China Section 301 Litigation Update - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

On January 8, 2025, the U.S. Court of Appeals for the Federal Circuit (CAFC) heard oral argument in the lead China Section 301 case (HMTX Industries LLC v. U.S.).  The three-judge panel assigned to the case consists of two experienced CAFC judges and one judge sitting by designation from the U.S. District Court for the Eastern District of Texas.

The judges asked the parties to address issues that included statutory interpretation, the scope of what would be a permissible modification to the original 301 tariff action (List 1 and List 2), and whether the retaliatory duties imposed by China were related to the conduct that was the subject of the Section 301 investigation, i.e., China’s practices with respect to forced transfer of technology.

We anticipate that the CAFC will issue its decision within the next few months.  Whatever the CAFC decides, there will likely be further proceedings, either a request for a rehearing before the CAFC, or a writ of certiorari to the Supreme Court.  Accordingly, a final decision in this case is likely to take another year or more.

We will continue to provide periodic updates as the case continues.  In the meantime, should you have any questions, please do not hesitate to contact one of our attorneys.

Federal Register Notices:

• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Raw Flexible Magnets From the People's Republic of China and Taiwan: Continuation of Antidumping Duty Orders and Countervailing Duty Order
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Diffusion-Annealed, Nickel-Plated Flat-Rolled Steel Products From Japan: Final Results of Expedited Second Sunset Review of Antidumping Duty Order
• Uncovered Innerspring Units From the People's Republic of China, the Socialist Republic of Vietnam, and South Africa: Final Results of the Expedited Third Sunset Reviews of the Antidumping Duty Orders
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Crystalline Silicon Photovoltaic Products (Solar Panels) From Cambodia, Malaysia, Thailand, and Vietnam; Scheduling of the Final Phase of Countervailing Duty and Antidumping Duty Investigations
• Slag Pots from China; Institution of Antidumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Softwood Lumber From Canada: Preliminary Results of Changed Circumstances Review
• Float Glass Products From the People's Republic of China and Malaysia: Initiation of Countervailing Duty Investigations
• Investigations; Determinations, Modifications, and Rulings, etc.: Glass Wine Bottles From Chile; Termination of Investigation
• Disposable Aluminum Containers, Pans, Trays, and Lids From China; Scheduling of the Final Phase of Countervailing Duty and Antidumping Duty Investigations
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Paper File Folders From the Kingdom of Cambodia: Postponement of Preliminary Determination in the Countervailing Duty Investigation
• Erythritol From the People's Republic of China: Initiation of Countervailing Duty Investigation
• Investigations; Determinations, Modifications, and Rulings, etc.: Non-Malleable Cast Iron Pipe Fittings From China
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Paper File Folders From the Kingdom of Cambodia: Postponement of Preliminary Determination in the Countervailing Duty Investigation
• Erythritol From the People's Republic of China: Initiation of Countervailing Duty Investigation
• Investigations; Determinations, Modifications, and Rulings, etc.: Non-Malleable Cast Iron Pipe Fittings From China
• Certain Rolled-Edge Rigid Plastic Food Trays; Notice of Commission Determination to Institute a Rescission Proceeding and to Temporarily Suspend a Limited Exclusion Order
• Crystalline Silicon Photovoltaic Products (Solar Panels) From Cambodia, Malaysia, Thailand, and Vietnam; Corrected Notice of Scheduling of the Final Phase of Countervailing Duty and Antidumping Duty Investigations
   

International Trade Administration Highlights 2024 Achievements to Strengthen U.S. Competitiveness and Economic Security - International Trade Commission

WASHINGTON, D.C. - The U.S. Department of Commerce’s International Trade Administration (ITA) is proud to announce its 2024 achievements, highlighting key efforts to enhance the competitiveness of U.S. businesses and workers, strengthen supply chains, and drive innovation in international trade.

“2024 was yet another impressive year for U.S. competitiveness across international markets,” said Under Secretary for International Trade Marisa Lago. “From strengthening supply chains to sustaining U.S. leadership in technology and innovation, ITA continues to enhance U.S. economic security and promote inclusive prosperity for all Americans.”

Key highlights include:

Strengthening American Supply Chains to Advance U.S. Competitiveness

The Supply Chain Center developed innovative tools to assess and help mitigate supply chain risks across critical industries, with special focus on critical and emerging technologies such as AI data centers, quantum computing, and hydrogen. The Supply Chain Center worked across the U.S. Government and with industry, academia, labor, and civil society leaders to enhance supply chain resilience, improve disruption preparedness, and foster strategic policies on supply chains.

A. Launched First-of-Its-Kind Supply Chain Risk Assessment Tool

• ITA introduced the pioneering supply chain risk assessment tool, SCALE, which evaluates structural risks across more than 400 industries that are central to the U.S. economy.

