Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 1 of 21
`
`
`
`Plaintiff,
`
`v.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Court No. 20-00656
`
`UNITED STATES COURT OF INTERNATIONAL TRADE
`________________________________________________
`
`
`
`
`
`
`
`
`:
`JOHNVINCE FOODS,
`
`
`
`
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`
`
`
`
`Defendants.
` _______________________________________________ :
`
`
`
`
`
`
`
`UNITED STATES OF AMERICA;
`
`OFFICE OF THE UNITED STATES TRADE
`REPRESENTATIVE; ROBERT E. LIGHTHIZER, U.S.
`TRADE REPRESENTATIVE; U.S. CUSTOMS &
`BORDER PROTECTION; MARK A. MORGAN,
`U.S. CUSTOMS & BORDER PROTECTION ACTING
`COMMISSIONER,
`
`
`
`
`
`
`COMPLAINT
`
`Plaintiff, by and through its undersigned attorneys, alleges and states as follows:
`
`1.
`
`This action concerns Defendants’ unlawful imposition of ad valorem tariffs on
`
`goods, imported by plaintiff, from the Peoples Republic of China pursuant to Section 301 of the
`
`Trade Act of 1974 (19 U.S.C. § 2411) (“Trade Act”). The United States Trade Representative
`
`(“USTR”) conducted an investigation into China’s unfair intellectual property policies and
`
`practices pursuant to Section 301 of the Trade Act. Section 304 of the Trade Act (19 U.S.C. §
`
`2414) requires the USTR to determine what action to take, if any, within 12 months after initiation
`
`of the investigation. Within the 12 months following initiation of the investigation, the USTR
`
`determined to impose import tariffs on goods from China pursuant to Section 301(b) of the Trade
`
`Act on two groupings of tariff codes, commonly referred to as “List 1” and “List 2.” USTR
`
`subsequently implemented tariffs on additional tariff codes, known as “List 3” and “List 4A,” but
`
`failed to do so within 12months after initiation of the investigation. Section 307 of the Trade Act
`
`1
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 2 of 21
`
`
`
`(19 U.S.C. § 2417) authorizes USTR to modify a prior valid action under Section 301(b), but
`
`does not authorize USTR to impose additional tariffs not tied to the acts, policies or practices that
`
`are the subject of the investigation. USTR’s determination to implement tariffs on List 3 and List
`
`4 was not a valid modification of its initial action because it was not based on the acts, policies
`
`or practices covered by the investigation. The arbitrary manner in which Defendants implemented
`
`the List 3 and List 4 tariff actions also violates the Administrative Procedure Act (“APA”). USTR:
`
`(1) failed to provide sufficient opportunity for comment, e.g., requiring interested parties to
`
`submit affirmative and rebuttal comments on the same day; (2) failed to consider relevant factors
`
`when making its decision, e.g., undertaking no analysis of the supposed “increased burden”
`
`imposed on U.S. commerce from the unfair policies and practices that it originally investigated;
`
`and (3) failed to connect the record facts to the choices it made. Despite receiving over 6,000
`
`comments, USTR was silent as to its consideration of those comments in promulgating List 3.
`
`2.
`
`The Court should set aside Defendants’ actions as ultra vires and otherwise
`
`contrary to law, as well as order Defendants to refund any duties paid by Plaintiff pursuant to List
`
`3 and/or List 4A with interest as provided by law.
`
`
`
`JURISDICTION
`
`3.
`
`The Court possesses subject matter jurisdiction over this action pursuant to 28
`
`U.S.C. § 1581(i)(1)(B), which confers “exclusive jurisdiction” to the Court over “any civil action
`
`commenced against the United States, its agencies, or its officers, that arises out of any law of
`
`the United States providing for . . . tariffs, duties, fees, or other taxes on the importation of
`
`merchandise for reasons other than the raising of revenue.” 28 U.S.C. § 1581(i)(1)(B).
