Legislative Updates

Litigation For Companies That Paid Significant Duties on Chinese Imports Subject to Lists 3 & 4A of the U.S. Section 301 Tariffs

  • Did your company pay significant duties on Chinese imports subject to List 3 ($200 billion) or List 4A ($300 billion) of the U.S. Section 301 tariffs?
  • A recently filed lawsuit could result in refunds of Section 301 duties levied to-date on List 3 and List 4A goods from China.

We want to bring your attention to this time-sensitive litigation, which if ultimately successful, may potentially allow importers to obtain refunds on Section 301 tariffs paid to U.S. Customs and Border Protection. However, as detailed in the summary below, in order to preserve a member company’s right to obtain such refunds for List 3 tariffs, the member company must file suit in the U.S. Court of International Trade by Monday, September 21, 2020.

Those wishing to challenge List 4A duties must file a suit in the U.S. Court of International Trade by Friday, August 20, 2021, which is two years after USTR published list 4.

Summary of Section 301 Litigation

As you may have heard during NAFEM’s Wednesday webcast, HMTX Industries, an importer of vinyl floor tiles, filed a lawsuit in the Court of International Trade challenging the China Section 301 tariffs on “List 3” and “List 4A.” The lawsuit argues that the tariffs were “prosecuted in an untimely fashion and without statutory authorization.” The plaintiffs ask that List 3 tariffs be declared unlawful, that duties be refunded and that the U.S. Government not to impose List 3 tariffs in the future.

Any company that imported products covered by List 3 and 4A, and has paid the additional tariffs, may challenge the tariffs at the CIT. To file a case, companies must concurrently file a summons and complaint at the CIT, and a few additional forms. Companies filing their own case should be prepared to disclose their publically-owned companies, their publically-owned affiliates, and any publically-held companies that has a greater than 10% shareholder interest in them.

Companies may also intervene in the case filed by HMTX Industries as the appeal proceeds, rather than filing their own case, although intervention is subject to the Court’s discretion and may be denied.

Further details of the appeal are available on a Fact Sheet summarizing the appeal and by reviewing the original complaint filed by HMTX.

FAST Act Letter in Support of Infrastructure Legislation

The current surface transportation law—the Fixing America’s Surface Transportation Act—expires in 22 days. Therefore, the undersigned XX organizations urge you to send legislation to the President before September 30 that includes:

  1. A turn-key, one-year extension of the current surface transportation law with increased investment levels;
  2. Federal funding for state departments of transportation and public transit agencies—$37 billion and $32 billion, respectively;
  3. Provisions to ensure solvency of the Highway Trust Fund for the duration of the extension at a minimum.

Public agencies continue to face COVID-19 pandemic-induced revenue declines. As a result, state and local entities already delayed or cancelled $8 billion in surface transportation projects, with more on the horizon absent any clear sign of support from the federal government. Failure to approve a one-year extension with increased funding will only exacerbate this dire situation.

Passing legislation that includes the aforementioned priorities will enable critical improvements that increase the safety and efficiency of the surface transportation system. This timely action by Congress will tangibly enhance the quality of life for all Americans and jumpstart the nation’s economic recovery.

Thank you for your leadership in addressing these critical issues. We look forward to working with you to approve such legislation before September 30.

August 31, 2020

New Guidance Designed to Help Employers Track Remote Work, Unemployment Claims

Summarized from Jade West, National Association of Wholesaler-Distributors

The U.S. Department of Labor’s Wage and Hour Division issued a “Field Assistance Bulletin” (FAB) to help clarify what an employer must do to track work done by employees who are teleworking. This bulletin was issued to help employers who are allowing employees to work remotely due to the COVID-19 pandemic. However, the bulletin applies to all telework or remote work arrangements, regardless of whether they arose from COVID-19.

You can view the Field Assistance Bulletin by clicking here.

Additionally, the U.S. Department of Labor released guidance for President Trump’s executive order on expanded unemployment insurance. Titled Lost Wages Assistance (LWA), the program provides most unemployment insurance claimants up to an additional $400 per week in benefits.  This Executive Order was issued in response to Congress not being able to come to an agreement on extending the original expanded unemployment insurance program that was authorized under the CARES Act. 

You can view the guidance here.

August 17, 2020

Proposed Suspension Would Provide Much-Needed Relief

FEDA recently signed on to a letter from the U.S. Chamber of Commerce urging the Administration and Congress to come together on a path that would provide much-needed tax relief for families without the uncertainty associated with the recent payroll tax executive order (EO).

The letter states that under the current law, the EO creates a tax liability for employees at the end of the deferral period. The liability threatens to impose hardships on employees who will then face a large tax bill because of deferral. The U.S. Chamber suggests that a suspension of the payroll tax would be less challenging and would not leave employees with a large tax bill in 2021.

To read the full letter, please click here.

FEDA encourages members to reach out to their legislators and ask them to work toward a solution that better supports workers. To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner. 

