Syringe Importer Has the Money to Absorb 100% Tariff on Needles From China, US Says

A syringe importer said Oct. 23 that, without an injunction on a new 100% tariff on needles from China, it must either “discontinue 95% of business or suffer non-recoupable damages.” In response, the U.S. said that it had enough money to absorb the duties -- for example, by cutting its CEO's pay (Retractable Technologies v. U.S., CIT # 24-00185).

Post-pandemic, importer RetractableTechnologies explained, it must import its best-selling product from China because it would take “at least a year” for the company to manufacture it domestically. Despite repeated attempts otherwise, it was unable to establish a relationship with a foreign producer located anywhere other than China, it said.

Filing after an evidentiary hearing, the company emphasized that it was a “small player” in the largely “monopolized” domestic needle market that would be irreparably damaged by the tariff. It pointed to testimony from one of its distributors, Medline, and the American Health Care Association about the dangers of “a tariff driven syringe and needle monopoly.”

In its own brief, the government pushed back, saying that the only damage Retractable would face would be “selling at a loss” and that the company had enough money to pay the tariffs without changing its business model. That isn’t enough to warrant an injunction, it said.

Preliminary injunctions are supposed to “maintain the status quo” until the end of litigation, the government said. But, in this case, such an injunction would let Retractable “accumulate millions of dollars of unpaid duties to the United States.” The court has set a high threshold for injunctions such as these, it said, and, because Retractable doesn’t face “immediate extinction,” it doesn’t meet that threshold, DOJ said.

The 100% tariff would cause Retractable to lose customers and bear unrecoverable costs, Retractacble said -- such as the money it would be contractually obligated to pay to cover the price differences between its own needles and those its customers would be forced to purchase from its competitors “at premium prices” when the Retractable couldn’t deliver.

The tariffs would also impose nonquantifiable losses on the company, it said, such as major business disruptions. It noted it would be required to “‘hire ninety people’ and ‘train them all at once,’” which it said would be “chaos” considering its products’ significant skilled labor requirements. The government said in its own brief that Retractable expects to begin domestic manufacture of its most popular product by May 2025.

Ultimately, Retractable said, the company would lose customers, and “it is well settled that ‘loss of goodwill, damage to reputation and loss of business opportunities are all valid grounds for finding irreparable harm.’”

“Retractable understands the intent of the tariffs to get the United States independent,” it explained, but “the question is the timeline.” It said the current two-week timeline before the tariffs go into effect would put its Chinese supplier out of business and “destroy [Retractable’s] syringe business.”

In turn, the government said that the company was facing the consequences of its own choices. It said Retractable received $80 million from the U.S. government from 2020 to 2023. Retractable could have used that money to increase its domestic capacity, it said, but, instead, the syringe maker laid off 22% of its domestic workforce and increased its importation of merchandise from China to 91% by 2024.

But the company still has enough to stay afloat until May 2025, it said.

Plus, it could also absorb the duties by reducing executive pay, it added. Retractable expected a loss of about $2 million from its tariffs, it said, but Retractable’s CEO testified that his annual compensation from the company is between $3.5 million and $5 million.

“Even assuming the CEO’s compensation would otherwise be $3.5 million in 2025, that leaves room to cover the estimated losses from the tariffs (approximately $2 million), while still paying the CEO $1.5 million,” it said.

Again, DOJ also argued that Retractable had failed to state a claim and that the Court of International Trade lacks jurisdiction over decisions the president has complete discretion to make (see 2410160053).