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Chinese Product Tariff Challenge Causes Flurry of Importer Lawsuits

Client Alert

A lawsuit filed late in 2020 at the U.S. Court of International Trade (“CIT”) challenging the U.S. Trade Representative’s (USTR) implementation of Section 301 “List 3” and “List 4” duties on products from China, HMTX Industries LLC et al. v. United States (Court No. 20-00177), has resulted in the filing of thousands of additional lawsuits brought by other affected importers. There are now 3,700+ companies added to the list, including Ford, Home Depot, Target, Tesla, and Walgreens, along with many other smaller importers.

BACKGROUND

In 2017, USTR was directed by the President to initiate a targeted investigation pursuant to Section 301(b) of the Trade Act of 1974 regarding China’s laws, policies, practices, and actions related to intellectual property, innovation, and technology. Upon the release of the report, USTR imposed a 25% tariff on a list of 1,333 items with a total trade value of $50B. This was followed by subsequent lists of additional products from China with tariffs ranging from 10% to 25%.The items on List 3 have an annual trade value of $200B and those on List 4 have a trade value of $300B. Items on these lists include furniture, lighting, vehicle parts, machinery, food, clothing and many more.

EXISTING LAWSUIT

On September 10, 2020, HMTX Industries LLC and two of its subsidiaries filed a complaint at CIT alleging an unlawful escalation of the ongoing trade war with China through the imposition of a third round of tariffs on imports covered under List 3 of the Section 301 tariffs. An amended complaint was filed on September 21, 2020 to include List 4A.

Plaintiffs have generally taken the position that, while initial retaliatory tariff action reflected in the implementation of Section 301 Tariffs on products found on List 1 and List 2 may have been lawful, the USTR’s subsequent round of actions (i.e., List 3 and List 4A) failed to comply with requirements under the Administrative Procedures Act.  These lawsuits, if successful, may ultimately eliminate List 3 (and where applicable, List 4A) tariffs and result in refunds.  It remains to be seen whether refunds would be applicable to all importers, or only those who filed complaints. 

The complainants seek to set aside these alleged unlawful actions and obtain a refund of any duties paid on imports of List 3 and List 4 products from China. All complaints are asking for a refund, with interest, of duties paid, costs, and reasonable attorney fees.

JOIN THE COMPLAINT

The strategy behind this type of lawsuit is to file suit and then move to consolidate with the HMTX Industries case or stay the lawsuit pending CIT’s disposition of the HMTX case. This strategy will allow the bandwagon importers to benefit if the HMTX Industries lawsuit is successful without incurring the large expenses of fully litigating their claims.

Because USTR published List 4A in the Federal Register on August 20, 2019, the two-year statute of limitations for filing a List 4A lawsuit based on publication date does not expire until August 20, 2021. This means importers that did not import products from China under List 3 (or chose not to file a List 3 lawsuit now) have an opportunity to file a lawsuit to join this challenge on imported Chinese products subject to duties under List 4A.

HOW BMD CAN HELP

Many of our clients may be directly or indirectly affected by these tariffs. Because of existing protest limitations, joining this lawsuit might be a reasonable option to attempt to recover those costs. If any clients are aware of imported items subject to these tariffs or wish to have their import documents reviewed, please contact International Law Attorney Kevin Burwell directly at kdburwell@bmdllc.com or 330-253-3715.


Corporate Transparency Act Overhauled: U.S. Entities No Longer Required to Report

The Department of Treasury has issued an interim final rule significantly altering the Corporate Transparency Act (CTA). As of March 21, 2025, all U.S.-created entities and their beneficial owners are exempt from reporting requirements. Only non-U.S. entities registered to do business in the U.S. must still report, but they are not required to disclose U.S. citizen owners. Business owners should stay informed on these changes and consult legal counsel for compliance guidance.

ODM to Implement Medicaid Work Requirements: What Providers and Medicaid Expansion Recipients Need to Know

The Ohio Department of Medicaid (ODM) has submitted a waiver to impose work requirements for Medicaid expansion recipients. If approved, the new eligibility criteria will take effect on January 1, 2026. A federal public comment period is open until April 7, 2025.

Ohio Appellate Court Rules in Favor of Gender-Affirming Care

On March 18, 2025, the 10th District Court of Appeals in Franklin County ruled that Ohio’s House Bill (HB) 68, which restricts puberty blockers and hormone therapy for minors seeking gender-affirming care, violates the Health Care Freedom Amendment and is therefore unenforceable. The court found that the law unlawfully interferes with parental rights and medical decision-making. The case, Moe v. Yost, has been remanded, and Ohio Attorney General Dave Yost intends to appeal.

HHS Revokes Public Comment Requirement on Certain Policy Changes

The U.S. Department of Health and Human Services (HHS) has revoked the Richardson Waiver, eliminating the requirement for public notice and comment on certain policy changes. This decision allows HHS to implement new policies more quickly, potentially affecting healthcare funding rules like Medicaid work requirements. While it speeds up policymaking, it also reduces opportunities for stakeholder input, raising concerns over transparency and unintended consequences for healthcare providers, states, and patients.

Don't Get Caught Dazed and Confused: Another Florida Court Weighs in on Employer Obligations to Accommodate Medical Marijuana Use

A Florida trial court ruled in Giambrone v. Hillsborough County that employers may need to accommodate off-duty medical marijuana use under the Florida Civil Rights Act (FCRA). This contrasts with prior rulings and raises new compliance challenges for employers. With the case on appeal, now is the time to review workplace drug policies.