Trump’s tariffs face fresh legal challenge in US court

The case centres on Section 301 of the Trade Act of 1974, which the Trump administration is using to impose additional tariffs on goods from 60 economies over what it says are failures to prohibit and effectively enforce bans on imports produced using forced labour.

The tariffs, introduced in July, are generally set at 10 per cent or 12.5 per cent, depending on the economy and the circumstances identified by the US Trade Representative. Certain products and trading partners are subject to exemptions or different arrangements.

The countries and economies covered include major US trading partners such as China, India, Japan, Canada, Mexico, the European Union and Nigeria. The White House said the measures followed investigations into whether these economies had adequate restrictions on goods made using forced labour.

The legal challenge has been brought by several small businesses and 25 US states led by Democratic attorneys general. They argue that the administration exceeded the president’s authority by using Section 301 to impose broad tariffs without sufficiently specific investigations into individual countries.

The administration disputes that argument and says the tariffs followed formal investigations by the US Trade Representative, including public hearings and consultations with affected trading partners.

The case is particularly significant because it follows an earlier Supreme Court ruling that rejected Trump's attempt to impose a separate set of broad tariffs under the International Emergency Economic Powers Act, or IEEPA. The administration subsequently turned to Section 301 and other legal authorities for new trade measures.

The three-judge panel hearing the latest case includes judges appointed by presidents from both Republican and Democratic administrations. The court is expected to issue a written ruling after considering the arguments.

The dispute could have wider implications for US trade policy because a ruling against the administration could limit its ability to use Section 301 as a basis for broad, economy-wide tariffs.

For now, the tariffs remain in place while the legal challenge proceeds. The central question before the court is whether the Trump administration lawfully used the 1974 trade law to impose the duties and whether its investigations provided a sufficient legal basis for doing so.