Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 1 of 25
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`APPLE INC.
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`Plaintiff,
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`v.
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`Court No. 21-00490
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`UNITED STATES COURT OF INTERNATIONAL TRADE
`________________________________________________
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`UNITED STATES OF AMERICA;
`OFFICE OF THE UNITED STATES TRADE
`
`REPRESENTATIVE; KATHERINE C. TAI, U.S.
`TRADE REPRESENTATIVE; U.S. CUSTOMS &
`BORDER PROTECTION; TROY MILLER, ACTING
`COMMISSIONER FOR U.S. CUSTOMS AND
`BORDER PROTECTION,
`
`
`Defendants.
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`COMPLAINT
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`Plaintiff Apple Inc. (“Apple”), by and through its attorneys, alleges and states as follows:
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`1.
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`This action concerns Defendants’ imposition of a third and fourth round of tariffs
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`on products imported from the People’s Republic of China and covered by so-called “List 3” and
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`“List 4.” Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices
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`Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 47,974 (Sept.
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`21, 2018); Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices
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`Related to Technology Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 43,304 (Aug.
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`20, 2019). It presents the same cause of action for the Plaintiff as was filed in HMTX Industries
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 2 of 25
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`LLC, et al. v. United States, Court No. 20-00177 (Complaint filed September 10, 2020; Amended
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`Complaint filed September 21, 2020) and In Re Section 301 Cases, Court No. 21-cv- 00052-3JP1.1
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`2.
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`The Office of the United States Trade Representative (“USTR”) conducted an
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`investigation into China’s unfair intellectual property policies and practices pursuant to Section
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`301 of the Trade Act of 1974 (“Trade Act”) (19 U.S.C. § 2411). Section 304 of the Trade Act (19
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`U.S.C. § 2414) required USTR to determine what action to take, if any, within 12 months after
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`initiation of that investigation. USTR failed to issue List 3 or List 4 within that window.
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`3.
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`USTR may not fall back on its “modification” authority under Section 307 of the
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`Trade Act (19 U.S.C. § 2417) to salvage List 3 and List 4. Section 307 of the Trade Act does not
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`permit USTR to expand the imposition of tariffs to other imports from China for reasons untethered
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`to the unfair intellectual property policies and practices it originally investigated under Section
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`301 of the Trade Act. Yet that is exactly what Defendants did here when they promulgated the
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`List 3 and List 4 duties in response to China’s retaliatory duties and other unrelated issues. And
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`even if USTR deems the existing tariffs “no longer appropriate,” as it also did here, the Trade Act
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`permits USTR only to delay, taper, or terminate—not ratchet up—the actions it has already taken.
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`4.
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`The arbitrary manner in which Defendants implemented the List 3 and List 4 tariff
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`actions also violates the Administrative Procedure Act (“APA”). USTR (1) failed to provide
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`sufficient opportunity for comment, e.g., requiring interested parties to submit affirmative and
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`rebuttal comments on the same day; (2) failed to consider relevant factors when making its
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`decision, e.g., undertaking no analysis of the supposed “increased burden” imposed on U.S.
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`commerce from the unfair policies and practices that it originally investigated; and (3) failed to
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`1 Standard Procedure Order No. 21-01 in In Re Section 301 Cases contemplates that “similar actions may
`subsequently be filed in this court.” Pursuant to that Order, Plaintiff requests that the current case be added to the
`Schedule of Cases covered by In Re Section 301 Cases.
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 3 of 25
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`connect the record facts to the choices it made. Indeed, despite receiving over 6,000 comments on
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`List 3, and almost 3,000 comments on List 4, USTR did not address how those comments shaped
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`its final promulgation of List 3 and List 4. USTR’s decision-making bears no resemblance to the
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`standards that the APA demands.
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`5.
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`The Court should set aside Defendants’ actions as ultra vires and otherwise
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`contrary to law, as well as order Defendants to refund (with interest) any duties paid by Plaintiff
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`pursuant to List 3 and List 4.
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`JURISDICTION
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`6.
