HMTX Industries, an importer of vinyl floor tiles, has filed a lawsuit in the U.S. Court of International Trade. The lawsuit charges that the U.S. Trade Representative's (USTR) office is prosecuting “an unprecedented, unbounded and unlimited trade war impacting over $500 billion in imports from the People’s Republic of China.” Should the court rule in HMTX’s favor, the U.S. government could be required to return duties paid, plus interest.

The importer’s suit challenges the USTR’s issuing of List 3 China 301 tariffs, saying that List 3, which includes vinyl tiles, and List 4 are without statutory basis as they were prosecuted in an untimely fashion and without statutory authorization, and it cites the USTR’s procedural failings in seeking comment from the public on the lists and otherwise publicizing them. It asks the court to declare List 3 duties unlawful, refund any duties paid under List 3 and enjoin the U.S. government from imposing List 3 duties against them in the future.

The USTR’s Section 301 tariffs, under the Trade Act of 1974, were issued in 2018 and stem from an investigation of China’s intellectual property policies and practices. The USTR has said, “acts, policies, and practices of the Chinese government related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.”

In its complaint, HMTX says, “In the months that followed, defendants wildly expanded the scope of the tariffs imposed under Section 301 of the Trade Act to cover imports worth more than $500 billion—10 times the amount it had deemed ‘commensurate’ with the findings of USTR’s original investigation.” It also notes that the Trade Act does not give it authorization to “expand the imposition of tariffs to other imports from China for reasons untethered to the unfair intellectual property policies and practices it originally investigated. Yet that is exactly what defendants did here when they promulgated the List 3 duties in response to China’s retaliatory duties and other unrelated issues.”

HMTX has also published a fact sheet on its lawsuit. It can be found here.

Importers that would like to preserve their right to a refund are required to file an independent claim with the Court of International Trade. Notice was given on September 14 that the required filing must be made with the Court of International Trade by Friday, September 18.