USTR's Refusal to Strike Withdrawn Statements Was Within the Office's Discretion, DOJ Argues
The Office of the U.S. Trade Representative was within its discretion when it declined to reinstate a Section 301 tariff exclusion on water coolers even after the only opposing party withdrew its comments, the DOJ said in an April 28 response to DS Services of America's remand comments at the Court of International Trade (DS Services of America v. United States, CIT # 22-00157).
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The DOJ asked the court to sustain the remand redetermination and enter judgment for the U.S. because USTR’s decision, in which it declined to reinstate the exclusion from duties pursuant to Section 301 of water coolers under Harmonized Tariff Schedule subheading 8418.69.01.
USTR’s process for reinstating tariffs was based on the agency's voluntary adoption of an exclusion process that the DOJ described as "highly discretionary." USTR considered allowing Natural Choice's comment withdrawal and reasonably concluded that permitting the withdrawal seven months after the docket closed would present significant administrative issues, such as a perpetual comment period, the DOJ said.
DS Services had a “heavy burden” of establishing that USTR’s remand is not the product of reasoned decisionmaking, which it did not meet. The company's objections amounted to simple disagreement with USTR’s reasoning, which was not a sufficient basis for the court to overturn an agency decision, the DOJ said.
There was no merit to the position that USTR “improperly rejected" Natural Choice’s comment withdrawal request, the DOJ said. USTR considered Natural Choice’s request to withdraw its comment and explained why it declined to strike that comment from the record. USTR's communications with Natural Choice after the comment withdrawal request show that USTR properly considered the request, the DOJ said.
In October 2021, USTR announced that it was considering the possible reinstatement of previously extended exclusions and invited the public to comment on whether to reinstate particular exclusions, including the water cooler exclusion. Only Natural Choice filed a comment opposing the reinstatement, claiming that it produced such water coolers, but asked to withdraw the comment after several months, explaining that it believed that it manufactured products that “if imported, would be covered by the Water Cooler Exclusion.”
DS Services filed suit after the exclusion was denied despite Natural Choice withdrawing its comment. DS Services argued that USTR violated the Administrative Procedure Act because the office failed to both explain its decision and to back up the decision with substantial evidence, given Natural Choice's withdrawal. USTR then requested a voluntary remand to reconsider the item (see 2209010023).
In December 2022, USTR released its remand results, in which it stuck by its decision not to reinstate the tariff exclusion for the water coolers (see 2212150043). DS Services said that USTR’s remand decision failed to consider that the only objection to the reinstatement of the exclusion, and the "only possible justification" not to reinstate the exclusion, was withdrawn (see 2302280036).