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`The Court possesses subject matter jurisdiction over this action pursuant to 28
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`U.S.C. § 1581(i)(1)(B), which confers “exclusive jurisdiction” to the Court over “any civil action
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`commenced against the United States, its agencies, or its officers, that arises out of any law of the
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`United States providing for … tariffs, duties, fees, or other taxes on the importation of merchandise
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`for reasons other than the raising of revenue.” 28 U.S.C. § 1581(i)(1)(B).
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`PARTIES
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`7.
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`Plaintiff Apple is a publicly-held company headquartered in Cupertino, California.
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`Apple designs and markets consumer electronics and accessories. Apple has made numerous
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`entries of articles, including batteries, personal computers, smartphone parts, smartwatches,
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`memory modules, and accessories, classified under HTSUS subheadings that are subject to the
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`additional ad valorem duties under List 3 (e.g., 4202.91.9090, 8473.30.1140, etc.) and List 4A
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`(e.g., 8471.49.0000, 8517.62.0090, etc.).
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`8.
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`Defendant United States of America received the disputed tariffs and is the
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`statutory defendant under 5 U.S.C. § 702 and 28 U.S.C. § 1581(i)(1)(B).
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`9.
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`USTR is an executive agency of the United States charged with investigating a
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`foreign country’s trade practices under Section 301 of the Trade Act and implementing
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`“appropriate” responses, subject to the direction of the President. USTR conducted the Section
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`301 investigation at issue and made numerous decisions regarding List 3 and List 4.
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`10.
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`Ambassador Robert Lighthizer formally held the position of U.S. Trade
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`Representative and served as the director of the USTR. In these capacities, he made numerous
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`decisions regarding List 3 and List 4. Defendant Ambassador Katherine C. Tai currently serves
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`as USTR.
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`11.
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`Defendant U.S. Customs & Border Protection (“CBP”) is the agency that collects
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`duties on imports. CBP collected payments made by Plaintiff to account for the tariffs imposed
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`by USTR under List 3 and List 4.
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`12.
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`Defendant Troy Miller is the Acting Commissioner for CBP. In this capacity, he
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`oversees CBP’s collection of duties paid by Plaintiff under List 3 and List 4. Prior to his role,
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`Mark A. Morgan was the Acting Commissioner of CBP while List 3 and List 4 tariffs were being
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`assessed against Plaintiff’s imports.
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`STANDING
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`13.
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`Plaintiff has standing to sue because it is “adversely affected or aggrieved by
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`agency action within the meaning of” the APA. 5 U.S.C. § 702; see 28 U.S.C. § 2631(i) (“Any
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`civil action of which the Court of International Trade has jurisdiction … may be commenced in
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`the court by any person adversely affected or aggrieved by agency action within the meaning of
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`Section 702 of title 5.”). Tariffs imposed by Defendants pursuant to List 3 and List 4 adversely
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`affected and aggrieved Plaintiff because it was required to pay these unlawful duties.
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`TIMELINESS OF THE ACTION
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`14.
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`A plaintiff must commence an action under 28 U.S.C. § 1581(i)(1)(B) “within two
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`years after the cause of action first accrues.” 28 U.S.C. § 2636(i).
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`15.
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`The instant action contests action taken by Defendants that resulted in List 3 and
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`List 4 and Plaintiff’s obligation to pay tariffs upon importing List 3 and List 4 items. Notice of
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`Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 47,974 (Sept. 21, 2018); Notice of
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`Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 43,304 (Aug. 20, 2019). Plaintiff’s
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`claims accrued upon liquidation of its entries subject to List 3 and List 4 tariffs, at which time CBP
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`determined those duties to be final, and thus Plaintiff has timely filed this action with respect to
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`all such entries that were not already liquidated as of the date two years prior to this action being
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`filed. Alternatively, Plaintiff’s claims accrued upon its deposit of List 3 and List 4 tariffs at the
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`time of entry, and thus Plaintiff has timely filed this action with respect to all such entries filed
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`within the previous two years of this action. Alternatively, Plaintiff’s claims accrued when USTR
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`published its List 3 and List 4 notices in the Federal Register, and thus Plaintiff has timely filed
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`this action with respect to all imports subject to List 4 tariffs for which USTR published its notice
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`on August 20, 2019, within two years of this action being filed.