`
`PARTIES
`
`Plaintiff is an importer of various products subject to duties under List 3 or 4A.
`
`
`
`4.
`
`
`2
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 3 of 21
`
`
`
`5.
`
`Defendant United States received the disputed tariffs and is the statutory defendant
`
`under 5 U.S.C. § 702 and 28 U.S.C. § 1581(i).
`
`6.
`
`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 conducted the Section
`
`301 investigation at issue and made numerous decisions regarding List 3 and List 4.
`
`7.
`
`Ambassador Robert Lighthizer currently holds the position of USTR and serves
`
`as the director of the Office of the USTR. In these capacities, he made numerous decisions
`
`regarding List 3 and List 4.
`
`8.
`
`Defendant U.S. Customs & Border Protection (“CBP”) is the agency that collects
`
`duties on imports. CBP collected payments made by Plaintiff to account for the tariffs imposed
`
`by USTR under List 3 and List 4.
`
`9.
`
`Defendant Mark A. Morgan is the Acting Commissioner of CBP. In this capacity,
`
`he oversees CBP’s collection of duties paid by Plaintiff under List 3 and/or List 4.Plaintiff has
`
`standing to sue because it is “adversely affected or aggrieved by agency action within the meaning
`
`of the APA. 5 U.S.C. § 702; 28 U.S.C. § 2631(i). Tariffs imposed by Defendants pursuant to List
`
`3 and/or List 4A adversely affected and aggrieved Plaintiff because it was required to pay and
`
`did pay these unlawful duties.
`
`TIMELINESS OF THE ACTION
`
`10.
`
`A plaintiff must commence an action under 28 U.S.C. § 1581(i)(1)(B) “within two
`
`years after the cause of action first accrues.” 28 U.S.C. § 2636(i).
`
`11.
`
`Plaintiff contests action taken by Defendants that resulted in List 3 and List 4 and
`
`the subsequent imposition of tariffs on Plaintiff. Notice of Modification of Section 301 Action:
`
`3
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 4 of 21
`
`
`
`China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
`
`Innovation, 83 Fed. Reg. 47,974 (Sept. 21, 2018). Plaintiff’s claims accrued at the earliest on
`
`September 24, 2018, when tariffs were first levied on goods on List 3 pursuant to the USTR’s
`
`determination published in the Federal Register on September 21, 2018. Id.
`
`12.
`
`The instant action was filed within two years of the date that Plaintiff paid the List
`
`3 and List 4A duties.
`
`RELEVANT LAW
`
`13.
`
`Section 301 of the Trade Act authorizes USTR to investigate a foreign country’s
`
`trade practices. 19 U.S.C. § 2411(b). If the investigation reveals an “unreasonable or
`
`discriminatory” practice, USTR may take “appropriate” action, such as imposing tariffs on
`
`imports from the country that administered the unfair practice. Id. § 2411(b), (c)(1)(B).
`
`14.
`
`Section 304 of the Trade Act requires USTR to determine what action to take, if
`
`any, within 12 months after the initiation of the underlying investigation. Id. § 2414(a)(1)(B),
`
`(2)(B).
`
`15.
`
`Section 307 of the Trade Act (in pertinent part) allows USTR to “modify or
`
`terminate” an action taken pursuant to Section 301 of the Trade Act either when the “burden or
`
`restriction on United States commerce” imposed by the investigated foreign country’s practice
`
`has “increased or decreased” or when the action “is no longer appropriate.” Id. § 2417(a)(1)(B),
`
`(C).
`
`I.
`
`USTR’s Investigation
`
`PROCEDURAL HISTORY
`
`16.
`
`On August 14, 2017, President Trump directed Ambassador Lighthizer to consider
`
`initiating a targeted investigation pursuant to Section 301(b) of the Trade Act concerning China’s
`
`4
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 5 of 21
`
`
`
`laws, policies, practices, and actions related to intellectual property, innovation, and technology.
