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Group of states sues Trump administration over new tariffs
Case contests new 10% to 12.5% duties on imports from most major trade partners
Key Takeaways:
- A coalition of states sued Aug. 3 in Manhattan, challenging the Trump administration’s latest global tariffs under Section 301.
- The 10% to 12.5% duties replaced invalidated or expired tariffs, while businesses alleged officials failed to conduct required country-specific inquiries.
- The litigation proceeds as customs authorities face refund demands for roughly $166 billion collected under tariffs the Supreme Court invalidated.
A group of U.S. states filed a lawsuit challenging President Donald Trump’s new global tariffs that went into effect last month, adding to similar complaints by groups of small businesses who claim the levies are illegal.
The filing Aug. 3 in the U.S. Court of International Trade in Manhattan sets up a now-familiar clash, with separate coalitions of states and small businesses locked in a legal fight with the Trump administration over the third round of tariffs imposed by the president.
The lawsuits accuse Trump and U.S. officials of unlawfully using Section 301 of the Trade Act of 1974 to replace earlier tariffs that were either struck down by the Supreme Court or expired.
Under the new tariffs, the administration is collecting 10% to 12.5% duties on imports from most major trading partners. The move under Section 301 followed a U.S. probe into the alleged failure of about 60 economies to prevent forced labor in their supply chains to the detriment of American workers.
Trump is rebuilding a tariff wall that was struck down in February when the Supreme Court ruled his global levies, issued under the International Emergency Economic Powers Act were illegal.
The president then imposed 10% global tariffs, under Section 122 of the Trade Act. Those were ruled illegal by a trade court, but they were allowed to stay in effect during an appeal. The Section 122 tariffs expired last month.
Section 301 allows the U.S. Trade Representative, under the direction of the president, to impose tariffs in response to other nations’ trade measures it deems discriminatory to American businesses or in violation of U.S. rights under international trade agreements.
In one of the earlier suits by a pair of small businesses — spice importer Burlap and Barrel Inc. and watch retailer Collective Horology — their lawyers alleged the new tariffs failed to reflect the “country-specific inquiry” that Congress expected when it adopted Section 301. They filed the case as a proposed class-action suit covering all importers of record who will pay the new tariffs.
The businesses argued that the trade representative failed to explain “how each economy’s particular practices burden or restrict United States commerce, rather than relying on generalized assertions regarding the effects of forced labor and forced-labor inputs in global supply chains.”
The latest litigation comes as the administration continues to face fallout from the IEEPA tariffs. In the months since the Supreme Court invalidated those tariffs, customs authorities have had to contend with refund demands from thousands of businesses that paid the roughly $166 billion in levies collected.
