Two small businesses have sued the Trump administration over its newest round of global tariffs, which took effect Friday. The suit argues the president is unlawfully using Section 301 of the Trade Act of 1974 to revive import taxes the Supreme Court already struck down under a different law.
The challenge landed Friday in the US Court of International Trade, where two small businesses accused President Donald Trump and US officials of unlawfully using Section 301 of the Trade Act of 1974. They say the administration is reaching for that authority to replace earlier tariffs the Supreme Court had struck down.
A forced-labor rationale
Under the new policy, the United States charges 10% to 12.5% on imports from 60 trading partners. Those countries account for 99% of US imports, and Washington says they failed to properly enforce bans on goods made with forced labor. The levies took effect as temporary 10% worldwide tariffs expired at 12:01 a.m. Friday.
Some goods escape the duties. Oil and gas, fertilizer, and products that qualify for duty-free status under the US-Mexico-Canada Agreement are exempt.
A workaround after a court defeat
Trump turned to Section 301 after a February setback, when the Supreme Court ruled that the 1977 International Emergency Economic Powers Act did not authorize his broader tariffs. That decision forced the administration to pay refunds to importers that had already paid. He had first justified those tariffs by invoking the emergency-powers law, arguing the country’s trade deficit amounted to a national emergency.
Section 301 lets the president act against countries found to use unjustifiable, unreasonable or discriminatory trade practices. Trump had used it to tax Chinese goods in his first term, and those levies survived court challenges.
Costs land at home
Importers usually try to pass those costs to consumers through higher prices. The administration is taking a risk by rolling out new tariffs ahead of the Nov. 3 midterm elections. US Trade Representative Jamieson Greer defended it, noting the country has enforced a forced-labor import ban for nearly a century and saying it is “well past time for our trading partners to do the same”. Critics were unconvinced: Rep. Richard Neal, the top Democrat on the House Ways and Means Committee, argued the forced-labor justification was too convenient to be taken seriously.
Sources: Bloomberg (snippet-based), Associated Press
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