`
`Addressing China’s Laws, Policies, Practices, and Actions Related to Intellectual Property,
`
`Innovation, and Technology, 82 Fed. Reg. 39,007 (Aug. 17, 2017). According to the President,
`
`certain Chinese “laws, policies, practices, and actions” on intellectual property, innovation, and
`
`technology “may inhibit United States exports, deprive United States citizens of fair remuneration
`
`for their innovations, divert American jobs to workers in China, contribute to our trade deficit
`
`with China, and otherwise undermine American manufacturing, services, and innovation.” Id.
`
`17.
`
`On August 18, 2017, USTR formally initiated an investigation into “whether acts,
`
`policies, and practices of the Government of China related to technology transfer, intellectual
`
`property, and innovation are actionable under [Section 301(b) of] the Trade Act.” Initiation of
`
`Section 301 Investigation; Hearing; and Request for Public Comments: China’s Acts, Policies,
`
`and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 82 Fed.
`
`Reg. 40,213 (Aug. 24, 2017).
`
`18.
`
`On March 22, 2018, USTR released a report announcing the results of its
`
`investigation. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE , Findings of
`
`the Investigation Into China’s Acts, Policies, And Practices Related to Technology Transfer,
`
`Intellectual Property, and Innovation Under Section 301 of The Trade Act of 1974 (Mar. 22, 2018),
`
`available at https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF. USTR found that
`
`certain “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.” Id. at 17.
`
`19.
`
`On March 22, 2018, USTR published a “Fact Sheet” stating that “[a]n interagency
`
`team of subject matter experts and economists estimate that China’s policies result in harm to the
`
`5
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 6 of 21
`
`
`
`U.S. economy of at least $50 billion per year.” OFFICE OF THE UNITED STATES TRADE
`
`REPRESENTATIVE, Section 301 Fact Sheet
`
`(Mar. 22, 2018), available at
`
`https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/march/Section-301-
`
`fact-
`
`sheet. USTR also indicated that, consistent with a directive from President Trump, it would
`
`“propose additional tariffs” of 25% ad valorem “on certain products of China, with an annual
`
`trade value commensurate with the harm caused to the U.S. economy resulting from China’s
`
`unfair policies.” Id.; see Actions by the United States Related to the Section 301 Investigation of
`
`China’s Laws, Policies, Practices, or Actions Related to Technology Transfer, Intellectual
`
`Property, and Innovation, 83 Fed. Reg. 13,099 (Mar. 27, 2018) (President Trump’s directive).
`
`Lists 1 & 2
`
`II.
`
`
`20.
`
`Between April and August 2018 (i.e., within the 12-month statutory deadline from
`
`the initiation of the investigation in August 2017, see 19 U.S.C. § 2414(a)(2)(B)), Defendants
`
`undertook a series of actions to remedy the estimated harm to the U.S. economy caused by the
`
`investigated unfair practices, ultimately imposing duties on imports from China covered by the
`
`so-called Lists 1 and 2.
`
`21.
`
`On April 6, 2018, USTR published notice of its intent to impose “an additional
`
`duty of 25 percent on a list of products of Chinese origin.” Notice of Determination and Request
`
`for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301:
`
`China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
`
`Innovation, 83 Fed. Reg. 14,906, 14,907 (Apr. 6, 2018). The products on the proposed list
`
`covered 1,333 tariff subheadings with a total value of “approximately $50 billion in terms of
`
`estimated annual trade value for calendar year 2018.” Id. at 14,907.USTR explained that it chose
`
`$50 billion because that amount was “commensurate with an economic analysis of the harm
`
`6
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 7 of 21
`
`
`
`caused by China’s unreasonable technology transfer policies to the U.S. economy, as covered by
`
`USTR’s Section 301
`
`investigation.” OFFICE OF THE UNITED STATES TRADE
`
`REPRESENTATIVE, Under Section 301 Action, USTR Releases Proposed Tariff List on
`
`Chinese Products (Apr. 3, 2018), available at https://ustr.gov/about-us/policy-offices/press-
`
`office/press-releases/2018/april/under- section-301-action-ustr.
