versus "Inputs"

In March 20, 2024, Customs Bulletin Vol. 58, No. 11 ( beginning on page 6) the U.S. Court of Appeals for the Federal Circuit case RKW KLERKS INC., Plaintiff-Appellant v. UNITED STATES, DefendantAppellee is reported.

BACKGROUND: RKW imports two types of net wrap, marketed as “Top Net” and “Rondotex” (collectively, Netwraps). The Netwraps are synthetic fabrics used to wrap round bales of harvested crops released from baling machines such that the bales maintain their compressed structure and are easier to transport. The Netwraps are made up of highdensity polyethylene (HDPE) film layers that have been knit on a Raschel machine and wrapped around a cardboard core.

At issue in this case is the proper classification of the Netwraps in the HTSUS. Customs classified the Netwraps under HTSUS Chapter 60 under subheading 6005.39.00 as “warp knit fabric,” dutiable at the rate of 10% ad valorem.

After Customs’s initial classification, RKW filed a protest, which was deemed denied. RKW then appealed to the CIT, filing a motion for summary judgment. The government filed a cross-motion for summary judgment. In its motion, RKW contended that the Netwraps should instead be classified under Chapter 84, subheading 8433.90.50 as “parts” of harvesting machinery or alternatively subheading 8436.99.00 as “parts” of other agricultural machinery

The Court concluded the the Netwraps are a disposable input and not a part of round baling machines.

Virginia tactical gear & equipment company agrees to pay more than $2 million to settle allegations related to Berry Amendment

November 20, 2023, Virginia tactical gear & equipment company agrees to pay more than $2 million to settle allegations related to Berry Amendment

• https://www.justice.gov/usao-sdoh/pr/virginia-tactical-gear-equipment-company-agrees-pay-more-2-million-settle-allegations
• London Bridge Trading Company, Ltd. (“LBT”) entered the settlement with the United States and qui tam relator Ann Keating.
• DLA purchased a variety of textile-based products from LBT, including clothing, armor, boots, belts, bags, rope, slings, backpacks and medical pouches. This settlement specifically addressed load-out bags purchased from LBT that violated the TAA and Berry Amendment.
• The civil settlement includes the resolution of claims brought by an employee of LBT under the qui tam provisions of the False Claims Act. These provisions allow a private party, known as a relator, to file an action on behalf of the United States and receive a portion of any recovery. Under the terms of the settlement agreement the relator will receive a share of the proceeds.

PTFE Countervailing Duty Investigation; Notice of Amended Final Determination and Amended Countervailing Duty Order

On October 30, 3023, the International Trade Administration published in the Federal Register (88 FR 74153) Granular Polytetrafluoroethylene Resin From India: Notice of Court Decision Not in Harmony With the Final Determination of Countervailing Duty Investigation; Notice of Amended Final Determination and Amended Countervailing Duty Order.

South Korean Clothing Manufacturer Admits Evading U.S. Customs Duties and Enters Civil Settlement Agreement

Anyclo International Inc. (Anyclo) pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging the company with evading customs duties. Anyclo was also sentenced on this charge today to a criminal fine of $250,000 and ordered to pay restitution to the United States in the amount of $2.05 million.

Anyclo admitted that from Oct. 5, 2012, to Aug. 5, 2019, it evaded customs duties on clothing and apparel that it manufactured abroad and imported into the United States. Anyclo perpetrated the scheme by preparing two invoices for the same shipments: an accurate invoice provided to U.S. purchasers, and a false invoice undervaluing the goods that Anyclo furnished to U.S. Customs. By falsely undervaluing its merchandise, Anyclo drastically underpaid customs duties that it owed based on the true value of those goods.

The civil settlement with Anyclo resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The relator, Yang Sup Cha, will receive 18 percent of the civil settlement amount recovered by the United States pursuant to the False Claims Act.

Read more HERE

CASHMERE AND CAMEL HAIR MANUFACTURERS INSTITUTE’S FALSE ADVERTISING CASE RESOLVED

CCMI and Etsy, Inc. Have Resolved Their Dispute and Look Forward to Collaborating to Protect the Interests of Cashmere Customers, Manufacturers, and Sellers.

BOSTON, MASSACHUSETTS, February 7, 2023 – The Cashmere and Camel Hair Manufacturers Institute (“CCMI”) announced today that its false advertising and unfair competition action in the U.S. District Court for the District of Massachusetts, entitled CCMI v. Etsy, Inc., Case No. 1:22-cv-12242-RWZ, has been finally resolved, avoiding the need for further proceedings in the case.

CCMI’s legal action, filed in the U.S. federal court on December 30, 2022, had challenged the advertising and sale of purported “100% Cashmere” and “Cashmere” garments on Etsy websites in the U.S. and abroad that CCMI had tested and found not to be Cashmere, but rather to be 100% acrylic, polyester, and other synthetic blends.

