September 30, 2020

Automakers Sue U.S. Government Over Tariffs on Chinese Imports

Automakers Tesla, Volvo, Ford and Mercedes-Benz have sued the U.S. government over tariffs on Chinese goods, demanding customs duties paid on imports be returned, with interest.

The lawsuits were filed over the past days in the New York-based Court of International Trade and concern tariffs imposed by the U.S. Trade Representative on imports from China, which Tesla in its filing called “arbitrary, capricious, and an abuse of discretion.”

The duties came amid a wider trade dispute between Washington and Beijing, and the automakers are asking for the tariffs to be revoked and any money paid to import parts returned.

Mercedes in its filing accused Washington of “prosecution of an unprecedented, unbounded and unlimited trade war impacting over $500 billion in imports from the People’s Republic of China,” and argued U.S. law “did not confer authority on defendants to litigate a vast trade war for however long, and by whatever means, they choose.”

The lawsuits target the expansion of tariffs by the Office of the U.S. Trade Representative, under Section 301 of the Trade Act of 1974. 

China and the U.S. signed their “phase one” trade deal earlier this year that partially ended the dispute, under which China promised to buy $200 billion in U.S. goods and Washington backed down on tariffs on $160 billion in Chinese goods, particularly consumer electronics.

The U.S. also slashed by half 15% tariffs on $120 billion in goods but kept in place 25% duties on $250 billion in imports, which some of the automakers cited in their lawsuits.

Beijing has retaliated for these levies, while Washington is aiming both to reduce its trade deficit and reform Chinese business practices it considers “unfair.”

The Commerce Department reported the U.S. trade deficit in July surged nearly 11% to $63.6 billion, with the deficit with China climbing to $28.3 billion.

(Source: VOA)