`
`22.
`
`On June 20, 2018, USTR published notice of its final list of products subject to an
`
`additional duty of 25% ad valorem, a list commonly known as “List 1.” Notice of Action and
`
`Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section
`
`301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property,
`
`and Innovation, 83 Fed. Reg. 28,710 (June 20, 2018). USTR explained that it had “narrow[ed]
`
`the proposed list in the April 6, 2018 notice to 818 tariff subheadings, with an approximate annual
`
`trade value of $34 billion.” Id. at 28,711.
`
`23.
`
`At the same time that it finalized List 1, USTR announced that it intended to
`
`impose a 25% ad valorem duty on a second proposed list of Chinese products in order to
`
`“maintain the effectiveness of [the] $50 billion trade action” grounded in its Section 301
`
`investigation. Id. at 28,712. USTR announced a proposed “List 2” covering 284 tariff
`
`subheadings with “an approximate annual trade value of $16 billion.” Id. at 28,711-12.
`
`24.
`
`On August 16, 2018, USTR published notice of the final list of products subject
`
`to an additional duty of 25% ad valorem in List 2, comprising “279 tariff subheadings” whose
`
`“annual trade value . . . remains approximately $16 billion.” Notice of Action Pursuant to Section
`
`301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property,
`
`and Innovation, 83 Fed. Reg. 40,823, 40,823-24 (Aug. 16, 2018).
`
`
`
`7
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 8 of 21
`
`
`
`III. List 3 and 4
`
`25.
`
`Following USTR’s issuance of the results of its investigation in March 2018,
`
`Defendants broadly expanded the scope of the tariffs imposed under Section 301 of the Trade
`
`Act to cover imports worth more than $500 billion—ten times the amount it had deemed
`
`“commensurate” with the findings of USTR’s original investigation. Shortly after President
`
`Trump directed USTR in April 2018 to consider imposing duties on $50 billion in Chinese
`
`products, China promptly threatened to impose retaliatory duties on the same value of imports
`
`from the United States. In response, President Trump “instructed the USTR to consider whether
`
`$100 billion of additional tariffs would be appropriate under Section 301” due to “China’s unfair
`
`retaliation.” THE WHITE HOUSE, Statement from Donald J. Trump on Additional Proposed
`
`Section 301 Remedies (Apr. 5, 2018), available at https://www.whitehouse.gov/briefings-
`
`statements/statement-president-donald-j-trump- additional-proposed-section-301-remedies/.
`
`26. When USTR finalized List 1 in mid-June 2018, President Trump warned China
`
`that he would consider imposing additional tariffs on Chinese goods if China retaliated against
`
`the United States. E.g., Vicki Needham & Max Greenwood, Trump Announces Tariffs on $50
`
`Billion
`
`in Chinese Goods, THE HILL
`
`(June
`
`15,
`
`2018),
`
`available
`
`at
`
`http://thehill.com/homenews/administration/392421-trump-announces-tariffs-on-50-billion-in-
`
`chinese-goods (“The president said the United States will pursue additional tariffs if China
`
`retaliates ‘such as imposing new tariffs on United States goods, services or agricultural products;
`
`raising non-tariff barriers; or taking punitive actions against American exporters or American
`
`companies operating in China.’”).
`
`27.
