USTR Twice Failed to Meet Its APA Obligations, Say Section 301 Amici

The U.S. 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 Wednesday in docket 1:21-cv-52 from the Retail Litigation Center, CTA, National Retail Federation and four other trade associations. With USTR’s “non-responsive” answer Aug. 1 to the remand order, the time has come for the court “to impose the normal remedy for unlawful agency action” by vacating the Lists 3 and 4A tariffs and ordering them refunded, it said.

After USTR responded “to none of the thousands of critical comments it received during its initial rulemaking process” for the tariffs, the court “remanded to give USTR another opportunity to explain itself,” said the brief. “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,” said the brief. 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, said the brief.

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,” said the brief. 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,” said the brief. 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,” said the brief.

In an unexpected twist, three importers sought court permission Wednesday to file their own amicus brief, also arguing for the 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,” said their motion for leave.

Akin Gump lawyers for lead plaintiffs HMTX Industries and Jasco Products, who were due to file their own response to USTR’s remand results by the close of business Wednesday, take no position on the motion, said Verifone, Drone Nerds and Specialized. 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, said the importers. The scheduling order gave the Wednesday 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, said the importers’ proposed brief. 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.