Late last week, several companies sued the federal government over what they claim is an unfair imposition of tariffs on products imported from the People’s Republic of China like batteries, personal computers, and memory modules in Apple Inc.’s case. In particular, Apple’s complaint takes issue with a third and fourth round of tariffs, known as List 3 and List 4, that it claims exceed the Office of the United States Trade Representative’s (USTR) statutory authority under the Trade Act of 1974 and violate the Administrative Procedure Act (APA).
The filing explains that the USTR “is an executive agency of the United States charged with investigating a foreign country’s trade practices under Section 301 of the Trade Act and implementing ‘appropriate’ responses, subject to the direction of the President.” USTR purportedly conducted the Section 301 investigation at issue in the case and made decisions regarding List 3 and List 4. The complaint further explains that Apple has imported products subject to the additional ad valorem duties under Lists 3 and 4 and has paid those duties.
The dispute dates back to former President Trump’s request for an investigation into Chinese trade practices, China’s imposition of retaliatory duties, and subsequent U.S. action. According to the complaint, “Section 307 of the Trade Act does not permit USTR 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 under Section 301 of the Trade Act.”
The plaintiff contends that the USTR failed to make the requisite decision and declare that Chinese action was “unreasonable or discriminatory and burdens or restricts United States commerce.” Without such predicate, Apple avers, USTR had no authority to promulgate the List 3 and List 4 duties.
Apple argues that under the APA, the USTR failed to provide sufficient opportunity for comment on the Lists, failed to consider relevant factors when making its decision, and failed to connect the record facts to the choices it made. “Indeed, despite receiving over 6,000 comments on List 3, and almost 3,000 comments on List 4, USTR did not address how those comments shaped its final promulgation of List 3 and List 4,” the complaint said.
As such, Apple requests that the court set aside the federal defendants’ actions as ultra vires and otherwise illegal, as well as order them to refund, with interest, any duties Apple paid pursuant to List 3 and List 4. Intel Corporation’s complaint, also filed in the Court of International Trade on the same day, makes similar accusations, as does Keen Communication LLC’s suit as to a sub-part of List 4.
Apple is represented by Sidley Austin LLP.