Two small businesses have filed lawsuits challenging the Trump administration's sweeping tariffs, which impose double-digit levies on goods from 60 trading partners. The tariffs, announced Thursday, are implemented under Section 301 of the Trade Act of 1974 and target countries the administration states have failed to prevent imports produced by forced labor. These tariffs cover 99% of U.S. imports.
Critics contend the tariffs are intended to replace previous worldwide levies that were struck down by the Supreme Court in February. The new tariffs were introduced as temporary 10% worldwide tariffs, which had also faced legal challenges, expired.
Learning Resources, an educational toy company that was part of the previous successful Supreme Court challenge, filed a new suit on Friday in the Court of International Trade. The company is joined by several other small businesses.
A second lawsuit was filed by Burlap and Barrel, a New York-based spice company, and Collective Horology, a watch retailer from Ventura, California. Both are represented by the Liberty Justice Center, a libertarian advocacy group. According to the lawsuits, the government has not sufficiently established its case against individual economies or detailed how the tariffs will eliminate the alleged forced labor practices, as mandated by Section 301.
"Forced labor is morally indefensible, but an important objective does not give the government permission to ignore the law," stated Sara Albrecht, chairman and CEO of the Liberty Justice Center. "The administration allowed one global tariff to expire and immediately replaced it with another under a different statute. Changing the statute doesn’t change the law."
Legal experts suggest that challenging these new tariffs might prove more difficult than previous rounds. The Trump administration previously used Section 301 to impose significant tariffs on China, which withstood court challenges. Unlike the Section 122 levies that expired, these new tariffs are expected to be long-lasting. Patrick Childress, a former U.S. trade official and partner at Holland & Knight, noted that even if countries enact desired policies, they would still need to prove enforcement to Washington's satisfaction for tariff removal. This suggests a lack of a short-term path for nationwide relief from the new Section 301 tariffs.