`
`On June 18, 2018, President Trump formally directed USTR to consider whether
`
`the United States should impose additional duties on products from China with an estimated trade
`
`8
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 9 of 21
`
`
`
`value of $200 billion—despite USTR having not yet implemented List 1 and List 2. President
`
`Trump acknowledged that China’s threatened retaliatory “tariffs on $50 billion worth of United
`
`States exports” motivated his decision. THE WHITE HOUSE, Statement from the President
`
`Regarding
`
`Trade
`
`with
`
`China
`
`(June
`
`18,
`
`2018),
`
`available
`
`at
`
`https://www.whitehouse.gov/briefings-statements/statement-president-regarding-trade- china-2/
`
`(“This latest action by China clearly indicates its determination to keep the United States at a
`
`permanent and unfair disadvantage, which is reflected in our massive $376 billion trade
`
`imbalance in goods. This is unacceptable.”).
`
`28.
`
`Acknowledging the purpose of the President’s directive, USTR stated that it
`
`would design the newly proposed duties to address China’s threatened retaliatory measures,
`
`rather than any of the harms identified in its Section 301 investigation. OFFICE OF THE
`
`UNITED STATES TRADE REPRESENTATIVE, USTR Robert Lighthizer Statement on the
`
`President’s Additional China Trade Action (June 18, 2018), available at https://ustr.gov/about-
`
`us/policy-offices/press-office/press-releases/2018/june/ustr-robert-lighthizer-statement-0
`
`(explaining that, although Lists 1 and 2 “were proportionate and responsive to forced technology
`
`transfer and intellectual property theft by the Chinese” identified in the Section 301 investigation,
`
`the proposed duties for a third list of products were necessary to respond to the retaliatory and
`
`“unjustified tariffs” that China may impose to target “U.S. workers, farmers, ranchers, and
`
`businesses”).
`
`29.
`
`China retaliated by imposing 25% ad valorem tariffs on $50 billion in U.S. goods
`
`implemented in two stages of $34 billion and $16 billion on the same dates the United States
`
`began collecting its own 25% tariffs under List 1 (July 6, 2018) and List 2 (August 23, 2018).
`
`30.
`
`About one week later, USTR published notice of its proposal to “modify the action
`
`9
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 10 of 21
`
`
`
`in this investigation by maintaining the original $34 billion action and the proposed $16 billion
`
`action, and by taking a further, supplemental action” in the form of “an additional 10 percent ad
`
`valorem duty on [a list of] products [from] China with an annual trade value of approximately
`
`$200 billion.” Request for Comments Concerning Proposed Modification of Action Pursuant to
`
`Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual
`
`Property, and Innovation, 83 Fed. Reg. 33,608, 33,608 (July 17, 2018). USTR initially set a
`
`deadline of August 17, 2018 for initial comments; August 20-23, 2018 for a public hearing; and
`
`August 30, 2018 for rebuttal comments. Id. at 33,608.
`
`31.
`
`In its notice, USTR confirmed that it had relied on China’s decision to impose
`
`“retaliatory duties” as the primary basis for its proposed action. Id. at 33,609 (asserting as
`
`justification “China’s response to the $50 billion action announced in the investigation and its
`
`refusal to change its acts, policies, and practices”). USTR explicitly tied the $200 billion in its
`
`proposed action to the level of retaliatory duties imposed by China on U.S. imports, noting that
`
`“action at this level is appropriate in light of the level of China’s announced retaliatory action
`
`($50 billion) and the level of Chinese goods imported into the United States ($505 billion in
`
`2017).” Id.; see also id. (Because “China’s retaliatory action covers a substantial percentage of
`
`U.S. goods exported to China ($130 billion in 2017),” “the level of the U.S. supplemental action
`
`must cover a substantial percentage of Chinese imports.”). Although it pointed to China’s
`
`retaliatory measures, USTR did not identify any increased burdens or restrictions on U.S.
`
`commerce resulting from the unfair practices that USTR had investigated. See id.
`
`32.
`
`USTR’s contemporaneous press statements corroborated the contents of its notice:
`
`China’s retaliatory duties motivated its proposed action. Ambassador Lighthizer stated that the
`
`proposed action came “[a]s a result of China’s retaliation and failure to change its practice.”
