Twenty-five states filed a lawsuit Monday challenging President Donald Trump’s latest round of tariffs, accusing his administration of using forced labor concerns as a pretext to replace import taxes that the Supreme Court struck down in February.
The suit comes just days after the Trump administration imposed new tariffs of 10% and 12.5% on goods from 60 trading partners, including the European Union and China. The administration justified the tariffs by asserting that these countries had not done enough to crack down on imports produced by forced labor.
The legal challenge represents the most recent salvo in an ongoing battle over Trump’s tariff policies. In February, the Supreme Court ruled that the administration had exceeded its authority when it imposed sweeping tariffs under the International Emergency Economic Powers Act, or IEEPA. That decision invalidated the so-called reciprocal tariffs that had been a centerpiece of Trump’s second-term trade agenda.
Following the Supreme Court defeat, the administration scrambled to maintain tariffs under a different legal authority. In March, it turned to Section 122 of the Trade Act of 1974, which allows the president to impose temporary tariffs up to 15% for 150 days to address balance-of-payments deficits. Those temporary tariffs expired just as the clock ran out at midnight on July 24. The new forced-labor tariffs took effect at that exact same moment.
The states argue that the administration is improperly using Section 301 of the Trade Act of 1974 to recreate the broad-based tariffs that courts had already rejected. Section 301 permits the president to impose import taxes and sanctions against countries found to engage in unfair trade practices. The states contend that the forced-labor justification is merely a facade for what amounts to the same sweeping tariff regime the Supreme Court had already ruled unlawful.
The lawsuit was filed in the U.S. Court of International Trade in New York and is led by Democratic attorneys general, including those from New York and Oregon. New York Attorney General Letitia James declared in a statement, “After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs.”
The tariffs affect the top 60 U.S. trading partners and cover 99.4% of American imports. Countries that have committed to enforcing bans on forced labor imports face a 10% tariff, while those that have not adopted such prohibitions face 12.5% duties. Some products, including oil, gas, and fertilizer, are exempted from the new tariffs.
Supporters of the administration argue that the tariffs are legally distinct from those previously rejected. Unlike the temporary tariffs under Section 122, the new forced-labor tariffs rest on Section 301, which has been used by past presidents and has historically survived court challenges. In Trump’s first term, Section 301 tariffs on China imposed in 2018 withstood legal scrutiny. The administration maintains that it has proper legal authority under Section 301 to impose the tariffs based on what it characterizes as unfair trade practices related to forced labor.
However, the states and small businesses that have also filed lawsuits argue that the broad application of Section 301 is unprecedented. They contend that historically, Section 301 tariffs have been narrowly targeted at specific nations and industries rather than applied globally to the vast majority of U.S. imports.
This is not the first time states have challenged Trump’s tariffs in court. Earlier in his second term, Democratic-led states successfully challenged the tariffs imposed under IEEPA. The Court of International Trade agreed with the states’ arguments that the emergency law did not authorize tariffs, paving the way for the Supreme Court’s February decision.
The Trump administration has made tariffs a cornerstone of its economic and foreign policy agenda. The president has argued that high tariffs will revive American manufacturing and strengthen the nation’s negotiating position in trade disputes. Despite the legal setbacks, administration officials have signaled determination to maintain some form of tariff structure.
The White House did not immediately respond to requests for comment on the latest lawsuit. The case will now proceed through the courts, with the U.S. Court of International Trade expected to hear arguments in the coming weeks or months.
Economists and business groups have warned that the broad tariffs could increase costs for consumers and businesses. The tariffs contributed to inflation concerns in financial markets when announced, even as other geopolitical factors dominated investor attention.
The litigation reflects a fundamental dispute over presidential power and trade authority. The states argue that Congress, not the president, holds the constitutional power to impose taxes, including tariffs. They contend that even statutes granting the president broad trade authority cannot override constitutional limitations on executive power.
The outcome of this case could determine whether Trump’s latest tariff structure remains in place and could have major implications for the administration’s broader trade policy objectives. It also may influence how courts interpret the president’s authority under Section 301 and other trade statutes in future disputes.