Cummins Inc. is suing the federal government over tariffs the company says were unlawfully assessed on a part it imported from China during the Trump administration.
The lawsuit, filed in the U.S. Court of International Trade, alleges that U.S. Customs and Border Protection assessed an additional 25% duty on certain turbocharger housings imported from China that Cummins claims were subject to an exemption.
Cummins, which is headquartered in Columbus, is seeking a refund for the excess duties the company claims it was assessed and paid, as well as a declaration from the federal government that the turbocharger housings in question are exempt from the additional duties.
The housings, also referred to in the complaint as “turbine housings” or “compressor housings,” are hollow, circular tubes made from steel or aluminum castings that direct incoming air or exhaust through a turbocharger.
The part was initially included among a list of items in 2018 that were subject to an additional 25% duty as part of an expansion of tariffs on Chinese goods under the Trump administration.
However, the U.S. Trade Representative granted exemptions to the additional duties for a number of products in March 2019 — including items classified as a “compressor housing designed for turbochargers” — based on requests from companies, according to a notice published on the Federal Register.
The notice states that the exemption retroactively applied to imports starting on July 6, 2018.
After the notice was issued, Cummins conducted “an internal assessment” and determined that certain housings it had imported from China were covered under the exemption, the lawsuit states.
In late 2019 and early 2020, Cummins filed additional documentation, corrections to its import documentation or, in some cases, formal protests with U.S. Customs, seeking a refund for the duties that the company says were no longer applicable.
In the lawsuit, Cummins alleges that U.S. Customs processed dozens of its entries from Jan. 23, 2020 to June 5, 2020, “affirming that the compressor housing exclusion applied.”
However, U.S. Customs then abruptly “reversed course” and denied the use of the exemption.
And earlier this year, U.S. Customs denied four formal protests filed by Cummins, each one stating that the exemption was “applicable to compressor housing for turbocharger,” while what Cummins was importing was “a turbine housing for turbochargers.”
Cummins argues in the lawsuit that turbine and compressor housings are “functionally equivalent.” Cummins also pointed to documentation that suggests that the company that requested the exemption used the words “turbine housing” in its request, as well as previous U.S. Customs rulings that state they are the same product.
“To the extent the difference in terminology was deemed relevant in denying these protests, significant evidence confirms that ‘turbine housings’ and ‘compressor housings’ are no different with respect to Cummins turbochargers,” according to the lawsuit.
More than 3,500 U.S. companies — including Ford Motor Co., Tesla Inc. and Volvo Group North America — filed lawsuits against the federal government last year, challenging tariffs imposed on goods imported from China during the Trump administration, according to Reuters.
Cummins has been vocal about its opposition to tariffs in the past.
In 2018, Tony Satterthwaite, who was president of Cummins’ distribution business at the time, told The Wall Street Journal that the tariffs on Chinese-made products were “a big headache” for the company.
The lawsuit does not specify how much money Cummins is seeking to recover. The company did not respond to requests for comment.
However, Cummins Chairman and CEO Tom Linebarger said in 2018 that the company was estimating that tariffs on goods imported from China and elsewhere could amount to a $250 million hit for the company in 2019, The Republic reported previously.
As of Friday morning, the lawsuit was still pending in federal court.
The company is being represented by Christine M. Streatfeild and Kevin M. O’Brien of Baker McKenzie LLP in Washington, D.C.
Cummins Turbo Technologies Limited, U.K.-based entity that operates in South Carolina, also was listed as a plaintiff.
Claims made in filing a lawsuit represent one side of the case and may be contested in later court action.