Court orders agency to provide better explanation for List 3 and List 4A by June 30, 2022.
On April 1, 2022, a three-judge panel of the U.S. Court of International Trade issued an opinion in a test case for more than 3,600 lawsuits challenging the United States Trade Representative’s ("USTR") decision to impose List 3 and List 4A tariffs under Section 301 of the Trade Act.
Although the court upheld the USTR’s legal authority to issue the tariffs, the court concluded that the USTR violated the Administrative Procedure Act ("APA") when it promulgated List 3 and List 4A. The APA requires agencies to respond in a reasoned manner to comments that raise significant issues in a notice-and-comment rulemaking proceeding. But the court held that the USTR largely ignored significant comments submitted during the rulemaking. The USTR’s justifications for List 3 and List 4A failed "to apprise the court how the USTR came to its decision to act and the manner in which it chose to act, taking account of the opposition and support for the increased duties and the inclusion or exclusion of particular subheadings, the concerns raised about the impact of the duties on the U.S. economy, and the potential availability of alternative courses of action."
As a remedy, the court ordered that List 3 and List 4A be remanded to the USTR for "reconsideration or further explanation regarding the USTR’s rationale for imposing the tariffs and, as necessary, the USTR’s reasons for placing products on the lists or removing products therefrom." The court set a deadline of June 30, 2022, for the USTR to complete this process, but the court declined to vacate List 3 and List 4A for now, which means that they are still in place while on remand.
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