Coalition of 25 states challenges Section 301 tariffs, calling them an illegal tax workaround

WASHINGTON — A coalition of 25 U.S. states filed a major lawsuit against the Trump administration on Monday, challenging its latest round of import tariffs and alleging that the levies are an illegal attempt to bypass a key Supreme Court ruling.

The legal challenge, led by New York Attorney General Letitia James, targets double-digit tariffs recently imposed on goods from 59 countries and the European Union. The administration enacted the trade penalties under the justification that these foreign economies have failed to adequately crack down on forced labor in their supply chains.

However, state officials argue the forced-labor justification is merely a pretext designed to replace earlier import duties that were invalidated by the nation's highest court earlier this year.

“After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs,” James said in a statement announcing the legal action.

A Legal Battle Over Tariff Power

The dispute stems from a long-running effort by President Donald Trump to revamp U.S. trade policy in favor of higher protectionist barriers. Last year, the president invoked the 1977 International Emergency Economic Powers Act (IEEPA) to implement sweeping double-digit tariffs, arguing that the persistent U.S. trade deficit constituted a national economic emergency.

In February, the Supreme Court struck down those levies, ruling that the 1977 law did not grant the executive branch authority to impose broad import tariffs. The court order forced the federal government to issue refunds to affected importers.

To offset the financial blow, the administration temporarily enacted a 10% global tariff while preparing a longer-term strategy. When those temporary measures expired on July 24, the White House pivoted to Section 301 of the Trade Act of 1974.

Under Section 301, the tariffs range from 10% to 12.5% and hit foreign trade partners representing approximately 99% of all goods imported into the United States.

White House Defends Trade Strategy

The White House pushed back against the lawsuit, asserting that the president acted entirely within his statutory authority to protect American commerce and labor standards.

“The United States is using its lawful authority to obtain the elimination of unreasonable acts, policies, and practices that burden U.S. commerce,” said White House spokesman Kush Desai. “A foreign country’s failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens U.S. commerce, including American workers, and must be addressed.”

Desai emphasized that Section 301 tariffs have repeatedly withstood legal scrutiny, pointing to their successful deployment during Trump’s first presidential term to target Chinese trade practices.

Growing Resistance in Court

The multi-state lawsuit joins two separate complaints filed in the U.S. Court of International Trade in July by small business owners. Those suits contend that the administration failed to conduct individual assessments for each country before applying broad trade penalties, violating the procedural standards laid out in trade law.

Legal scholars note that while Section 301 provides clearer statutory authority than the emergency powers used previously, the repetitive shifts in policy could complicate the administration’s defense.

Barry Appleton, a international trade law professor at New York Law School, noted that Section 301 comes with explicit guardrails established by Congress, including requirements for formal investigations and public documentation.

“The government’s defense won’t be ‘I had no power to do this.’ It will be, ‘I stayed inside the lines Congress drew,’” Appleton explained. “That is a real fight, not a formality, and it is the one that will decide this case.”

Participating States

The states joining New York in the lawsuit include Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia, Vermont, Washington, and Wisconsin.