Fabio Garzena, President of CCMI, said that “CCMI and Etsy have resolved their dispute and look forward to collaborating to protect the interests of Cashmere customers, manufacturers, and sellers.” CCMI has a long history of working to help maintain the integrity of the Cashmere marketplace by providing important information about Cashmere’s value as a high quality luxury fabric, identifying reliable Cashmere testing laboratories and services, and pursuing legal action where appropriate to challenge the mislabeling of purported Cashmere garments and fabric. CCMI’s legal action presented a number of important intellectual property and competition law issues related to the advertising and sale of falsely or misleadingly advertised products over the internet in the international marketplace. CCMI was represented in the action by Robert J. Kaler, a partner in the international law firm of Holland & Knight LLP.

For further information contact: James Coleman, CCMI USA Representative in Boston, MA, at jcoleman@cashmere.org

International Trade Group Files False Advertising Lawsuit Against Etsy

Cashmere & Camel Hair Manufacturers Institute alleges that Garments Are Falsely Advertised as “Cashmere” and “100% Cashmere”

BOSTON, MASSACHUSETTS, January 2, 2023 – The Cashmere and Camel Hair Manufacturers Institute (“CCMI”), a U.S.-based international trade group whose members include some of the world’s largest Cashmere fabric and garment manufacturers, has filed a lawsuit against Etsy, Inc. (Nasdaq: ETSY) in the U.S. District Court for the District of Massachusetts seeking to stop the widespread marketing and sale, both in the U.S. and internationally, of garments that CCMI alleges are being falsely advertised and misrepresented as “100% Cashmere” or “Cashmere” when they are actually either 100% acrylic, a much less expensive, petroleum-based, and more flammable fiber, or are a blend of cheaper synthetic or man-made materials such polyester, nylon, or rayon, and minor percentages of wool.

“CCMI’s position is that a consumer has the right to expect that garments advertised on Etsy as “100% Cashmere” or “Cashmere” will not be materially misrepresented in this way, said Fabio Garzena, President of CCMI, “and when it occurs, CCMI and its members, who make some of the finest Cashmere products in the world, suffer real economic harm. Karl Spilhaus, President Emeritus of CCMI, added that “for more than 35 years, CCMI has been fighting to protect the good name and reputation of Cashmere as a fine specialty fiber; this Etsy case is another chapter in that story.

The Complaint in the action, in which CCMI is represented by Robert J. Kaler, Esq. of the international law firm Holland & Knight, LLP, is available at www.cashmere.org, and details CCMI’s efforts to uncover and challenge the alleged false and deceptive advertising under the applicable U.S. federal and state laws. The name of the case is CCMI v. Etsy, Inc., Civil Action No. 1:22-cv-12242 (D. Mass.).

For further information contact: James Coleman, CCMI USA Representative, at jcoleman@cashmere.org.

New Orleans Company Infringed the Copyright of Fashion Designers, Gucci, Supreme and Burberry,

According to court records, ODAI WIRELESS, LLC, d/b/a “ELITE WIRELESS” infringed the copyright of three fashion designers, Gucci, Supreme and Burberry, when it attempted to import for resale and distribution approximately 1,200 counterfeit cloth masks without the authorization of the three fashion designer copyright holders.

Read more HERE.

Update on China Section 301 Tariff Lawsuits

In September 2020, HMTX Industries LLC, a U.S.- based importer, brought the first of these lawsuits to the CIT. The company, as well as several of its affiliates, challenged the List 3 tariffs, and later amended its complaint to challenge List 4A. Subsequently, approximately 6,000 importers of various goods from China filed similar challenges to the Lists 3 and 4A tariffs as well as List 4B, seeking a refund of duties paid. Collectively, these lawsuits represent the first domestic court challenges to Section 301 tariffs. Not only is this legal challenge unprecedented, but the number of cases is as well. The CIT generally receives a few hundred cases per year; the Section 301 cases, in conjunction with other 2020 filings, increased its caseload by 1,546% from 2019 to 2020.

The CIT has taken several procedural steps reflecting the scope and potentially significant legal implications of these challenges. First, the court assigned all cases to a three-judge panel and created a single “master case” titled In re Section 301 Cases, under which the parties must file all relevant documents. Second, the court decided to manage the disputes by selecting a representative sample of claims, which would be used to assess the legal challenges’ viability and potentially suggest how the court should address the remaining cases. While the test case is considered, all other cases are stayed.

The HMTX case, whose claims served as a model for many subsequent claims, was selected by the CIT to serve as the test case. In their amended complaint, the HMTX plaintiffs contend that (1) the USTR violated procedural requirements for imposing Section 301 tariffs; and (2) the Agency exceeded its statutory authority when imposing the tariffs.