B. Hosted Inaugural Supply Chain Summit

• ITA organized the first-ever Supply Chain Summit in September 2024 with the Council on Foreign Relations, bringing together over 200 in-person leaders and 3,500 online participants to explore proactive strategies for enhancing supply chain resilience.

C. Partnering with 13 Indo-Pacific Nations to Secure Supply Chains

• ITA secured commitments under the Indo-Pacific Economic Framework for Prosperity (IPEF) Supply Chain Agreement to strengthen semiconductor, chemical, critical mineral, and healthcare supply chains.
   
• The IPEF Supply Chain Council, chaired by the U.S. Commerce Department, advanced multilateral cooperation on logistics and analysis.

D. Charting an Innovative Approach to Tackling Critical Mineral Supply Chains

• ITA conducted in-depth analyses of critical mineral supply chains to address vulnerabilities and enhance resilience in industries such as semiconductors and batteries.

Promoting Strong Trade Enforcement for U.S. Workers and Businesses

A. Record-Breaking Enforcement

• ITA administered over 700 AD/CVD orders, each of which defends U.S. businesses and workers from unfair trade practices.

B. Groundbreaking Regulations

• ITA finalized major new trade enforcement regulations, expanding the range of unfair trade practices that ITA is taking action against. These unfair practices span from transnational subsidies to weak labor, environmental, human rights and intellectual property protections.

C. State-of-the-Art Monitoring

• ITA launched the Global Scrap Monitor to enhance supply chain transparency about steel and aluminum imports, building upon the best-in-class Steel Import Monitoring and Analysis and Aluminum Import Monitoring systems.

Strengthening Economic Cooperation with Indo-Pacific Nations

• At the inaugural Clean Economy Investor Forum in June 2024, the 14 IPEF partner nations identified $23 billion in investment opportunities for sustainable infrastructure projects in the Indo-Pacific.
   
• The IPEF partner nations continued to deliver benefits for businesses and workers through landmark agreements to strengthen supply chain resilience, catalyze investments in sustainable infrastructure and climate technologies, and promote fair and predictable business environments.

Modernizing Advocacy, Export and Investment Promotion Services

A. Developed New Tools to Support U.S. Exporters

• ITA released updated digital tools and services, such as the Global Business Navigator, the Exporter Roadmap, new episodes of the Export Nation Podcast, and a Business Matchmaking Platform.

B. Served a Wide Array of U.S. Businesses

• ITA assisted approximately 93,000 U.S. clients, over 80% of which were micro, small or medium-sized companies. Over 20% of these clients were women-owned businesses, minority-owned businesses, or businesses from rural communities.
   
• ITA facilitated $109 billion in U.S. exports and $52 billion in inbound investment with a focus on priority sectors including semiconductors and clean energy — altogether supporting over 519,000 U.S. jobs. 
   
• 2024’s foreign direct investment accounts for about 20% of all FDI that SelectUSA has facilitated since its establishment in 2011.
   
• ITA helped U.S. exporters secure foreign procurements valued at over $72 billion, supporting an estimated 320,000 U.S. jobs.
   
• ITA’s Foreign-Trade Zones program supported 550,000 jobs and facilitated $149 billion in exports, strengthening U.S. manufacturing and employment.

Strengthening Outbound Investment Security

• ITA played a key role in establishing the Outbound Investment Security Program to respond to threats posed by countries of concern attempting to develop sensitive technologies. ITA led stakeholder outreach, including significant input from U.S. investors, to help formulate a targeted policy framework.

Surpassing Travel and Tourism Goals

• ITA drove significant progress under the National Travel and Tourism Strategy in 2024, and as a result, the United States is projected to surpass the Strategy’s five-year visitation goal of 90 million international visitors annually a year early in 2026.

Looking Ahead: ITA will continue to empower U.S. businesses and workers to compete and succeed globally, while fostering innovation and ensuring a level playing field in international trade.
 

CBP Officers Seize Counterfeit Tiffany & Co. Jewelry - U.S. Customs & Border Protection

CHAMPLAIN, N.Y. – U.S. Customs and Border Protection (CBP) officers at the Champlain Port of Entry, Cargo Facility, seized multiple shipments of jewelry for trademark infringement.

From December 2024 to January 6, 2025, CBP officers inspected several separate shipments which contained various pieces of what appeared to be high-end jewelry. After a thorough examination of the merchandise, the jewelry was determined to be counterfeit Tiffany & Co. pieces. All the items were seized for Intellectual Property Rights (IPR) violations, and if genuine would have an estimated total Manufacturer Suggested Retail Price (MSRP) value of approximately $29,989.

“CBP continues to play a crucial role in protecting the consumer and businesses from the importation of fraudulent merchandise,” said Champlain Port Director Steve Bronson. “I’m proud of the outstanding job our officers and import specialists do in targeting these shipments and identifying these violations.”

