USTR Twice Failed to Meet Its APA Obligations, Section 301 Amici Tell Trade Court

The Court of International Trade “bent over backwards” to allow the Office of the U.S. Trade Representative to comply with its Administrative Procedure Act obligations in its imposition of the lists 3 and 4A Section 301 tariffs on Chinese goods when it remanded the duties to the agency for further explanation on the rationale for the actions it took in the context of the comments it received, said an amicus brief filed Sept. 14 in the massive Section 301 litigation from the Retail Litigation Center, CTA, the National Retail Federation and four other trade associations. With USTR’s “non-responsive” answer to the remand order, the time has come for the court “to impose the normal remedy for unlawful agency action” and to vacate the lists 3 and 4A tariffs, it said (In Re Section 301 Cases, CIT #21-00052).

After USTR responded “to none of the thousands of critical comments it received during its initial rulemaking process” for the lists 3 and 4A tariffs, the court “remanded to give USTR another opportunity to explain itself,” the brief said. “In response to the many detailed objections to the proposed tariff actions, however, USTR offered only deflection and conclusory declarations,” it said. “Now, twice the agency has shown itself incapable of meeting its legal responsibilities” under the APA, it said.

USTR’s remand response “is inadequate because it fails to address significant comments, and offers only non-responsive, immaterial, and post hoc explanations,” the brief said. On explaining its rationale for List 3, USTR “devoted a grand total of one sentence to the concerns raised” by stakeholders about potential economic harm from the tariffs, it said. Its remand response asserted that the agency “took account of likely impacts” on U.S. consumers and removed subheadings identified by analysts as likely to cause disruptions to the U.S. economy, the brief said.

But that statement “gives no indication of which ‘impacts’ the agency considered ‘likely,’ how it reached that conclusion, or how removal of particular subheadings would ‘account’ for them,” the brief said. USTR’s remand response “did no more than parrot its own prior explanation published in July 2018,” it said.

USTR’s “cursory discussion” of economic harm from List 4 “is likewise deficient,” the brief said. The agency suggested that the government’s own decision to include all remaining imports from China on List 4 carried with it the need for USTR to include consumer products on the final list, it said. “That is completely circular.” USTR “was obligated to respond with something more than a statement that it imposed tariffs on all remaining products because it had decided to impose tariffs on all remaining products,” the brief said.

In an unexpected twist, three importers sought court permission Sept. 14 to file their own amicus brief arguing for the lists 3 and 4A tariffs to be vacated for APA violations. The importers -- Verifone, Drone Nerds and Specialized Bicycle Components -- are “interested parties” to the litigation, as they are “individual claimants” among the thousands of Section 301 lawsuits filed, and because they “do business in and with China,” their motion for leave said.

Akin Gump lawyers for lead plaintiffs HMTX Industries and Jasco Products, who filed their own response to USTR’s remand results on Sept. 14, took no position on the motion, Verifone, Drone Nerds and Specialized Bicycle said. DOJ “does not consent” to the motion because it’s “inconsistent” with the court’s Aug. 15 scheduling order, but the government has no plans to file an opposition, the importers said. The scheduling order gave the Sept. 14 deadline for a “potential” brief that mentioned only the Retail Litigation Center amici.

Complying with the demands of then-President Donald Trump was USTR’s “primary consideration” in imposing the lists 3 and 4A tariffs, while it “ignored” the APA, the importers’ proposed brief said. Roughly two-thirds of the tariff headings removed from List 3 were later added to the proposed List 4, and more than 90% of those headings were included in the final List 4, they said. USTR’s exclusion process “does not remedy the inappropriate re-inclusion of prior exemptions,” they said.