By SEMA Washington, D.C., Staff
The U.S. Court of International Trade ruled that the Trump administration had sufficient authority to impose tariffs on nearly $320 billion worth of Chinese goods even though the U.S. Trade Representative (USTR) did not adequately explain the rationale for the tariffs. As a result, the Court will not overturn the tariffs imposed on the so-called Lists 3 and 4a goods. List 3 covers most auto parts imported from China, from engines and metal fasteners to tires and brake pads.
In 2018, the USTR instituted a Section 301 investigation of Chinese trade practices and imposed $50 billion in tariffs on a variety of goods on Lists 1 and 2, including miscellaneous metal and rubber parts. The tariffs were intended to serve as bargaining chips in trade negotiations between the two countries. After China responded with retaliatory tariffs, the U.S. imposed the additional List 3 and 4a tariffs. The List 3 tariffs began at 10% in September 2018 but increased to 25% in May 2019.
More than 6,000 importers challenged the List 3 and 4a tariffs as not being within the scope of the original Section 301 unfair trade investigation. The Court ruled that there was sufficient nexus tying the tariffs to the investigation but ordered the USTR to provide the Court with further explanation and justification for the List 3 and 4a tariffs. The USTR was specifically directed to explain in greater detail how it decided to include or exclude particular tariff code subheadings, concerns raised about the impact of the duties on the U.S. economy, and potential alternative courses of action.
For more information, contact Caroline Fletcher at carolinef@sema.org.