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`RELEVANT LAW
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`16.
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`Section 301 of the Trade Act authorizes USTR to investigate a foreign country’s
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`trade practices. 19 U.S.C. § 2411(b). If the investigation reveals an “unreasonable or
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 6 of 25
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`discriminatory” practice, USTR may take “appropriate” action, such as imposing tariffs on imports
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`from the country that administered the unfair practice. Id. § 2411(b), (c)(1)(B).
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`17.
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`Section 304 of the Trade Act requires USTR to determine what action to take, if
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`any, within 12 months after the initiation of the underlying investigation. Id. § 2414(a)(1)(B),
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`(2)(B).
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`18.
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`Section 307 of the Trade Act (in pertinent part) allows USTR to “modify or
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`terminate” an action taken pursuant to Section 301 of the Trade Act either when the “burden or
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`restriction on United States commerce” imposed by the investigated foreign country’s practice has
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`“increased or decreased” or when the action “is no longer appropriate.” Id. § 2417(a)(1)(B), (C).
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`I.
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`USTR’s Investigation
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`PROCEDURAL HISTORY
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`19.
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`On August 14, 2017, former President Trump directed Ambassador Lighthizer to
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`consider initiating a targeted investigation pursuant to Section 301(b) of the Trade Act concerning
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`China’s laws, policies, practices, and actions related to intellectual property, innovation, and
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`technology. Addressing China’s Laws, Policies, Practices, and Actions Related to Intellectual
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`Property, Innovation, and Technology, 82 Fed. Reg. 39,007 (Aug. 17, 2017). According to the
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`former President, certain Chinese “laws, policies, practices, and actions” on intellectual property,
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`innovation, and technology “may inhibit United States exports, deprive United States citizens of
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`fair remuneration for their innovations, divert American jobs to workers in China, contribute to
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`our trade deficit with China, and otherwise undermine American manufacturing, services, and
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`innovation.” Id.
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`20.
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`Four days later, on August 18, 2017, USTR formally initiated an investigation into
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`“whether acts, policies, and practices of the Government of China related to technology transfer,
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 7 of 25
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`intellectual property, and innovation are actionable under [Section 301(b) of] the Trade Act.”
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`Initiation of Section 301 Investigation; Hearing; and Request for Public Comments: China’s Acts,
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`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 82
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`Fed. Reg. 40,213 (Aug. 24, 2017).
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`21.
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`Seven months later, on March 22, 2018, USTR released a report announcing the
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`results of its investigation. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE, Findings of
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`the Investigation Into China’s Acts, Policies, And Practices Related to Technology Transfer,
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`Intellectual Property, and Innovation Under Section 301 of The Trade Act of 1974 (Mar. 22, 2018),
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`available at https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF. USTR found that
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`certain “acts, policies, and practices of the Chinese government related to technology transfer,
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`intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S.
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`commerce.” Id. at 17. USTR based its findings on (1) China’s use of foreign ownership
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`restrictions, foreign investment restrictions, and administrative licensing and approval processes
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`to pressure technology transfers from U.S. to Chinese companies, id. at 45; (2) China’s use of
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`licensing processes to transfer technologies from U.S. to Chinese companies on terms that favor
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`Chinese recipients, id. at 48; (3) China’s facilitation of systematic investment in, and acquisition
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`of, U.S. companies and assets by Chinese entities to obtain technologies and intellectual property
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`for purposes of large-scale technology transfer, id. at 147; and (4) China’s cyber intrusions into
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`U.S. computer networks to gain access to valuable business information, id. at 171. In its report,
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`USTR did not quantify the burden or restriction imposed on U.S. commerce by the investigated
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`practices.
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`22.
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`The same date, USTR published a “Fact Sheet” stating that “[a]n interagency team
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`of subject matter experts and economists estimates that China’s policies result in harm to the U.S.
