USTR Needs 60 More Days to Meet Section 301 Remand Order, Says DOJ

With less than two weeks to spare before the June 30 deadline for the Office of the U.S. Trade Representative to file its remand results in the Section 301 litigation, the agency needs a 60-day extension to Aug. 29 due to the volume of work involved, the agency’s limited staff resources and other projects that are compounding its workload, said DOJ’s motion Friday in docket 1:21-cv-52 at the U.S. Court of International Trade. Akin Gump lawyers for test-case plaintiffs HMTX Industries and Jasco Products oppose the motion and will soon file a response, said DOJ. Matthew Nicely, Akin Gump’s lead attorney, declined comment Friday.

The court, in its April 1 opinion, remanded the Lists 3 and 4A tariffs to USTR after ruling against the government that the agency failed to adequately respond to comments and hearing testimony in advance of the duties, as it was required to do under the Administrative Procedure Act (see 2206170028). But the court's three-judge panel ruled the tariffs would remain in place while the agency reconsidered its rulemaking actions. The judges gave USTR 90 days, until June 30, to respond to the remand order.

Good cause exists for the court to grant the deadline extension, said DOJ. Since the opinion, USTR has been “diligently preparing” the remand results by sifting through the more than 9,000 Lists 3 and 4A public comments it received, including identifying comments involving each of the issues that the opinion “identified as requiring a response,” it said. “In order to do this, USTR is engaging in a manual review and organization of the comments.”

USTR, said the opinion, was required under the APA “to address comments regarding any duties to be imposed, the aggregate level of trade subject to the proposed duties, and the products covered by the modifications, all in light of Section 301’s statutory purpose to eliminate the burden on U.S. commerce from China’s unfair acts, policies, and practices.” USTR’s various statements of “basis and purpose” about the Lists 3 and 4A tariffs “fail to apprise the court” how the agency “came to its decision to act and the manner in which it chose to act, taking account of the opposition and support for the increased duties and the inclusion or exclusion of particular subheadings, the concerns raised about the impact of the duties on the U.S. economy, and the potential availability of alternative courses of action,” said the opinion.

USTR, in preparing the remand results, also is reviewing “the thousands of pages" of testimony from 13 days of public hearings during the List 3 and List 4 notice-and-comment periods, said DOJ’s motion. More time is needed to complete the work, "given the volume of information under review, the limited resources available within USTR to conduct this review" and given "the numerous competing deadlines" the agency has had to meet during the remand period, it said.

When the court issued its order, USTR had only four lawyers and seven support staff available to work on the remand results, and has since added only one support employee, said DOJ. That compares with a staff of “at least” 30 people on hand during the List 3 notice-and-comment period and about 19 for List 4A, it said.

USTR employees working on the remand results also have had “several additional time-consuming projects” imposed on them, including the extension of COVID-19 tariff exclusions announced May 27 and the start of the “mandatory four-year review” of the tariff actions announced May 3, said DOJ. Commencing the statutory four-year review was especially burdensome on the agency, it said. USTR staff needed to review the nearly 13,000 comments received on the four rounds of tariffs “to identify persons who supported the trade action in order to notify them of their opportunity to request review of the actions taken under Section 301,” it said.

As with its other projects, “USTR staff had to draft various internal memoranda and produce other deliberative documents to assist policy makers in decision making,” plus engage with outside committees and mail more than 600 “notification letters” to interested people as part of the four-year review, said DOJ. “USTR staff also had to develop an electronic portal for submitting requests to continue the actions taken under Section 301,” it said. Agency employees “have dedicated numerous hours to these projects during the 90-day period, while also diligently working on responding” to the court’s remand order, it said.

As the June 30 deadline nears for the remand results, USTR staff “are also considering possible options for a new exclusion process,” said DOJ. “This preparation has included the development of possible options for policy makers.” President Joe Biden has said his administration is studying whether to roll back some of the tariffs on Chinese imports in an effort to curb inflation, but has made no previous mention publicly of a new exclusion process.