Trade Court Hears Challenge to Trump's Section 301 Tariffs

A three-judge Court of International Trade panel weighed a challenge to Trump's 10-12.5% Section 301 tariffs on 86 countries, covering 99% of US imports; no ruling date is set.

Lead

The US Court of International Trade in Manhattan heard arguments on Wednesday, Sept. 30, in a challenge to the Section 301 tariffs imposed by President Donald Trump. Small businesses and Democratic-led states argue that the Office of the US Trade Representative (USTR) built a near-universal tariff wall without the findings the statute requires. The duties of 10% or 12.5% apply to 60 economies, or 86 countries when the 27-member European Union is counted individually. They cover 99.4% of US imports.

What Is the Court Being Asked to Decide?

The court is being asked whether USTR lawfully used Section 301 of the Trade Act of 1974 to impose broad duties over forced-labor practices. Section 301 allows action against "unjustifiable, unreasonable or discriminatory" foreign practices. The lead plaintiff, educational toy company Learning Resources, is the designated test case.

Challengers argue that Trade Representative Jamieson Greer disregarded the framework Congress built for forced-labor concerns. They say the record lacks country-specific evidence and relies on language that practices "might cause harms" rather than concrete findings. They also contend the tariffs are a pretext to revive the global levies the Supreme Court struck down earlier this year.

The government, represented by Justice Department lawyer Eric Hamilton, argues that Section 301 gives USTR broad discretion. It says a single comprehensive report and illustrative case studies reasonably support the action "across the economies covered."

What Did the Judges Signal?

The three judges pressed the government on the evidence. Judge Timothy Reif asked whether the administration was ignoring how Congress structured the trade law. Judge Jennifer Choe-Groves said the record showed "not a lot of depth" on forced labor. Judge Lisa Wang examined the weight owed to public statements by administration officials about the tariffs' purpose.

Challengers also pointed to an inconsistency. USTR cited China's imports of Brazilian beef as a case study, yet Brazilian beef is exempt from the tariffs. The plaintiffs asked the court to rule on the underlying legal questions rather than let the administration supplement the record.

How Did the Tariffs Reach This Point?

The Section 301 duties are the third legal vehicle for the administration's global tariff program in 2026. Tariffs under the International Emergency Economic Powers Act were invalidated by the Supreme Court in February, and the government has been compelled to refund more than $166 billion collected under them. A temporary 10% duty under Section 122 then bridged the gap until July. The trade court separately invalidated those Section 122 tariffs in May.

USTR opened its forced-labor investigations in March, consulted more than 45 governments and found on June 2 that the identified practices were actionable. The duties took effect at 12:01 a.m. ET on July 24, with limited relief to July 28 for goods in transit.

Who Pays Which Rate?

The structure follows each partner's forced-labor enforcement regime:

• 10% applies to 17 economies with existing forced-labor prohibitions or reciprocal trade commitments, including Canada, Mexico, India and Bangladesh.
• 12.5% applies to the other 43 economies, including China and Brazil.
• Combined ceilings cap duties on the EU and Taiwan at 10% including the standard most-favored-nation rate, and on Japan, South Korea and Switzerland at 12.5%.

Exemptions cover goods already subject to Section 232 measures, such as steel, aluminum and autos. Qualifying USMCA goods, certain raw materials, energy and agricultural products are also exempt.

What Comes Next?

The panel did not say when it will rule. A decision against the administration would revive the refund question that followed the IEEPA ruling and could push the White House toward yet another statutory basis. A ruling for the government would leave the near-universal duties in place and allow the administration to rely on Section 301 as a durable tool.

Outlook

The case tests how far Section 301 can stretch as a general-purpose tariff authority. The judges' focus on the thin country-specific record suggests the evidentiary basis will weigh heavily in the outcome. Importers continue to pay the duties while the panel deliberates, and a separate suit by Democratic-led states runs alongside the small-business case.