On September 25, 2025, the U.S. Court of Appeals for the Federal Circuit upheld the United States Trade Representative’s (USTR) authority to impose tariffs on Chinese-origin goods included in Lists 3 and 4A under Section 301of the Trade Act of 1974. The Court’s ruling in HMTX Industries LLC v. United States (No. 23-1891) rejected arguments from U.S. importers that the tariffs exceeded USTR’s statutory authority or failed to comply with the Administrative Procedure Act (APA). The importers are expected to seek review by the U.S. Supreme Court in the coming days or weeks.
The Court concluded that USTR lawfully modified its original tariff action under Section 307(a)(1)(C), which permits modifications or terminations when a prior action is deemed “no longer appropriate.” It also held that the statute allows for substantive tariff expansions, not just reductions or minor adjustments, because Congress gave the USTR the power to modify its own actions. The Court broadly construed terms in the statute such as “modify” and “appropriate,” finding that the USTR had great discretion, subject to the President’s direction, in determining how and by how much to modify an action under this Section.
The Court rejected the idea that authorizing the USTR’s actions at issue in the case would allow the Administration to begin a limitless trade war, stating that “[n]othing in the statute suggests that Section 3027 can be relied upon by USTR to raise tariffs for any reason or by an amount that exceeds what [it] believes to be appropriate to achieve the ends of a discretionary Section 301(b) action.” It also rejected the argument that Section 307(a)(1)(C) violates the U.S. Constitution. In addition, the Court found that the USTR’s remand explanation sufficiently addressed public comments and met APA procedural standards. As a result, the tariffs on goods covered under Lists 3 and 4A remain in effect.
Plaintiffs will have 90 days from the date of the judgment to file for a writ of certiorari to the U.S. Supreme Court to seek an appeal. It is widely expected that the plaintiffs will seek an appeal given the thousands of cases filed in connection with this challenge and the novel issues presented. Any related cases previously filed in connection with this litigation will be held open pending the finality of the judgment or the outcome of any appeal.
If you have questions concerning how this decision may impact your imports or the litigation we filed on your behalf, please contact one of the trade professionals listed here.
CAFC Upholds Lists 3 & 4A China Section 301 Tariffs; Appeal to Supreme Court Likely