`
`10
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 11 of 21
`
`
`
`OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE, Statement by U.S. Trade
`
`Representative Robert Lighthizer on Section 301 Action (July 10, 2018), available at
`
`https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/july/statement-us-
`
`trade-representative.
`
`33.
`
`On July 10, 2018, President Trump suggested that the United States’ trade
`
`imbalance with China supported the decision. @realDonaldTrump, TWITTER (July 10, 2018,
`
`9:17 PM EDT), https://twitter.com/realDonaldTrump/status/1005982266496094209. President
`
`Trump also expressed his frustration over China’s purported manipulation of its currency and
`
`national monetary policy, as well as his continued displeasure over China’s retaliatory tariffs and
`
`the trade imbalance between the two nations. See, e.g., @realDonaldTrump, TWITTER
`
`(July
`
`20, 2018, 8:43 AM EDT), https://twitter.com/realDonaldTrump/status/1020287981020729344;
`
`@realDonaldTrump, TWITTER
`
`(July 20,
`
`2018, 8:51 AM EDT),
`
`https://twitter.com/realDonaldTrump/status/1020290163933630464;
`
`@realDonaldTrump,
`
`TWITTER
`
`(July
`
`25,
`
`2018,
`
`7:20
`
`AM
`
`EDT),
`
`https://twitter.com/realDonaldTrump/status/1022079127799701504;
`
`@realDonaldTrump,
`
`TWITTER
`
`(July 25, 2018, 7:01 AM EDT), https://twitter.com/realDonaldTrump/
`
`status/1022074252999225344.
`
`34.
`
`On August 1, 2018, Ambassador Lighthizer announced that, in light of China’s
`
`retaliatory duties, USTR would propose to increase the additional duty from 10% to 25% ad
`
`valorem. Rather than addressing the practices that USTR investigated pursuant to Section 301 of
`
`the Trade Act, he stated that China “[r]egrettably . . . has illegally retaliated against U.S. workers,
`
`farmers, ranchers and businesses.” OFFICE OF THE UNITED STATES TRADE
`
`REPRESENTATIVE, Statement by U.S. Trade Representative Robert Lighthizer on Section 301
`
`11
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 12 of 21
`
`
`
`Action (Aug. 1, 2018), available at https://ustr.gov/about-us/policy-offices/press- office/press-
`
`releases/2018/august/statement-us-trade-representative.
`
`35.
`
`On August 7, 2018, USTR formally proposed “raising the level of the
`
`additional duty in the proposed supplemental action from 10 percent to 25 percent.” Extension
`
`of Public Comment Period Concerning Proposed Modification of Action Pursuant to Section
`
`301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual
`
`Property, and Innovation, 83 Fed. Reg. 38,760, 38,760 (Aug. 7, 2018). USTR also set new
`
`dates for a public hearing over six days ending on August 27, 2018. See id.; see also OFFICE
`
`OF THE UNITED STATES TRADE REPRESENTATIVE, Public Hearings on Proposed
`
`Section 301 Tariff List (Aug. 17, 2018) (modifying hearing schedule), available at
`
`https://ustr.gov/about-us/policyoffices/press-office/press-releases/2018/august/public-
`
`hearings-proposed-section-301.
`
`36.
`
`At the same time, USTR adjusted the deadlines for the submission of written
`
`comments, setting September 6, 2018—less than a month later—as the new deadline for both
`
`initial and rebuttal comments from the public. 83 Fed. Reg. at 38,761. That adjustment, deviating
`
`from its past practices, prevented both USTR and the public from considering initial comments
`
`at the hearing, and left insufficient time for interested parties to review and respond to the initial
`
`comments filed by other parties. USTR also limited each hearing participant to five minutes.
`
`Docket No. USTR-2018-0026, https://beta.regulations.gov/document/USTR-2018-0026-0001.
`
`Approximately 350 witnesses appeared at the six-day hearing, and the public submitted over
`
`6,000 comments. Id.
`
`37.
