On August 2, 2021, the plaintiff group in the ongoing Section 301 tariff refund litigation at the U.S. Court of International Trade (CIT) filed a Cross-Motion for Judgment on the Agency Record and a Response to the Government’s Motion to Dismiss. In seeking judgment and asking that the government defendants’ motion be denied, the plaintiff group seeks a ruling that the government defendants unlawfully took retaliatory action against China in promulgating modifications to the Section 301 action of the U.S. Trade Representative (USTR) against China under the Trade Act of 1974 (Trade Act). The plaintiff group further seeks a ruling vacating USTR’s List 3 and List 4A and requiring a refund, with interest, of any duties paid by the plaintiff group on entries of products appearing on these two lists. The U.S. Department of Justice (DOJ), representing the U.S. government defendants, filed its motion to dismiss and, in the alternative, a motion for judgment on the agency record on June 1, 2021. For additional details and links to that motion, see Update of June 4, 2021.

In its motion, the plaintiff group claims that the government defendants exceeded their authority under the Trade Act with the implementation of these lists and argue that the ensuing tariff actions violated the Administrative Procedure Act (APA). The argument begins by stating that this case “presents a critical question: whether there are enforceable limits on the Executive Branch’s ability to expand a tariff action under Section 301 et seq. of the Trade Act of 1974 (Trade Act) for however long, by whatever amount, and by whatever means it chooses.” The plaintiff group notes that after imposing tariffs on $50 billion of imports from China following the Section 301 investigation – an amount it deemed “commensurate” to the harm caused by China’s unfair trade actions and not under challenge in this litigation – the USTR then announced “supplemental” tariffs as “modifications” to cover “another roughly $500 billion of imports from China, i.e., virtually the entirety of U.S. annual imports from China.” In doing so, the motion argues, this was a “radical escalation of tariffs” that “transgressed the statutory limits carefully delineated by Congress when delegating the exercise of its constitutional foreign-trade powers to the Executive Branch” and “trampled on the Trade Act’s clear limits.”

The plaintiff group’s cross-motion for judgment and response to the government’s motion effectively sets forth the following arguments:

  • The implementation of List 3 and List 4A is ultra vires and contrary to law since the Trade Act, absent a new investigation, does not allow the USTR to increase penalties imposed following a targeted Section 301 investigation. While Section 307 of the Trade Act allows the USTR to “modify or terminate” an action under two circumstances, neither, the motion argues, is present here. The defendants’ “open-ended reading of the Executive Branch’s Section 307 modification authority” amounts to “an unconstitutional delegation of Congress’s authority to levy duties and regulate foreign commerce.”
  • The government defendants’ “justiciability” arguments (i.e., these were presidential actions and not agency actions) are meritless. The plaintiff group argues that this case “challenges a final agency action taken by USTR, not by the President” and the government defendants has referenced no support for its argument that “an agency acting pursuant to Presidential direction is permanently shielded from judicial review.”
  • The government defendants violated the APA’s prohibition on “agency action in excess of statutory authority or otherwise contrary to law” and by failing to provide adequate public notice and opportunity to comment on proposed rules, to meaningfully consider the comments they received, and to avoid acting in an arbitrary and capricious manner.

The motion concludes with a request that the CIT grant the plaintiff group’s cross-motion for judgment on the agency record and deny the government’s motion to dismiss. Next on the briefing schedule is an August 9, 2021 deadline for the filing of any amicus curiae briefs in support of either the plaintiff group’s or the government defendants’ motions. The government defendants will then file a combined reply supporting their dispositive motion and response to the plaintiff group’s cross-motion by October 1, 2021, with the plaintiff group filing its reply supporting its cross-motion by November 15, 2021.