The Court of International Trade ruled May 9 that an importer would recoup 22.4% of Section 301 duties it paid on an entry of kids’ erasable e-writing tablets from China.
Section 301 Tariffs
Section 301 Tariffs are levied under the Trade Act of 1974 which grants the Office of the United States Trade Representative (USTR) authority to investigate and take action to protect U.S. rights from trade agreements and respond to foreign trade practices. Section 301 of the Trade Act of 1974 provides statutory means allowing the United States to impose sanctions on foreign countries violating U.S. trade agreements or engaging in acts that are “unjustifiable” or “unreasonable” and burdensome to U.S. commerce. Prior to 1995, the U.S. frequently used Section 301 to eliminate trade barriers and pressure other countries to open markets to U.S. goods.
The founding of the World Trade Organization in 1995 created an enforceable dispute settlement mechanism, reducing U.S. use of Section 301. The Trump Administration began using Section 301 in 2018 to unilaterally enforce tariffs on countries and industries it deemed unfair to U.S. industries. The Trump Administration adopted the policy shift to close what it deemed a persistent "trade gap" between the U.S. and foreign governments that it said disadvantaged U.S. firms. Additionally, it pointed to alleged weaknesses in the WTO trade dispute settlement process to justify many of its tariff actions—particularly against China. The administration also cited failures in previous trade agreements to enhance foreign market access for U.S. firms and workers.
The Trump Administration launched a Section 301 investigation into Chinese trade policies in August 2017. Following the investigation, President Trump ordered the USTR to take five tariff actions between 2018 and 2019. Almost three quarters of U.S. imports from China were subject to Section 301 tariffs, which ranged from 15% to 25%. The U.S. and China engaged in negotiations resulting in the “U.S.-China Phase One Trade Agreement”, signed in January 2020.
The Biden Administration took steps in 2021 to eliminate foreign policies subject to Section 301 investigations. The administration has extended and reinstated many of the tariffs enacted during the Trump administration but is conducting a review of all Section 301 actions against China.
The Court of International Trade on May 6 granted importer van Gelder's motion to set aside the dismissal of its customs lawsuit, which occurred due to a calendaring mistake from the company's counsel. Judge M. Miler Baker reopened the case and reset the deadline to remove the case from the Customs Case Management Calendar to April 30, 2025 (van Gelder v. United States, CIT # 21-00160).
In a May 9 ruling, Court of International Trade Judge Claire Kelly held that importer Kent Displays’ children’s e-writing tablets from China were finished electronic goods under Harmonized Tariff Schedule heading 8543, as the government argued, not duty-free LCD screens under heading 9301, as the importer claimed. The holding mooted the dispute about whether Kent’s entry was exempt from Section 301 duties, as at the time the goods were imported, the tariff doesn't cover the relevant tariff subheading. Instead, the importer will owe a 2.6% duty (Kent Displays v. U.S., CIT # 20-00156).
The Customs Rulings Online Search System (CROSS) was updated May 6 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
Importer van Gelder on May 3 moved to set aside the Court of International Trade's dismissal of its case for failure to prosecute, arguing that its counsel "overlooked -- by virtue of a calendaring mistake" -- the new deadline for the case after it was extended on the customs case management calendar (van Gelder v. U.S., CIT # 21-00160).
Importer Netgear filed a complaint at the Court of International Trade on April 26 seeking reliquidation of re-imported LTE routers under duty-free Harmonized Tariff Schedule subheading 9802.00.50. The company is seeking refunds of any overpayments of Merchandise Processing Fees and Harbor Maintenance Fees, along with a refund of Section 301 duties (Netgear v. United States, CIT # 22-00129).
Importer MKI Enterprise Group, doing business as Winbo USA, filed a complaint at the Court of International Trade on April 22 to contest CBP's denial of a Section 301 exclusion for its entries of "steel side protective attachments for motor vehicles, specifically side bars, fern bars, and bars" from China (MKI Enterprise Group v. United States, CIT # 22-00131).
The Customs Rulings Online Search System (CROSS) was updated April 18 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
The following lawsuit was recently filed at the Court of International Trade:
The U.S. defended its decision to calculate energy costs for a review's mandatory respondent directly rather than as part of the respondent's selling, general and administrative costs, in a Feb. 27 motion, saying that the calculation was made more accurate because the Commerce Department had been given better information from a surrogate than it had ever received before (Neimenggu Fufeng Biotechnologies Co. v. U.S., CIT # 23-00068).