On April 1, 2022, the CIT issued an opinion on the merits. The court first ruled that USTR acted within the authority provided by Section 307 when it imposed additional tariffs under Lists 3 and 4A. Specifically, the court found a “clear connection” between China’s retaliatory actions (i.e., imposition of tariffs on U.S. goods) and USTR’s determination that these retaliatory actions increased the burden on U.S. commerce resulting from China’s unfair acts, policies, and practices such that USTR could rely on Section 307(a)(1)(B) to modify the action.

Although the CIT found that USTR acted within its statutory authority to modify the Section 301 action, it next ruled that USTR violated the Administrative Procedure Act (APA) (5 U.S.C. § 551 et seq.) by failing to respond adequately to public comments in its final action. In particular, the court faulted USTR for failing to explain how USTR arrived at its decision to raise tariffs on particular products despite the numerous public comments contesting the appropriateness of imposing new tariffs and the inclusion or exclusion of particular products. Based on these procedural violations, the court remanded Lists 3 and 4A to USTR for reconsideration or further explanation, but decided to allow the tariffs to remain in place given the “disruptive consequences” of removing them during remand, stating: “For now, the court declines to try to unscramble this egg.”

If USTR chooses to reconsider or provide further explanation, it must submit its decision to the CIT by June 30, 2022. Alternatively, USTR and the plaintiffs may seek to appeal the CIT’s ruling.

Agathon Associates raised questions about the legality of the List 3 tariffs in this September 18, 2018 blog.

Omaha Woman Sentenced for Trafficking in Counterfeit Apparel, Blankets, and Travel Goods

Acting United States Attorney Jan Sharp announced that Paw Moo, age 29, of Omaha, Nebraska, was sentenced on December 10, 2021 in federal court in Omaha for trafficking in counterfeit goods. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Moo to probation for a term of three years.

In February 2021, U.S. Customs and Border Protection in Anchorage, Alaska, seized a shipment of counterfeit designer purses destined for Moo’s residence in Omaha, Nebraska. On March 23, 2021, Homeland Security Investigations (HSI), using an undercover officer, executed a controlled delivery of the seized package to Moo’s residence in Omaha. Moo accepted the package and HSI agents executed a search of her residence where numerous items with counterfeit marks were located. The items were handbags, clothes, blankets, phone cases, belts and a wallet from brands to include Louis Vuitton, Chanel, Gucci, Yves St. Laurent, Michael Kors, Coach and Nike. The total manufacturers’ suggested retail price of the seized merchandise exceeded $118,000.

Moo stated she began to sell items online from her residence in the beginning of March 2020 and began selling counterfeit items in the Fall of 2020, a timeframe that was consistent with her importation history.

This case was investigated by Homeland Security Investigations.

Cashmere and Camel Hair Manufacturers Institute’s False Advertising Lawsuit Resolved

On December 7, 2021, the Cashmere and Camel Hair Manufacturers Institute (“CCMI”) announced that its false advertising and unfair competition action in the U.S. District Court for the District of Massachusetts, entitled CCMI v. Amazon.com, Inc. and CS Accessories LLC, Case No. 1:21-cv-11872-WGY, has been finally resolved, avoiding the need for a trial that was scheduled to commence in Boston on Tuesday, December 7, 2021.

CCMI’s legal action, filed in the U.S. federal court on November 18, 2021, had challenged the advertising and sale of purported “100% Cashmere” garments on Amazon websites in the U.S. and abroad that CCMI had tested and found to be 100% Acrylic, Polyester, and other synthetic materials. As part of the resolution of the action, a major supplier of many of the garments, defendant CS Accessories, agreed to the entry of a Final Judgment permanently enjoining it from advertising or selling garments of any kind falsely labeled as “Cashmere.”

Fabio Garzena, President of CCMI, said that “CCMI and Amazon have resolved their dispute and look forward to collaborating to protect the interests of Cashmere customers, manufacturers, and sellers.” CCMI has a long history of working to help maintain the integrity of the Cashmere marketplace by providing important information about Cashmere’s value as a high quality luxury fabric, identifying reliable Cashmere testing laboratories and services, and pursuing legal action where appropriate to challenge the mislabeling of purported Cashmere garments and fabric.

CCMI’s legal action presented a number of important intellectual property and competition law issues related to the advertising and sale of counterfeit products over the internet in the international marketplace. CCMI was represented in the action by Robert J. Kaler, a partner in the international law firm of Holland & Knight LLP.