CBP has the authority to detain, seize, forfeit, and ultimately destroy imported merchandise if it bears an infringing trademark or copyright that has been registered with the United States Patent and Trademark Office or the United States Copyright Office and has subsequently been recorded with CBP through the e-Recordation program https://iprr.cbp.gov/s/. Other violations can include misclassification of merchandise, false country-of-origin markings, health and safety issues, and valuation issues.

Trade in counterfeit and pirated goods threatens America’s innovation economy, the competitiveness of our businesses, the livelihoods of U.S. workers, and, in some cases, national security and the health and safety of consumers. It is also against the law to import counterfeit or pirated merchandise and individual consumers may be liable for a fine even if they did not intend to import counterfeit or pirated merchandise.

If you have information about counterfeit merchandise being illegally imported into the U.S., CBP encourages you to submit an E-Allegation. The E-Allegation reporting tool provides a means for the public to anonymously report to CBP any suspected violations of trade laws or regulations related to the importation of goods into the U.S.

CBP has established an educational initiative to raise consumer awareness about the consequences and dangers that can be associated with the purchase of counterfeit and pirated goods. Information about the Truth Behind Counterfeits campaign can be found on the The Truth Behind Counterfeits page.
 

Sanctioning PRC Cyber Company Involved in Malicious Botnet Operation - U.S. Department of State

~The United States is imposing sanctions today on the Beijing-based cybersecurity company Integrity Technology Group, Incorporated (Integrity Tech), which has links to the People’s Republic of China (PRC) Ministry of State Security, for its role in multiple computer intrusion incidents against U.S. victims.

Integrity Tech is a large PRC government contractor with ties to the Ministry of State Security.  It provides services to country and municipal State Security and Public Security Bureaus, as well as other PRC cybersecurity government contractors.  PRC-based hackers working for Integrity Tech, known to the private sector as “Flax Typhoon,” were working at the direction of the PRC government, targeting critical infrastructure in the United States and overseas.  “Flax Typhoon” hackers have successfully targeted multiple U.S. and foreign corporations, universities, government agencies, telecommunications providers, and media organizations.

On September 18, the Department of Justice announced a court-authorized operation to disrupt a botnet consisting of more than 200,000 consumer devices infected by Integrity Tech in the United States and worldwide.  Along with Five Eyes partners, the United States issued a public cybersecurity advisory outlining some of the tactics employed by PRC-linked cyber actors and providing technical information to network defenders to remediate these threats.

These multi-agency efforts reflect our whole-of-government approach to protecting and defending against PRC cyber threats to Americans, our critical systems, and those of our allies and partners.  The United States will continue to use all the tools at its disposal to safeguard U.S. critical infrastructure and the American people from irresponsible and reckless cyber actors.

The Department of the Treasury sanctions actions today were taken pursuant to Executive Order (E.O.) 13694, as amended.  For more information, see DOJ’s press release, the cybersecurity advisory, and Treasury’s press release.
 

DOT Penalizes JetBlue for Chronic Flight Delays - Department of Transportation

$2 million penalty includes compensation for harmed JetBlue customers and is first ever DOT enforcement action for chronic flight delays

WASHINGTON – The U.S. Department of Transportation (DOT) announced today a $2 million penalty against JetBlue for operating multiple chronically delayed flights. The penalty marks the first time DOT has fined an airline for chronic flight delays – a prohibited unrealistic scheduling practice which can harm both passengers and fair competition across the airline industry. Half of the penalty is going to compensate JetBlue customers affected by the airline’s chronic delays or any future disruptions caused by JetBlue within the next year. DOT has ongoing investigations into other airlines for unrealistic flight schedules. 

“Illegal chronic flight delays make flying unreliable for travelers. Today's action puts the airline industry on notice that we expect their flight schedules to reflect reality,” said U.S. Transportation Secretary Pete Buttigieg. “The department will enforce the law against airlines with chronic delays or unrealistic scheduling practices in order to protect healthy competition and ensure passengers are treated fairly.”

DOT rules prohibit airlines from promising unrealistic schedules that do not reflect actual flight departure and arrival times. Unrealistic scheduling is an unfair, deceptive, and anticompetitive practice that disrupts passengers’ travel plans, denies them reliable scheduling information, and allows airlines to unfairly capture business from competitors by misleading consumers. Chronically delaying a flight for more than four consecutive months is one form of unrealistic scheduling. Under DOT rules, a flight is chronically delayed if it is flown at least 10 times a month and arrives more than 30 minutes late more than 50 percent of the time. Cancellations are included as delays within this calculation. 