August 10, 2020

Proposed Rule Would Shut Out 55% of Operators, NRA Says

On Aug. 5, the National Restaurant Association sent a letter to Congressional leaders praising many components of the latest proposed coronavirus response legislation and urged them to come to bipartisan consensus on two issues that could have considerable impacts on the short- and long-term survival of the restaurant industry.

The Senate HEALS Act, which is the proposed follow up to the CARES Act, would allow small businesses with fewer than 300 employees that can demonstrate a 50 percent loss in quarterly gross receipts compared to 2019 to apply for a second round of Paycheck Protection Program (PPP) loans. However, at this threshold level, the NRA says that 55 percent of restaurants would not be eligible. The association is appealing for a 20 percent threshold, which would make 430,000 restaurant operators eligible for a second PPP loan.

“The PPP got thousands of restaurants through the spring shutdown, but most are now open under strict business limitations and every month are wrestling with their bottom line,” said Sean Kennedy, executive vice president for public affairs. “A second round of PPP will make or break these restaurants, so we encourage a bipartisan agreement to lower the qualifying threshold so that more of the struggling restaurants in our communities can have a fighting chance.”

Earlier this week, FEDA signed on to a letter from the International Franchise Association that also asked for the second PPP loan threshold to be reduced to a level that would qualify a greater share of struggling small businesses. That letter is available here.

“Many small businesses operate with slim profit margins in a normal economy,” the IFA letter states. “For them, even a revenue decline of 20 percent or greater could mean the difference between staying in business or closing. For their employees, such a revenue decline could mean the difference between remaining at work and receiving benefits or losing their jobs.”

The NRA has also warned Congress that without their action, restaurants across the country would soon be on the hook for thousands of dollars in unexpected tax bills. Because of an IRS decision made weeks after restaurants began accepting PPP loans, normally deductible business expenses are no longer deductible if the business pays the expense with a PPP loan that is later forgiven.

Tell Congress to stop the surprise PPP tax liability here.

August 10, 2020

Chamber Asking Companies to Contact Legislators

As negotiations continue on Capitol Hill over the next coronavirus relief package, the U.S. Chamber of Commerce is holding a Day of Action Monday, Aug. 10, to urge Congress to include liability protections for businesses and other organizations that reopen during the pandemic.

Click here to use the Chamber’s advocacy tool to ask Congress to include liability protections in Phase 4 legislation.

The Chamber is also asking businesses to share this action campaign on social media networks using the hashtag #JobsNotLawsuits. The Chamber has shared sample social graphics businesses may use in their social media posts, which are available here.

August 3, 2020

Survey Reveals How Small Businesses Adapt to COVID-19

The U.S. Chamber and MetLife recently released the monthly Small Business Coronavirus Impact Poll, which surveys how small businesses nationwide are adapting their operations in the wake of the COVID-19 pandemic while preparing amid concerns of a potential resurgence.

Among other insights, the most recent poll found that:

  • Almost 90 percent report their businesses are open in some capacity;
  • 65 percent of businesses are concerned about having to close their business, or stay closed, if there is a second wave of COVID-19;
  • 19 percent report applying for and receiving a PPP loan;
  • 48 percent of small businesses say it could be anywhere from three months to a year before they anticipate rehiring most of their employees;
  • 64 percent of PPP loan recipients are concerned about meeting the criteria necessary to receive loan forgiveness.
August 3, 2020

FEDA Among Nearly 500 Organizations to Sign Letter Supporting Safe to Work Act

On July 30, the U.S. Chamber of Commerce sent a letter to members of Congress asking them to “support the timely, targeted, and temporary liability relief provisions” in the proposed Safe to Work Act.

“These crucial protections would safeguard healthcare workers, providers, and facilities, as well as businesses, non-profit organizations, and educational institutions against unfair lawsuits so they can continue to contribute to a safe and effective economic recovery from the COVID-19 pandemic,” the U.S. Chamber wrote. “This legislation is critically needed and should be enacted as soon as possible.”

The letter was signed by nearly 500 organizations, including FEDA and the National Association of Wholesaler-Distributors. The Safe to Work Act, S. 4317, was introduced by Sen. John Cornyn (R-Texas) on July 27 and is intended to protect businesses that are acting in good faith from being sued for COVID-19 exposure.

The law would cover coronavirus-related exposure injuries that occur between Dec. 1, 2019 and Oct. 1, 2024 and would create detailed procedural requirements to prevent frivolous litigation in federal court.

“The temporary and targeted liability relief provisions contained in S. 4317 are balanced and would ensure that unfair lawsuits against those who work to comply with applicable governmental guidelines do not impede the American people’s health, social, and economic recovery. Importantly, the protections contained in this legislation are limited in duration and scope,” the U.S. Chamber’s letter states. “They are not permanent changes to federal law. Furthermore, they allow states to provide additional protections if they so choose and, critically, preserve reasonable recourse for those harmed by truly bad actors.”

To read the full letter, please visit this page.