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 8 of 25
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`economy of at least $50 billion per year.” OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE,
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`Section 301 Fact Sheet (Mar. 22, 2018), available at https://ustr.gov/aboutus/policy-offices/press-
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`office/fact-sheets/2018/march/Section-301-fact-sheet. USTR also indicated that, consistent with
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`a directive from the former President, it would “propose additional tariffs” of 25% ad valorem “on
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`certain products of China, with an annual trade value commensurate with the harm caused to the
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`U.S. economy resulting from China’s unfair policies.” Id.; see Actions by the United States Related
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`to the Section 301 Investigation of China’s Laws, Policies, Practices, or Actions Related to
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`Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 13,099 (Mar. 27, 2018).
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`II.
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`Lists 1 & 2
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`23.
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`Between April and August 2018 (i.e., within the 12-month statutory deadline from
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`the initiation of the investigation in August 2017, see 19 U.S.C. § 2414(a)(2)(B)), Defendants
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`undertook a series of actions to remedy the estimated harm to the U.S. economy caused by the
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`investigated unfair practices, ultimately imposing duties on imports from China covered by the so-
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`called Lists 1 and 2.
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`24.
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`On April 6, 2018, USTR published notice of its intent to impose “an additional duty
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`of 25 percent on a list of products of Chinese origin.” Notice of Determination and Request for
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`Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s
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`Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
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`Innovation, 83 Fed. Reg. 14,906, 14,907 (Apr. 6, 2018). The products on the proposed list covered
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`1,333 tariff subheadings with a total value of “approximately $50 billion in terms of estimated
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`annual trade value for calendar year 2018.” Id. at 14,907. USTR explained that it chose $50
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`billion because that amount was “commensurate with an economic analysis of the harm caused by
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`China’s unreasonable technology transfer policies to the U.S. economy, as covered by USTR’s
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 9 of 25
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`Section 301 investigation.” OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE, Under
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`Section 301 Action, USTR Releases Proposed Tariff List on Chinese Products (Apr. 3, 2018),
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`available at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/under-
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`section-301action-ustr.
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`25.
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`On June 20, 2018, USTR published notice of its final list of products subject to an
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`additional duty of 25% ad valorem, a list commonly known as “List 1.” Notice of Action and
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`Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section
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`301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property,
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`and Innovation, 83 Fed. Reg. 28,710 (June 20, 2018). USTR explained that it had “narrow[ed]
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`the proposed list in the April 6, 2018 notice to 818 tariff subheadings, with an approximate annual
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`trade value of $34 billion.” Id. at 28,711.
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`26.
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`At the same time that it finalized List 1, USTR announced that it intended to impose
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`a 25% ad valorem duty on a second proposed list of Chinese products in order to “maintain the
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`effectiveness of [the] $50 billion trade action” grounded in its Section 301 investigation. Id. at
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`28,712. USTR announced a proposed “List 2” covering 284 tariff subheadings with “an
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`approximate annual trade value of $16 billion.” Id. at 28,711-12.
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`27.
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`On August 16, 2018, USTR published notice of the final list of products subject to
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`an additional duty of 25% ad valorem in List 2, comprising “279 tariff subheadings” whose
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`“annual trade value … remains approximately $16 billion.” Notice of Action Pursuant to Section
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`301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property,
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`and Innovation, 83 Fed. Reg. 40,823, 40,823-24 (Aug. 16, 2018).
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`III. List 3 and List 4
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`28.
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`Following USTR’s announcement of the results of its investigation in March 2018,
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`Defendants expanded the scope of the tariffs imposed under Section 301 of the Trade Act to cover
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`imports worth more than $500 billion—ten times the amount it had deemed “commensurate” with
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`the findings of USTR’s original investigation. Defendants did so for reasons untethered to the
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`unfair practices that USTR had investigated.
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`
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`A.
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`29.
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`List 3
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`Shortly after the former President directed USTR in April 2018 to consider
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`imposing duties on $50 billion in Chinese products, China promptly threatened to impose
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`retaliatory duties on the same value of imports from the United States. In response, the former
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`President “instructed the USTR to consider whether $100 billion of additional tariffs would be
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`appropriate under Section 301” due to “China’s unfair retaliation.” THE WHITE HOUSE, Statement
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`from Donald J. Trump on Additional Proposed Section 301 Remedies (Apr. 5, 2018), available at
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`https://www.whitehouse.gov/briefings-statements/statement-president-donald-j-trump-
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`additional-proposed-section-301-remedies/.
