Fresh Tariffs Steer Trump Administration Into Legal Arena. How The Battle Is Taking Shape

The Trump administration has been drawn into a legal battle over the latest tariffs it has imposed, just hours after it was notified.

Two small businesses have taken up the fight to the courts. They have said the US administration is deploying Section 301 as a pretext to replace a tariff regime that the Supreme Court quashed five months ago.

The two businesses that filed the lawsuit are Burlap & Barrel, a spice importer that previously challenged Trump’s temporary 10% global tariff, and Collective Horology, a California watch retailer.

The US administration’s use of Section 301 has a precedent, unlike the temporary global tariff authority, the International Emergency Economic Powers Act (IEEPA), as it has been formerly invoked by former US presidents.

The Liberty Justice Center, which represents the small businesses, has argued that the invoked law, Section 301, does not grant any authority “to tax substantially all imports from substantially all countries at preestablished rates.”

The US administration has countered this saying it’s not merely looking for ways to resurrect its “liberation day tariffs.”

An official said concerns on forced labor “is something that President Trump has been focused on … for many years.”

⁠Many US states led by Democratic politicians had joined in the two previous legal challenges to Trump‘s tariffs. The present tariff regime is also like to meet such legal challenges, with Oregon Attorney General making clear that the state was considering options for a third lawsuit.

The latest tariffs are also likely to drive up costs for everyday Americans, its opponents said, adding it may not be effective to combat forced labor overseas.

The fresh legal challenge also has urged the trade ⁠court to declare the tariffs unlawful, prevent their enforcement and preserve importers’ ability to receive refunds for any illegal tariffs.

On Friday, the day when the 150-day tariffs ended, the administration restored a tariff floor across most US imports.

It has resorted to new duties on goods from 60 trading partners after the Supreme Court struck down the legal basis for his earlier global tariff program.

The 10% and 12.5% took effect at 12:01 a.m. EDT Friday. These levies , replaced a temporary 10% global tariff that had remained in place for 150 days. The affected economies had failed to adequately prevent products made with forced labor from entering their supply chains, US Trade Representative Jamieson Greer said in a statement.

The administration has invoked Section 301 of the Trade Act of 1974 by imposing tariffs on 60 economies “for their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor,” a statement from the Office of the US trade representative said.

The Office of the US Trade Representative had initiated two investigations under Section 301 of the Trade Act of 1974 in March. This was seen as a move aimed at replacing the existing tariffs, which lapsed after their tenure ended on Friday.

The levies that lapsed on Friday were invoked under Section 122 of the 1974 law and announced by the administration hours after the Supreme Court struck down his global tariffs on February 20.

A separate probe into whether other countries are using excess manufacturing capacity to export to the US in a manner that is hurting the US economy is on.

The 10% rate that is now being challenged has been slapped on countries including Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom. More than 80 countries have been hit by the tariffs overall.

The excess capacity probe covers China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.