`
`Just eleven days after receiving final comments from the public, President Trump
`
`announced that he had directed USTR “to proceed with placing additional tariffs on roughly $200
`
`12
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 13 of 21
`
`
`
`billion of imports from China.” THE WHITE HOUSE, Statement from the President (Sep. 17,
`
`2018) https://www.whitehouse.gov/briefings-statements/statement- from-the-president-4/. Once
`
`again, the President made clear that China’s response to the $50 billion tariff action (i.e., List 1
`
`and List 2 duties) motived his decision, and he immediately promised to proceed with “phase
`
`three” of the plan—an additional $267 billion tariff action—“if China takes retaliatory action
`
`against our farmers or other industries.” Id.
`
`38.
`
`Following the President’s announcement, USTR published notice of the final list
`
`of products subject to an additional duty, a list commonly known as “List 3.” 83 Fed. Reg. at
`
`47,974. USTR imposed a 10% ad valorem tariff that was set to rise automatically to 25% on
`
`January 1, 2019. Id. USTR determined that the List 3 duties would apply to all listed products
`
`that enter the United States from China on or after September 24, 2018. Id. USTR did not respond
`
`to any of the over 6,000 comments that it received or any of the testimony provided by roughly
`
`350 witnesses. Id.
`
`39.
`
`As legal support for its action, USTR for the first time cited Section 307(a)(1)(B)
`
`of the Trade Act.
`
`40.
`
`In the months that followed, China and the United States attempted to resolve their
`
`differences through trade negotiations. Based on the progress made with China in those
`
`negotiations, the Trump Administration announced in December 2018, and again in February
`
`2019, that it would delay the scheduled increase in the List 3 duty rate from 10 to 25%. Notice of
`
`Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology
`
`Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 65,198 (Dec. 19, 2018); Notice of
`
`Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology
`
`Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 7,966 (Mar. 5, 2019).
`
`13
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 14 of 21
`
`
`
`41.
`
`In May 2019, when the trade negotiations ultimately fell apart, USTR announced
`
`its intent to raise the tariff rate on List 3 goods to 25%, effective either May 10, 2019 or June 1,
`
`2019, depending on the day of export. See Notice of Modification of Section 301 Action: China's
`
`Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
`
`Innovation, 84 Fed. Reg. 20,459 (May 9, 2019) (“List 3 Rate Increase Notice”); see also
`
`Implementing Modification to Section 301 Action: China’s Acts, Policies, and Practices Related
`
`to Technology Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 21,892 (May 15,
`
`2019). The notice cited China’s decision to “retreat from specific commitments agreed to in
`
`earlier rounds” of negotiations as the basis for the increase in the duty rate. List 3 Rate Increase
`
`Notice, 84 Fed. Reg. at 20,459. Unlike with past imposition of new tariffs, USTR did not seek
`
`public comment but rather simply announced that the increase would occur. Id.
`
`42.
`
`The duties imposed on products covered by List 3 remain in effect as of the date
`
`of this Complaint, with the exception of a limited number of products for which USTR granted
`
`exclusions from the duties. See, e.g., Notice of Product Exclusion Extensions: China’s Acts,
`
`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,
`
`85 Fed. Reg. 48,600 (Aug. 11, 2020).
`
`43.
`
`On May 17, 2019, USTR announced its intent to proceed with List 4 covering
`
`even more products subject to additional duties. Under USTR’s proposal, List 4 would impose
`
`an additional duty of 25% ad valorem on products worth $300 billion. Request for Comments
`
`Concerning Proposed Modification of Action Pursuant to Section 301: China's Acts, Policies,
`
`and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84 Fed.
`
`Reg. 22,564, 22,564 (May 17, 2019). USTR explained that its decision was motivated by China’s
`
`“retreat[] from specific commitments made
`
`in previous [negotiating] rounds [and]
`
`14
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 15 of 21
`
`
`
`announce[ment of] further retaliatory action against U.S. commerce.” Id.