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`30. When USTR finalized List 1 in mid-June 2018, the former President warned China
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`he would consider imposing additional tariffs on Chinese goods if China retaliated against the
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`United States. E.g., Vicki Needham & Max Greenwood, Trump Announces Tariffs on $50 Billion
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`in Chinese Goods, THE HILL (June 15, 2018), available at http://thehill.com/homenews/
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`administration/392421-trump-announces-tariffs-on-50-billion-in-chinese-goods.
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`31.
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`On June 18, 2018, the former President formally directed USTR to consider
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`whether the United States should impose additional duties on products from China with an
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`estimated trade value of $200 billion—despite USTR having not yet implemented List 1 and List
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`2. The former President acknowledged China’s threatened retaliatory “tariffs on $50 billion worth
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`of United States exports” motivated his decision. THE WHITE HOUSE, Statement from the President
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`Regarding Trade with China (June 18, 2018), available at https://www.whitehouse.gov/briefings-
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`statements/statement-president-regarding-trade-china-2/.
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`32.
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`Acknowledging the purpose of the former President’s directive, USTR stated that
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`it would design the newly proposed duties to address China’s threatened retaliatory measures,
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`rather than any of the harms identified in its Section 301 investigation. OFFICE OF THE UNITED
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`STATES TRADE REPRESENTATIVE, USTR Robert Lighthizer Statement on the President’s Additional
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`China Trade Action (June 18, 2018), available at https://ustr.gov/about-us/policy-offices/press-
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`office/press-releases/2018/june/ustr-robert-lighthizer-statement-0.
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`33.
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`Despite these warnings from Defendants, China retaliated by imposing 25% ad
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`valorem tariffs on $50 billion in U.S. goods implemented in two stages of $34 billion and $16
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`billion on the same dates the United States began collecting its own 25% tariffs under List 1 (July
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`6, 2018) and List 2 (August 23, 2018).
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`34.
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`About a week after China imposed its first round of retaliatory duties, USTR
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`published notice of its proposal to “modify the action in this investigation by maintaining the
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`original $34 billion action and the proposed $16 billion action, and by taking a further,
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`supplemental action” in the form of “an additional 10 percent ad valorem duty on [a list of]
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`products [from] China with an annual trade value of approximately $200 billion.” Request for
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`Comments Concerning Proposed Modification of Action Pursuant to Section 301: China’s Acts,
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`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83
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`Fed. Reg. 33,608, 33,608 (July 17, 2018). USTR invoked Section 307(a)(1)(C) of the Trade Act,
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`pursuant to which USTR “may modify or terminate any action, subject to the specific direction, if
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`any, of the President with respect to such action, … if … such action is being taken under [Section
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`301(b)] of this title and is no longer appropriate.” Id. at 33,609 (citing 19 U.S.C. § 2417(a)(1)(c)).
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`USTR initially set a deadline of August 17, 2018 for initial comments; August 20-23, 2018 for a
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`public hearing; and August 30, 2018 for rebuttal comments. Id. at 33,608.
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`35.
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`In its notice, USTR confirmed it had relied on China’s decision to impose
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`“retaliatory duties” as the primary basis for its proposed action. Id. at 33,609 (asserting as
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`justification “China’s response to the $50 billion action announced in the investigation and its
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`refusal to change its acts, policies, and practices”). USTR explicitly tied the $200 billion in its
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`proposed action to the level of retaliatory duties imposed by China on U.S. imports, noting that
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`“action at this level is appropriate in light of the level of China’s announced retaliatory action ($50
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`billion) and the level of Chinese goods imported into the United States ($505 billion in 2017).”
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`Id.; see also id. (Because “China’s retaliatory action covers a substantial percentage of U.S. goods
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`exported to China ($130 billion in 2017),” “the level of the U.S. supplemental action must cover
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`a substantial percentage of Chinese imports.”). Although it pointed to China’s retaliatory
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`measures, USTR did not identify any increased burdens or restrictions on U.S. commerce resulting
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`from the unfair practices that USTR had investigated. See id.
