First Lawsuit Tests Legality of Trump's New Section 301 Tariffs
A lawsuit filed by small businesses against President Trump's new tariffs is unlikely to derail a trade policy that experts view as legally durable, signalling that higher baseline costs for global supply chains are here to stay.
Small businesses backed by the Liberty Justice Center sued the Trump administration on Friday to block new tariffs on imports from more than 80 countries. The duties, which took effect at 12:01 a.m., range from 10% to 12.5% and are justified by the White House as a response to forced labor practices.
Unlike previous tariffs that were swiftly struck down by the Supreme Court, these levies were imposed under Section 301 of the Trade Act of 1974. This statute explicitly grants the president tariff authority and requires a formal investigative process, creating what economist Justin Wolfers described as a "nice fat paper trail."
Trade attorneys and analysts widely expect this legal foundation to survive judicial scrutiny. U.S. Trade Representative Jamieson Greer has called the statute "incredibly legally durable," and Nick Baker of Kroll noted the initiative is "expected to withstand any potential legal challenge and likely represent the new normal for U.S. trade policy."
The plaintiffs argue that Section 301 is a targeted authority rather than a "freestanding authorization" for universal taxes, calling the uniform rates across dozens of economies "arbitrary and capricious." While the Liberty Justice Center previously helped overturn Trump's initial tariffs, legal experts note courts are historically reluctant to second-guess policies imposed under laws that directly authorize tariffs.
For companies and investors, the immediate impact on supply chains is muted because the new rates closely mirror the 10% global baseline that expired this week. However, the forced-labor investigation is just one of several active trade probes.
The current tariff levels are likely a floor rather than a ceiling. “The forced labor 301 tariffs are not the end of the story,” said Patrick Childress, a former counsel at the Office of the U.S. Trade Representative. He expects the administration to increase overall rates to match the higher levels the Supreme Court struck down under a different law.
The new policy has already drawn international friction, with the European Union and New Zealand dismissing the forced-labor rationale and Brazil announcing plans for retaliatory tariffs. The litigation is expected to take months or years to resolve, meaning the duties will likely remain in effect throughout the legal battle.
