Tariffs on trial: Small businesses take Trump's latest trade levies back to court

Donald Trump's tariff strategy is once again under legal scrutiny.Just as temporary 10% worldwide tariffs expired, two groups of small businesses headed to court to challenge the administration's latest trade measures. The lawsuits target the sweeping tariffs announced earlier this week, which impose double-digit levies on goods from 60 trading partners and cover 99% of US imports.The Trump administration has invoked Section 301 of the Trade Act of 1974, saying the tariffs are aimed at countries that have failed to prevent imports produced by forced labour. The challengers, however, argue that the new measures are effectively replacing the worldwide tariffs Trump imposed last year, which were struck down by the Supreme Court in February.Two lawsuits challenge legality of new tariffsThe first lawsuit was filed on Friday in the Court of International Trade by educational toy company Learning Resources and several other small businesses. Learning Resources was also among the plaintiffs in the earlier tariff case that ultimately succeeded in the Supreme Court.The second lawsuit has been filed by Burlap and Barrel, a New York-based spice company, and Collective Horology, a watch retailer based in Ventura, California. The companies are represented by the Liberty Justice Center, a libertarian advocacy group.Both lawsuits argue that the government failed to adequately establish its case against each individual economy. They also contend that the administration did not explain how the tariffs would eliminate the specific practice they are intended to address, as required under Section 301.Businesses say administration is sidestepping the lawThe lawsuits argue that while the administration has justified the tariffs as a response to forced labour, the measures are instead being used to replace the worldwide tariffs that were struck down earlier this year.“Forced labor is morally indefensible, but an important objective does not give the government permission to ignore the law,” said 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.”The White House did not immediately respond to a request for comment.Experts expect tariffs to remainLegal experts believe the latest lawsuits could face a steeper challenge than earlier ones.Trump had relied on Section 301 during his first term to impose sweeping tariffs on China, and those measures survived court challenges. Experts say that history could make it more difficult to successfully challenge the latest tariffs.Patrick Childress, a partner at Holland & Knight and a former US trade official, said the current duties are likely to remain in force for an extended period.Unlike the Section 122 levies that expired on Friday, “these tariffs will be with us for the long haul,’’ he said.Childress added that even if countries adopt the exact policies sought by the US, they would still have to prove to Washington's satisfaction that those measures are being enforced before the tariffs could be lifted.“This suggests that no short-term path for country-wide relief from the new Section 301 tariffs will be available.’’Get the latest Business News and Live updates. Download the TOI app.