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`36.
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`USTR’s contemporaneous press statements corroborated the contents of its notice:
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`China’s retaliatory duties motivated its proposed action. Ambassador Lighthizer stated that the
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`proposed action came “[a]s a result of China’s retaliation and failure to change its practice.”
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`OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE, Statement by U.S. Trade Representative
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`Robert Lighthizer
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`on
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`Section
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`301 Action
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`(July
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`10,
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`2018),
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`available at
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`https://ustr.gov/aboutus/policy-offices/press-office/press-releases/2018/july/statement-us-trade-
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`representative.
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`37.
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`That same day, the former President suggested that the United States’ trade
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`imbalance with China supported the decision. @realDonaldTrump, TWITTER (July 10, 2018, 9:17
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`PM EDT), https://twitter.com/realDonaldTrump/status/1005982266496094209. Over the
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`following weeks, he also expressed his frustration over China’s purported manipulation of its
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`currency and national monetary policy, as well as his continued displeasure over China’s
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`retaliatory tariffs and the trade imbalance between the two nations. See, e.g., @realDonaldTrump,
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`Twitter
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`(July
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`20,
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`2018,
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`8:43
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`AM
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`EDT),
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`https://twitter.com/realDonaldTrump/status/1020287981020729344;
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`@realDonaldTrump,
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`TWITTER
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`(July
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`20,
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`2018,
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`8:51 AM
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`EDT),
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`https://twitter.com/realDonald
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`Trump/status/1020290163933630464; @realDonaldTrump, TWITTER (July 25, 2018, 7:20 AM
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`EDT), https://twitter.com/realDonaldTrump/status/1022079127799701504; @realDonaldTrump,
`
`Twitter (July 25, 2018, 7:01 AM EDT), https://twitter.com/realDonaldTrump/status/1022074
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`252999225344.
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`38. Within days of these statements, Ambassador Lighthizer announced that, in light
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`of China’s retaliatory duties, USTR would propose to increase the additional duty from 10% to
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`25% ad valorem. Rather than addressing the practices that USTR investigated pursuant to Section
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`301 of the Trade Act, he stated that China “[r]egrettably … has illegally retaliated against U.S.
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`workers, farmers, ranchers and businesses.” OFFICE OF THE UNITED STATES TRADE
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`REPRESENTATIVE, Statement by U.S. Trade Representative Robert Lighthizer on Section 301
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`Action (Aug. 1, 2018), available at https://ustr.gov/about-us/policy-offices/press-office/press-
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`releases/2018/august/statement-us-trade-representative.
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`39.
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`Shortly thereafter, USTR, at the direction of the former President, formally
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`proposed “raising the level of the additional duty in the proposed supplemental action from 10
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`Case 1:21-cv-00490-N/A Document 2 Filed 08/20/21 Page 14 of 25
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`percent to 25 percent.” Extension of Public Comment Period Concerning Proposed Modification
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`of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 38,760, 38,760 (Aug. 7, 2018).
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`USTR also set new dates for a public hearing over six days ending on August 27, 2018. See id.;
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`see also OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE, Public Hearings on Proposed
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`Section 301 Tariff List (Aug. 17, 2018) (modifying hearing schedule), available at
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`https://ustr.gov/about-us/policyoffices/press-office/press-releases/2018/august/public-hearings-
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`proposed-section-301.
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`40.
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`At the same time, USTR adjusted the deadlines for the submission of written
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`comments, setting September 6, 2018—less than a month later—as the new deadline for both
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`initial and rebuttal comments from the public. 83 Fed. Reg. at 38,761. That adjustment, deviating
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`from its past practices, prevented both USTR and the public from considering initial comments at
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`the hearing, and left insufficient time for interested parties to review and respond to the initial
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`comments filed by other parties. USTR also limited each hearing participant to five minutes.
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`Docket No. USTR-2018-0026, https://beta.regulations.gov/document/USTR-2018-0026-0001.
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`Despite those obstacles, approximately 350 witnesses appeared at the six-day hearing, and the
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`public submitted over 6,000 comments. Id.
