Businesses sue over Trump's new forced-labor tariffs, experts doubt legality
Two small businesses have filed a lawsuit challenging the Trump administration's recent tariffs on 80 countries, arguing they misuse Section 301 to recreate a previously invalidated global tariff regime. Legal scholars say the tariffs are likely unlawful and may be struck down by the courts.
The Trump administration announced on Friday that it was imposing tariffs on imports from more than 80 countries, citing alleged forced-labor practices. The measures, applied under Section 301 of the Trade Act of 1974, cover 99.4% of U.S. trade and include 25% duties on Brazilian goods and a proposed 50% rate on certain Canadian products.
Within hours of the tariffs taking effect, two small businesses filed a suit in the U.S. Court of International Trade, contending that the government is using Section 301 as a pretext to reinstate the broad tariff regime the Supreme Court invalidated earlier this year. The complaint argues that the new duties are “designed to preserve substantially the same broad tariff regime that this Court and the Supreme Court have held Congress did not authorize.”
"Section 301 is not a freestanding authorization to tax substantially all imports from substantially all trading partners at rates selected to replicate the invalidated IEEPA tariff regime rather than to eliminate identified foreign practices," the lawsuit states.
Legal experts interviewed said the tariffs likely exceed the statutory purpose of Section 301. Peter Harrell, a visiting scholar at Georgetown University Law Center, said the statute was “never intended for the president to just wholesale rewrite the tariff schedule” and that the new tariffs could be struck down. Kimberly Clausing, a UCLA tax law professor, called the tariffs “clearly unlawful” and suggested the forced-labor rationale is a pretext for recreating the earlier IEEPA-based regime. Alan Wolff of the Peterson Institute warned that the requirement for a foreign practice to burden U.S. commerce is not clearly met for the targeted countries.
A senior administration official emphasized that addressing forced labor has been a long-standing focus for the president and that the timing was intended to avoid complexity. A former USTR general counsel noted that Section 301 provides considerable flexibility, making the legal standard difficult to challenge. KPMG’s trade head warned businesses to plan for the tariffs as they currently stand, noting that Section 301’s extensive record could make reversal more complex.
The lawsuit was brought by the Liberty Justice Center, which previously represented plaintiffs in the successful challenge of the earlier IEEPA-based tariffs. A spokesperson for the Office of the U.S. Trade Representative did not respond to requests for comment.