CIT Suspends Liquidation of Imports Subject to Section 301 Tariffs

Alerts / July 12, 2021

On July 6, a panel of three judges in the Court of International Trade (CIT) granted a motion for a preliminary injunction to suspend liquidation of unliquidated entries of imports from China subject to Section 301, Lists 3 and 4a. The ruling provides importers with an assurance that unliquidated entries subject to Lists 3 and 4a are fully protected and will remain refundable while this litigation is pending.

This unprecedented litigation involves more than 6,500 importers challenging the authority of the United States Trade Representative (USTR) to impose certain tariffs under the Trade Act of 1974 and the Administrative Procedures Act. Specifically, the lawsuit asserts that Lists 3 and 4a, which impose tariffs from 7.5 percent to 25 percent on over $300 billion in imports, exceed the USTR’s authority. In April 2021, the government announced its opinion that the CIT lacked authority to order refunds for liquidated entries of List 3 and List 4a merchandise, even if the plaintiffs prevailed on the merits in the larger litigation. The plaintiffs immediately filed a motion for a preliminary injunction to suspend liquidation and protect their ability to seek refunds of duties paid.

All three judges agreed that the plaintiffs’ claims have a fair chance of success on the merits, but they split 2-1 over whether the injunction was necessary to prevent irreparable harm to importers that have paid duties. The opinion states:

“Instead of arguing that plaintiffs’ alleged irreparable harm is reparable (because the court can order reliquidation or refund), the government asserts the opposite proposition, i.e., that the court cannot order reliquidation or refunds. Thus, the government’s position is that any duties paid are permanently unrecoverable regardless of whether they may have been collected unlawfully.”

The judges disagreed on whether, under existing case law, the CIT has clear authority to order the reliquidation and refund of liquidated entries that were subject to unlawful duty collection. Two judges found that the precedent is not conclusive as to the CIT’s authority and, should the U.S. Court of Appeals for the Federal Circuit later conclude that the CIT is without a reliquidation authority, the plaintiffs – without an injunction – may suffer irreparable harm from the liquidation of entries subject to Section 301 duties. The majority also noted that the government’s hardline refusal of refunds settled the decision in favor of the importers. The dissent found that the Federal Circuit’s position clearly indicated entries could be reliquidated and refunds could be provided regardless of suspension of liquidation and, hence, the risk of irreparable harm was low and no injunction was necessary.

The CIT injunction order gives the U.S. government a choice: It can suspend liquidation of entries as requested by the importers or it can stipulate to refund any duties found to have been illegally collected for any particular entry or entries. For importer participants to request suspension of liquidation for their unliquidated entries, certain information must be provided to U.S. Customs and Border Protection (CBP):

  1. Importer of Record number, including suffixes.
  2. Court number and filing date of the litigation to which the importer is a party.
  3. Entry number and date of entry for each entry that should be enjoined.
  4. The CBP center and team assigned to each affected entry.

Customs brokers should be able to assist in gathering this information, though they will likely be very busy with similar requests from several customers. Importers have 28 days from the order, until August 3, to submit this information to a “repository” that CBP will establish and maintain.

BakerHostetler’s Customs, Tariffs, and Import Regulations team is available to discuss the Section 301 litigation and to answer any questions related to the injunction or its impact on your business. Please contact Mike Snarr at or +1.202.861.1710, Casey Weaver at or +1.713.276.1614, Tung Nguyen at or +1.202.861.1510, or any member of our International Trade and National Security team.

Authorship Credit: Mike Snarr and Casey Weaver

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