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`41.
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`Eleven days after receiving final comments from the public, the former President
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`announced that he had directed USTR “to proceed with placing additional tariffs on roughly $200
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`billion of imports from China.” THE WHITE HOUSE, Statement from the President (Sep. 17, 2018)
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`https://www.whitehouse.gov/briefings-statements/statement-from-the-president-4/. Once again,
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`the former President made clear that China’s response to the $50 billion tariff action (i.e., List 1
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`and List 2 duties) motived his decision, and he immediately promised to proceed with “phase
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`three” of the plan—an additional $267 billion tariff action—“if China takes retaliatory action
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`against our farmers or other industries.” Id.
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`42.
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`Following the former President’s announcement, USTR published notice of the
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`final list of products subject to an additional duty, a list commonly known as “List 3.” 83 Fed.
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`Reg. at 47,974. USTR imposed a 10% ad valorem tariff that was set to rise automatically to 25%
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`on January 1, 2019. Id. USTR determined that the List 3 duties would apply to all listed products
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`that enter the United States from China on or after September 24, 2018. Id. USTR did not respond
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`to any of the over 6,000 comments that it received or any of the testimony provided by roughly
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`350 witnesses. Id.
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`43.
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`As legal support for its action, USTR cited Section 307(a)(1)(B) of the Trade Act,
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`which provides that USTR “may modify or terminate any action, subject to the specific direction
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`… of the President … taken under Section 301 if … the burden or restriction on United States
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`commerce of the denial of rights, or of the acts, policies, or practices, that are the subject of such
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`action has increased or decreased.” Id. (brackets omitted). USTR stated that the relevant burden
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`“continues to increase, including following the one-year investigation period,” adding that
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`“China’s unfair acts, policies, and practices include not just its specific technology transfer and IP
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`polices referenced in the notice of initiation in the investigation, but also China’s subsequent
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`defensive actions taken to maintain those policies.” Id. USTR also cited Section 307(a)(1)(C) of
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`the Trade Act, arguing that China’s response to the $50 billion tariff action “has shown that the
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`current action no longer is appropriate” because “China openly has responded to the current action
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`by choosing to cause further harm to the U.S. economy, by increasing duties on U.S. exports to
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`China.” Id. at 47,975.
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`44.
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`The previous Administration announced in December 2018, and again in February
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`2019, that it would delay the scheduled increase in the List 3 duty rate from 10 to 25%. Notice of
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`Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 65,198 (Dec. 19, 2018); Notice of
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`Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 7,966 (Mar. 5, 2019).
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`45.
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`But in May 2019, USTR announced its intent to raise the tariff rate on List 3 goods
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`to 25%, effective either May 10, 2019 or June 1, 2019, depending on the day of export. See Notice
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`of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology
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`Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 20,459 (May 9, 2019) (“List 3 Rate
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`Increase Notice”); see also Implementing Modification to Section 301 Action: China’s Acts,
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`Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84
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`Fed. Reg. 21,892 (May 15, 2019). The notice cited China’s decision to “retreat from specific
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`commitments agreed to in earlier rounds” of negotiations as the basis for the increase in the duty
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`rate. List 3 Rate Increase Notice, 84 Fed. Reg. at 20,459. Unlike with past imposition of new
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`tariffs, USTR did not seek public comment but rather simply announced that the increase would
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`occur. Id.
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`46.
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`Recognizing that List 3 would cause substantial harm to U.S. companies and
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`consumers, as well as the U.S. economy, USTR in June 2019 invited the public to seek exclusions
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`from List 3 duties on a product-specific basis. Procedures for Requests to Exclude Particular
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`Products From the September 2018 Action Pursuant to Section 301: China’s Acts, Policies, and
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`Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84 Fed. Reg.
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`29,576 (June 24, 2019).
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`47.
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`The duties imposed on products covered by List 3 remain in effect as of the date of
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`this Complaint, with the exception of the limited number of products for which USTR granted
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`exclusions. See, e.g., Notice of Product Exclusions: China’s Acts, Policies, and Practices Related
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`to Technology Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 61,674, 61,675 (Nov.
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`1