Customs duty

The Court of International Trade will stop liquidation of unliquidated entries subject to litigation over List 3 and List 4A Section 301 China tariffs, a CIT panel said in a July 6 opinion (Court No. 21-00052). Granting a preliminary injunction, Judges Claire Kelly and Jennifer Choe-Groves held that questions over limitations on CIT's ability to reliquidate the entries or grant a monetary judgment mean the Section 301 plaintiffs risk irreparable harm in the absence of one. Chief Judge Mark Barnett dissented, arguing that the court does have the power to reliquidate, and that the resulting lack of irreparable harm weighed against granting the injunction.

The Court of International Trade will stop liquidation of unliquidated entries subject to the List 3 or 4A Section 301 China tariffs imported by the thousands of plaintiffs in the Section 301 litigation, a majority of judges on the three-judge CIT panel said in a July 6 opinion that granted a preliminary injunction. "To give the parties time to implement appropriate procedures, gather pertinent information, and otherwise take necessary action to comply with this order, the court will temporarily restrain liquidation of any unliquidated entries of merchandise imported from China by any plaintiffs in the Section 301 Cases which are subject to List 3 or List 4A duties," it said.

Sen. John Cornyn, R-Texas, introduced a bill that would require a study of whether Canadian and Mexican manufacturers are able to get tariff breaks on non-North American inputs to their goods, and if so, does that affect the cost-competitiveness of products manufactured in the U.S. for domestic and export markets. Cornyn led an unsuccessful effort to convince the Office of the U.S. Trade Representative in 2020 that goods produced inside foreign-trade zones should be treated as products of the U.S. (see 2012020031).

Republican Rep. Mo Brooks, who has former President Donald Trump's endorsement in the 2022 Senate race in Alabama, has introduced a bill that would impose an additional 10% duty on Chinese imports and on Chinese components that are part of goods imported from all other countries from the time the bill passes through the end of 2021. The bill would make the punitive tariff 20% in 2022, and would increase the tariff by 10 percentage points each year until the duties collected "equals or exceeds the total amount necessary to provide full compensation and reimbursement relating to COVID–19."

The Republicans on the House Ways and Means Committee expressed disappointment at the Generalized System of Preferences bill introduced by the Trade Subcommittee chairman, so they introduced their own version, which is identical to the amendment that passed the Senate with 91 votes. The bill, introduced June 22 by the top Republicans on the committee and the subcommittee, also renews the Miscellaneous Tariff Bill, but with a few more products removed from the list after additional objections in the House. According to an analysis by Crowell and Moring, the Senate MTB covers 1,423 products, and the House Democrats' version covers 1,363 products. A spokesperson for Rep. Vern Buchanan, R-Fla., said the Republican bill covers the same MTB list as the Democrats' bill.

Canada has requested a state-to-state dispute panel over the U.S. safeguard tariffs against Canadian solar cells and panels, because under USMCA, and NAFTA before it, safeguards are not supposed to apply in North America if the exports from either Canada or Mexico are not contributing to serious injury in the domestic market. The International Trade Commission said Canada was not contributing to the harm to the U.S. solar manufacturing industry. Several members of the Washington state delegation to Congress have also argued Canada should not be a target, both for that reason, and because exempting Canada could add to jobs in solar manufacturing in their state (see 2106090066).

The Generalized System of Preferences benefits program renewal and Miscellaneous Tariff Bill, as revenue bills, must start in the House, and Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., has a distinctly different take on the longstanding programs than the version that recently passed the Senate with 91 votes.

It could take two to three years to resolve the massive Section 301 litigation now before the Court of International Trade, especially since it’s “highly likely” the case will be appealed by whichever side loses, David Cohen, a trade expert with Sandler Travis, said on his law firm's webinar June 15. Roughly 3,800 importers are suing the government to declare the lists 3 and 4A tariffs on Chinese goods unlawful and get the money refunded.

The U.S. Court of Appeals for the Federal Circuit on June 15 affirmed without opinion a lower court ruling that found women’s trousers made of a yarn extruded from a slurry that contained zinc nanoparticles are not classifiable in the tariff schedule as if they were made from metallized yarn. The appeals court’s Rule 36 judgment follows oral argument held Oct. 10 in the case, appealed by Lockhart Textiles. The decision is non-precedential, and contains no explanation.

Importers must file protests to preserve their ability to obtain refunds under exclusions from Section 301 tariffs, the Court of International Trade said in a June 11 decision. Dismissing a lawsuit from importers ARP Materials and Harrison Steel Castings, Judge Miller Baker found the court did not have jurisdiction to hear their challenge since the importers did not timely file protests of the CBP liquidations assessing the Section 301 duties.