DOT’s investigation uncovered that JetBlue operated four chronically delayed flights at least 145 times between June 2022 through November 2023. Each flight was chronically delayed for five straight months in a row – or more. Despite DOT warning JetBlue about the chronic delays on its flight between John F. Kennedy International Airport (JFK) and Raleigh-Durham, N.C., the airline continued to operate three more chronically delayed flights between Fort Lauderdale and Orlando, Fla. and JFK, and between Fort Lauderdale, Fla. and Windsor Locks, Conn.  

The Bureau of Transportation Statistics estimates, based off of data submitted to DOT by JetBlue, that the airline was responsible for over 70 percent of the disruptions for the four chronically delayed flights. Regardless of the cause of the disruption for any specific flight, DOT rules provide airlines adequate time to fix their schedule after a flight becomes chronically delayed to avoid illegal unrealistic scheduling. JetBlue failed to do so. 

DOT’s order requires JetBlue cease and desist its chronic flight delays and pay a $2 million penalty. JetBlue must pay half of the penalty – $1 million in cash – directly to the U.S. Treasury. The other half of the penalty goes to compensate JetBlue passengers harmed by either the chronically delayed flights covered by the DOT’s order or any future flight cancellations or delays of three hours or more caused by JetBlue within the next year. The future compensation must be valued at a minimum of $75 for each harmed passenger. 

Read the full consent order here.

President Biden and Secretary Buttigieg have advanced the largest expansion of airline passengers rights 

Under the Biden-Harris Administration, the Department of Transportation has returned a record amount of refunds to travelers, issued the largest fines against airlines for failing passengers, and advanced the biggest expansion of airline consumer rights ever. 

• Created a new rule to require airlines to provide automatic cash refunds to passengers when owed. The rule makes clear that airline passengers are entitled to a refund when their flight is canceled or significantly changed and they no longer wish to take that flight or be rebooked, when their checked baggage is significantly delayed, or when extra services they paid for – like Wi-Fi – are not provided. The rule also requires refunds to be automatic, prompt, in the original form of payment, and in the full amount paid.
• Passengers can better understand their new refund rights here.​​​​​
• Created a new rule to protect consumers from costly surprise airline junk fees. The rule fosters a more competitive airline market by requiring airlines to disclose critical extra fees upfront – like change fees and baggage fees – to ensure consumers can better understand the true cost of their travel. The rule also bans “bait-and-switch” advertising tactics and requires airlines to clearly tell passengers upfront that a seat is included with the cost of their ticket, and they do not need to pay extra. Airlines have challenged this rule in court, and the court has put a temporary hold on implementation of the rule. The Department will continue to defend this rule and notes that nothing in the Court’s decision prevents airlines from voluntarily complying with this common-sense rule. 
• Created a new rule to protect airline passengers with disabilities. The rule requires airlines to meet more rigorous new standards for assistance and mandates annual hands-on training for airline employees and contractors who physically assist passengers with disabilities and handle passengers’ wheelchairs. The rule also specifies actions that airlines must take when a wheelchair is damaged or delayed during transport and will ensure that people with disabilities can fly safely and with dignity.
• Secured enforceable guarantees from airlines to provide food, lodging, and other support when they strand passengers. After DOT launched flightrights.gov, all 10 large U.S. airlines committed to providing passengers with free rebooking, meals, hotel accommodations, and other amenities when they are responsible for causing a significant delay or cancellation. These are new commitments the airlines added to their customer service plans that DOT can legally ensure they adhere to through enforcement action. 
• Ensured airline passengers received nearly $4 billion in refunds and reimbursements owed to them – including over $600 million owed to passengers affected by the Southwest Airlines holiday meltdown in 2022. 
• Issued nearly $225 million in penalties against airlines for consumer protection violations since President Biden took office. In comparison, between 1996 and 2020, DOT collectively issued just over $70 million in penalties against airlines for consumer protection violations.
• Expanded the Department’s capacity to review air travel service complaints by partnering with a bipartisan group of state attorneys general, which will help hold airlines accountable and protect the rights of the traveling public. Attorneys general who have signed a memorandum of understanding with DOT will be able to access DOT’s complaint system in the near future.
• The Department of Transportation is currently pursuing additional rulemakings that would: 
• Protect passengers stranded by airlines canceling or significantly changing their flights. DOT issued an Advance Notice of Proposed Rulemaking seeking public comment on requiring airlines to pay passengers cash compensation, rebook them for free on the next available flight, and cover meals, overnight lodging, and related transportation expenses when a disruption is airline-caused, such as a mechanical issue or an IT airline system breakdown. 
• Ban family seating junk fees and guarantee that parents can sit with their children for no extra charge when they fly. Before President Biden and Secretary Buttigieg pressed airlines last year, no airline committed to guaranteeing fee-free family seating. Now, five airlines guarantee fee-free family seating, as the Department is working on its family seating junk fee ban proposal.