WHY DID THE FEDERAL CIRCUIT UPHOLD THE SECTION 301 TARIFFS?
On September 25, 2025, the U.S. Court of Appeals for the Federal Circuit ruled on the validity of the Section 301 Tariffs for Lists 3 and 4A. The Court held that the Office of the U.S. Trade Representative (USTR) acted within its authority under Section 307(a)(1)(C) of the Trade Act of 1974 when it expanded tariffs in response to China’s retaliatory trade measures. The Court also determined that the tariffs were reviewed correctly under the Administrative Procedure Act (APA), finding that USTR’s responses to public comments satisfied procedural requirements under the Act.
WHAT IMPACT DOES THE COURT’S RULING HAVE ON U.S. IMPORTERS?
The ruling closes years of litigation involving more than 3,500 consolidated cases at the Court of International Trade. For importers, this outcome confirms that duties paid on Lists 3 and 4A will not be refunded. The tariffs remain in place without modification or suspension, eliminating uncertainty over potential invalidation. List 3 and List 4A cover thousands of tariff lines across sectors such as consumer electronics, furniture, apparel, footwear, automotive parts, and industrial equipment, underscoring the broad impact of this ruling on U.S. importers. Companies should continue to incorporate these costs into classification, duty planning, and long-term forecasting.
HOW DID THE COURT INTERPRET USTR’S AUTHORITY?
The Court concluded that USTR’s power to “modify” under Section 307(a)(1)(C) is not limited to small or incremental adjustments. USTR may expand or reduce tariff actions, provided they remain tied to the original Section 301 investigation and are considered appropriate to address unfair trade practices. This ruling confirms USTR’s broad discretion while also affirming the need for procedural safeguards such as public notice, comment, and reasoned responses.
As Judge Hughes wrote for the panel:
“Section 307(a)(1)(C) authorizes only those actions that would have been permissible in the first instance under Section 301(b) — specifically, those appropriate to obtain the elimination of the foreign practices found to be unfair after a full investigation.”
READ THE COURT OF APPEAL’S FULL RULING HERE: https://storage.courtlistener.com/recap/gov.uscourts.cafc.20217/gov.uscourts.cafc.20217.83.0.pdf
WHAT COMPLIANCE ACTIONS SHOULD IMPORTERS CONSIDER?
To remain compliant and to properly calculate landed costs, importers should:
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Confirm tariff liability: Products subject to Lists 3 and 4A remain covered under the established duty rates.
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Review past claims: Importers who joined the litigation or filed protective protests should adjust expectations, as refunds will not be issued.
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Strengthen duty planning: With the Federal Circuit confirming USTR’s discretion, companies should continue to incorporate Section 301 tariffs into long-term supply strategies.
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Monitor policy developments: While a petition for Supreme Court review remains possible, the immediate compliance environment is unchanged and duties on Lists 3 and 4A stand.
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