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Decision on Section 301 List 3 and 4A

The Court of International Trade has issued a decision in the lead case challenging the Section 301 duties on products of China covered by List 3 and 4A.  This case is almost unique in the number of plaintiffs and law firms involved. The most similar prior circumstance involving as much of the customs and trade bar was the litigation involving Harbor Maintenance Tax, which went all the way to the U.S. Supreme Court in 1998 resulting in a decision called United States v. U.S. Shoe Corp .  For purposes of this blog, this raises an issue. My firm, like dozens of other firms, has plaintiffs asserting the same claims. The matter is ongoing and, therefore, I don't want to say much about anything. So here is the short version. The Court previously remanded the matter to the USTR to provide a better explanation of how the record demonstrates that the agency properly engaged with public comments in opposition to the List 3 and 4A tariffs including the size of the remedy and whether there w
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Revenge of the Hobgoblin

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There is a saying, attributed to Thoreau that “Foolish consistency is the hobgoblin of feeble minds.” The point of that seems to be that doing something the same way solely for the reason of maintaining consistency is a poor strategy. For trade compliance that is often true. The fact that a manager who retired from accounting in 1995 once said that none of your company’s tooling expenses are dutiable is not a solid reason for failing to report dutiable assists in 2023. Maybe in 1995 all the tooling was in the U.S., and it is now all over the globe. Consistency for the sake of consistency is not a good enough reason to maintain a compliance process. There should be some underlying reason to believe the process is legally correct. On the other hand, inexplicable inconsistency can be evidence of fraud. An ongoing penalty case in the Court of International Trade is a good example. The case is United States v. Crown Cork & Seal USA, Inc . The case contains a good overview of the p
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Cyber Power Decision Keeps the Lights On Origin

The Court of International Trade has issued the much anticipated (at least by me) decision on the merits in Cyber Power Systems (USA) Inc. v. United States . It's a bit of a roller coaster ride. The plaintiff clearly hits some bumps along the way, but there is a thrilling conclusion. So, buckle up. The case is about the country of origin of five models of uninterruptible power suppliers ("UPS") and one surge protector. The UPS is essentially a glorified backup battery for computers and other devices. In the event of a power failure, the UPS kicks in to power the device and may assist in a "graceful shutdown." Modern UPS include printed circuit board assemblies that monitor the battery to ensure it is fully charged, monitor the available supply of electricity, switch to the battery when needed, provide status reports and other functions. All of that takes some firmware stored in chips on the boards. The surge protector is a simpler, but still electronic device, t
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CIT to Meyer: Still No First Sale for Value

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Remember Meyer Corp. v. United States ? We discussed the original CIT decision in this post from 2021. That decision caused many quizzical discussions among trade nerds about whether the fact that a multi-tiered sale starts in China, a non-market economy, undermines an importer's ability to claim valuation for duty on the basis of the first sale. The Court of International Trade suggested that the Court of Appeals for the Federal Circuit might have to clarify. If none of this seems familiar to you, go back and read the earlier post. In August of 2022, the Federal Circuit provided that clarification . That must have happened while I was in the "Blog Black Hole" of 2021-2022, which I am trying to dig out of now (you may have noticed). The decisive part of that decision states: The trial court misinterpreted our decision in Nissho Iwai to require any party to show the absence of all “distortive nonmarket influences.” There is no basis in the statute for Customs or the cour
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PrimeSource Overturned at Federal Circuit

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Section 232 of the Trade Expansion Act of 1962 allows the President, following an investigation by the Department of Commerce, to adopt a plan of remedial action to protect the national security from harm caused by imports. The statute has several procedural requirements including that the Commerce Department complete its investigation within 270 days and that the President decide within 90 days of receiving the report whether the President concurs in Commerce's finding. If so, the President must come up with a plan of action, including the steps that "must be taken to adjust the imports of the article and its derivatives so that such imports will not threaten to impair the national security." For this discussion, the key point is that the President must implement the plan within 105 days of the findings in Commerce's report. On March 8, 2018, President Trump imposed 25% duties on listed steel products in an effort to ensure that U.S. steel production was operating
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Acquisition 362 and Protests of Countervailing Duties

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Welcome back to what I hope is a more consistent flow of updates. I have a couple in the hopper, so come back soon. Importers of goods subject to antidumping and countervailing duties often find themselves dealing with unexpected compliance issues. Acquisition 362, LLC v. United States , a recent decision from the Court of Appeals for the Federal Circuit, is a good example of how this can go sideways.  Aquisition is an importer of tires from China that are subject to a countervailing duty order. As a result, Acquisition deposited CV duties at the rate of 30.61%, which was the rate applicable to tires from "all-other" producers and exporters at the time of entry. When Commerce instituted a review of the deposit rate, it instructed Customs to continue to suspend the liquidation of entries from companies participating in the review, including a company known as Shandong Zhongyi, which was Aquisition's nominal suppler.  Unfortunately for Aquisition, Shandong withdrew from the
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Exporters To US Should Share Importers' Compliance Burdens

Over the years, I have seen many importers in trouble with the government because of inaccurate or possibly fraudulent information provided by a supplier. Many of those importers have performed layers of due diligence and sometimes still end up on the wrong side of a Customs penalty or seizure. While importers are and should be responsible for the goods they import and the representations they make to the government, it is frustrating for importers who tried to comply with the law at least in part relying on supplier representations. After ruminating on that, I wrote this musing on the burdens of international trade, which Law360 was kind enough to publish. You can access Law360 on a trial subscription.  Here is a link to the article . Or (consistent with the Law360 agreement), there is a PDF you can read here . 
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