For further information contact: James Coleman, CCMI USA Representative in Boston, MA, at jcoleman@cashmere.org

International Trade Group Files False Advertising Lawsuit Against Amazon

The Cashmere and Camel Hair Manufacturers Institute alleges that Garments Advertised by Amazon as “100% Cashmere Made in Scotland” are Actually 100% Acrylic not made in Scotland

The Cashmere and Camel Hair Manufacturers Institute (“CCMI”), whose members include major Cashmere fabric and garment manufacturers, distributors and retailers in the United States and abroad, has filed a lawsuit in the U.S. District Court for the District of Massachusetts seeking to stop Amazon’s widespread marketing and sale, both in the U.S. and internationally, of garments that CCMI alleges are being falsely advertised and misrepresented as “100% Cashmere” when they are actually made entirely of a type of synthetic, petroleum-based acrylic that is much cheaper, less warm and more flammable than Cashmere, and contains chemicals that are not present in Cashmere.

“A consumer has the right to expect that garments offered by an established retailer like Amazon will not be materially mislabeled and misrepresented in this way, said Fabio Garzena, President of CCMI, “and when it occurs, CCMI and its members, who make some of the finest Cashmere products in the world, suffer real economic harm. Karl Spilhaus, President Emeritus of CCMI, added that “for more than 35 years, CCMI has been fighting to protect the good name and reputation of Cashmere as a fine specialty fiber; this is the latest chapter in that long story.

The complaint in the action, in which CCMI is represented by Robert J. Kaler of Holland & Knight, is available at www.cashmere.org, and details CCMI’s efforts to uncover and challenge the mislabeling at issue. The name of the case is CCMI v. Amazon.com, Inc., et al, Civil Action No. 1:21-cv-11872-WGY.

For further information contact: James Coleman, CCMI USA Representative, at jcoleman@cashmere.org

Business Groups File Amicus Brief Calling USTR Tariffs Process ‘Flawed’

On August 9, 2021, the Retail Litigation Center, the National Retail Federation, the American Apparel & Footwear Association, the Consumer Technology Association, the Footwear Distributors and Retailers of America, the Juvenile Products Manufacturers Association and the Toy Association today filed a “friend of the court” amicus brief in the U.S. Court of International Trade. The trade groups submitted the brief in support of businesses and their workers that have been negatively impacted by a series of escalating tariffs covering virtually all Chinese imports to the United States imposed by the United States Trade Representative (USTR).

In 2018, following a Section 301 investigation into China’s trade practices regarding forced technology transfer and intellectual property rights protection, the Trump Administration initiated several massive tariffs against Chinese imports. Thousands of American businesses have been forced to pay these taxes to import Chinese goods and products, which ultimately result in higher prices for U.S. consumers. The Biden Administration has kept these tariffs in place when American businesses are doing their best to safely serve customers, and keep workers on their payrolls, during the pandemic.

In September 2020, more than 6,000 plaintiffs filed lawsuits challenging the List 3 and List 4A tariffs as unlawful under Section 301 of the Trade Act of 1974 arguing that the USTR exceeded its authority when it imposed tariffs without attempting to connect them to any underlying investigation of China’s trade practices. The amicus brief supports the plaintiffs’ arguments and highlights USTR’s violation of its statutory obligations under the Administrative Procedure Act by failing to give adequate opportunity for, or consideration of, public comments.

(Lack of adequate opportunity for, or consideration of, public comments was an objection raised by Agathon Associates on behalf of clients in a Septebmer, 2018, blog post, which also suggested that injured parties may wish to consider suing the government.)

The staggering scale and far-reaching effects of the proposed tariffs required USTR to take a thoughtful approach consistent with its statutory obligation under the Administrative Procedure Act. Instead, USTR imposed compressed public-comment timelines, which often gave businesses only a few days to analyze the impacts on supply chains and retail operations and develop thoughtful comments. To make matters worse, despite receiving nearly 10,000 comments and pieces of testimony, the overwhelming majority of which opposed the tariffs, USTR refused to respond to any of the identified concerns.

According to the amicus brief:

“Those proposed tariffs implicated hundreds of billions of dollars of imports and impacted almost every facet of the U.S. economy. Many stakeholders, including amici’s members must plan out their international supply chains and delivery schedules months in advance. Not surprisingly, these businesses needed time to review the hundreds of thousands of products they sell to evaluate the availability and feasibility of alternative non-Chinese sources and to assess impacts on supply chains and retail operations.”

“If USTR had satisfied its obligation to allow for meaningful comments from amici and others and had actually considered them, it would have recognized the considerable harm its actions would inflict. The tariffs are a hidden tax on U.S. consumers, hurting domestic producers, retailers, and customers alike. And, as predicted, they have had a significant adverse impact on the U.S. economy.”

The amicus brief was written by Joseph R. Palmore and Adam L. Sorensen of Morrison & Foerster LLP. View the amicus brief in its entirety here