Section 301 Case Update: Federal Circuit Hears Oral Arguments In HMTX Industries LLC v. United States

A brief update on the appeal of the Section 301 case currently before the U.S. Court of Appeals for the Federal Circuit (CAFC): On January 8, 2025, the CAFC held oral arguments in HMTX Industries LLC v. United States.

Counsel for the Plaintiff argued that the USTR’s actions, which expanded tariffs from $50 billion to over $300 billion, exceeded the permissible scope of “modification” under Section 307 of the Trade Act. Counsel argued that “modification” should allow only moderate or incremental changes, not substantial increases.

During the oral arguments, the CAFC panel, consisting of three judges, examined the statutory interpretation of “modification” and whether the USTR’s actions were consistent with the original Section 301 investigation into China’s technology-related practices. The judges questioned whether the USTR’s tariff increases were a permissible modification or a new action requiring a separate investigation.

The CAFC will likely issue its decision within a few months, however, as previously stated, final disposition of the case will most likely take another year or more. Following the Federal Circuit’s decision, we anticipate there will be further appeal from the losing party. This could mean either a request for a rehearing in front of the CAFC or a writ of certiorari to the Supreme Court. Under this scenario, the earliest we could expect a final decision would be a year from now, and it could very well take even longer. 

For a detailed account of the oral arguments, you can listen to the audio recording provided by the CAFC and available here. Insert HMTX into the search bar and click the blue hyperlinked case title (HMTX Industries LLC v. US (mp3))  to download the mp3 of the oral arguments.