`
`44.
`
`USTR invited the public to comment on proposed List 4 and participate in a
`
`hearing. Id. The public submitted nearly 3,000 comments. Docket No. USTR-2019-0004,
`
`https://beta.regulations.gov/document/USTR-2019-0004-0001. The timeline for participation in
`
`the hearing left little room for meaningful input as USTR required witnesses to submit drafts of
`
`their testimony by June 10, 2019, some seven days before the deadline for fully developed written
`
`comments, and then it again limited witnesses to five minutes of testimony at the hearing. Id.
`
`45.
`
`On August 1, 2019, citing China’s failure to follow through on agricultural
`
`purchases and to reduce exports of fentanyl flowing into the United States, President Trump
`
`announced that the List 4 tariffs would become effective September 1, 2019 at a rate of 10% ad
`
`valorem. @realDonaldTrump, TWITTER
`
`(Aug.
`
`1,
`
`2019,
`
`1:26
`
`PM EDT),
`
`https://twitter.com/realDonaldTrump/status/1156979446877962243 (noting a “small additional
`
`Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China
`
`into our Country”).
`
`46.
`
`On August 20, 2019, USTR issued a final notice adopting List 4 in two tranches.
`
`Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to
`
`Technology Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 43,304 (Aug. 20,
`
`2019). List 4A would impose a 10% ad valorem duty on goods worth roughly $120 billion,
`
`effective September 1, 2019. Id. at 43,304. List 4b would impose a 10% ad valorem duty on the
`
`remaining goods (with limited exclusions “based on health, safety, national security, and other
`
`factors”), effective December 15, 2019. Id. at 43,305. Once again, USTR did not address any of
`
`the nearly 3,000 comments submitted or any of the testimony provided by witnesses, other than
`
`to claim that its determination “takes account of the public comments and the testimony.” Id.
`
`15
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 16 of 21
`
`
`
`47.
`
`As legal support for its action, USTR again cited Section 307(a)(1)(B) and (C) of
`
`the Trade Act and pointed to “China’s subsequent defensive actions taken to maintain those unfair
`
`acts, policies, and practices as determined in that investigation,” including retaliatory tariffs on
`
`U.S. imports, retreating from commitments during negotiations, and devaluing its currency as a
`
`basis for this decision. Id.
`
`48.
`
`On August 30, 2019, USTR published notice of its decision to increase the tariff
`
`rate applicable to goods covered by List 4A and List 4B from 10% to 15%. Notice of Modification
`
`of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer,
`
`Intellectual Property, and Innovation, 84 Fed. Reg. 45,821 (Aug. 30, 2019). USTR explained that
`
`it increased the tariff rate because, shortly after it finalized List 4A and List 4B, “China responded
`
`by announcing further tariffs on U.S. goods.” Id. at 45,822. USTR once again cited to China’s
`
`retreat from its negotiation commitments and devaluation of its currency as grounds for its action.
`
`Id.
`
`49.
`
`On December 18, 2019, as a result of successfully negotiating a limited trade deal
`
`with China, USTR published notice that it would “suspend indefinitely the imposition of
`
`additional duties of 15 percent on products of China covered by” List 4B. Notice of Modification
`
`of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer,
`
`Intellectual Property, and Innovation, 84 Fed. Reg. 69,447, 69,447 (Dec. 18, 2019). USTR also
`
`stated its intent to reduce the tariff rate applicable to products covered by List 4A, id., an action
`
`that ultimately became effective on February 14, 2020, when USTR halved the applicable duty
`
`rate, Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related
`
`to Technology Transfer, Intellectual Property, and Innovation, 85 Fed. Reg. 3,741 (Jan. 22,
`
`2020).
`
`16
`
`

`

`Case 1:20-cv-00656-N/A Document 2 Filed 09/18/20 Page 17 of 21
`
`
`
`50.
`
`In the months that followed, the United States and China implem