UNITED STATES COURT OF INTERNATIONAL TRADE

Slip Op. 25-96

In Axle of Dearborn, Inc. D/B/A/ Detroit Axle v. Dept. of Commerce, Court. No. 25-00091, Slip Op. 25-96 (July 28, 2025), the Court addressed “the President’s rescission of the de minimis exemption for goods from China.” The Court denied Plaintiffs’ Motion for a Preliminary Injunction and the case is stayed pending the final resolution of V.O.S Selections, Inc. v. United States, 49 CIT.

Although Axle can seek relief based on the V.O.S Selections, Inc. v. United States decision of permanently enjoining the “Trafficking Orders”, the court in the instant matter is deciding whether Axle’s claim is successful based on if it “falls outside the scope of the V.O.S. stay.” Executive Order 14157, Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists, 90 Fed. Reg. 8439, 8439 (Jan. 20, 025). Axle argues that Trafficking Orders implicating the de minimis exemption are ultra vires outside of what the court has already addressed regarding the Trafficking Orders in V.O.S Selections, Inc. v. United States as ultra vires, since, the orders do not address stated objectives and instead “aim to create leverage to ‘deal with’ those objectives.” V.O.S., 49 CIT at __, 772 F. Supp. 3d at 1381; see also Order Holding Mots. to Stay in Abeyance, June 3, 2025, ECF No. 63, V.O.S. Selections, Inc v. United States, Case No. 25-00066 (Ct. Int’l Trade). Further, Axle argues that the Executive Branch cannot reduce the exemption below the $800 floor that Congress created and if they wanted to, then they would have to go through the notice-and-comment rulemaking process.

The court refuses to grant Axle redundant, contingent relief. Under V.O.S, Axle already has a basis for relief and the Federal Circuit stayed all relief Axle requested.

Slip Op. 25-92

Before the court in United States v. Rayson Global and Doris Cheng, Court No. 23-00201, Slip Op. 25-92, dated July 18, 2025, is a second motion brought by plaintiff United States (the “government”) for judgment by default on its claims for recovery of a civil penalty and collection of duties unpaid by the defendants. The second motion that is the subject of Slip Op. 25-92 arises from a 2023 Complaint filed by the plaintiff, alleging that the defendants “negligently caused merchandise (‘uncovered mattress innersprings’ or ‘innersprings’) to be introduced into the commerce of the United States under false declarations of country of origin and thereby deprived the United States of ordinary duties, antidumping duties, and ‘Section 301’ duties.” The plaintiff alleged that the defendants falsely claimed country of origin of their products as Thailand. In its Complaint, the government claimed that the proper country of origin for the defendants’ products was China.

At issue in the Complaint were 46 entries of the product made between September 2018 and November 2019. Depending on the country of origin declarations for the subject products, the duty rates differed; Thailand-originating products are set to receive duty-free treatment, whereas China-originating products are not eligible for duty-free treatment per Section 301 tariffs. Because of the defendants’ alleged tariff evasion by claiming inaccurate country of origin status, the government initiated the subject lawsuit, seeking “a civil penalty in the amount of the total domestic value of the merchandise, which, based on the allegations in the Complaint, would be the maximum penalty provided for under 19 U.S.C. § 1592(c)(3)(A). Because the defendants defaulted by failing to respond to both the plaintiff’s initial and second motions, the court “accept[ed] as a fact that the material false statements upon which plaintiff bases its Complaint and motion for judgment by default occurred as a result of negligence on the part of defendants.” See 19 U.S.C. § 1592(e)(4).

Following procedure upon default, Judge Timothy Stanceu, on behalf of the Court of International Trade, ordered that “defendants pay all duties, taxes, and fees that remain unpaid on the liquidated entries at issue in this case, with interest as required by law” and that “[the] defendants make the required cash deposits that have not yet been tendered, for all entries at issue in this case that remain unliquidated, with interest as required by law.” Accordingly, Judge Stanceu awarded the government a civil penalty totaling over three million dollars. Slip Op. 25-92 affirms the threat of high-stakes penalties following duty evasion and country of origin violations. This opinion also reinforces the professional expectations of individuals, as it held Doris Cheng, Chief Executive Officer of the defendant corporation, liable for the international trade violations, likely ensuring a hard-handed approach to enforcement of trade duties as well as accurate and careful documentation.