Trump’s New Section 301 Tariffs Face Lawsuit Alleging ‘Arbitrary’ Backdoor Duties

The Lawsuit Against Trump’s Section 301 Tariffs

Two U.S. businesses have filed a lawsuit against the federal government over the latest round of Section 301 tariffs, installed last week on more than 60 trading partners. The companies say the duties are “arbitrary and capricious” and were never genuinely aimed at forced labor regulations—instead, they were hastily constructed as a backdoor to reinstate tariffs previously struck down by the courts.

The Trump administration introduced a temporary 10% global tariff under the International Emergency Economic Powers Act (IEEPA) earlier this year, but that was invalidated by a February Supreme Court ruling. A subsequent Section 122 levy was then challenged at the Court of International Trade, and the administration opted to let it expire. The new Section 301 move is the latest attempt to maintain a broad tariff structure, yet the lawsuit contends that the investigation underpinning it was effectively a pre-determined snapshot: the 10% or 12.5% rates on 60 countries match the earlier IEEPA schedule almost exactly.

The filing points to a rushed timeline, noting that a prior Section 301 probe into China’s technology and intellectual property policies during the first Trump administration took more than twice as long. It also argues that the Office of the U.S. Trade Representative (USTR) failed to provide a meaningful country-by-country analysis of how each nation’s forced labor rules actually burden U.S. commerce, or how the tariffs would improve global labor standards. Because the duties were imposed under Section 301, they can stay in place for only 150 days unless Congress votes to extend them.

The Legal Arguments and Their Wider Meaning

A ‘Workaround’ That Could Fall Apart

At the core of the legal challenge is the claim that the USTR picked tariff rates to mirror the earlier IEEPA and Section 122 duties, then assembled supporting evidence afterward. Alexander Schaefer, a partner at Crowell & Moring, told Supply Chain Dive that the administration will have a “pretty tough sell” convincing a court that proportional relief from forced labor issues in 60 different countries just happened to fall in the 10–12.5% range for every single one. The lawsuit notes that the investigation itself concluded only after the rate structure was already known, which would violate the procedural requirements of Section 301.

Why a Rushed Investigation Undermines the Tariff

The USTR completed the forced labor investigation in a fraction of the time taken by earlier Section 301 cases, and the plaintiffs argue that this abbreviated process means the agency could not have genuinely considered economy-specific questions. Without a detailed, country-level rationale, the tariffs look more like a blanket trade policy tool than a targeted response to forced labor violations. This procedural defect could be enough to convince the Court of International Trade to vacate the duties.

The Forced Labor Remedy Problem

The lawsuit also attacks the very idea that tariffs are an effective instrument to improve forced labor regulations abroad. Section 301 requires a determination that a foreign act, policy, or practice burdens U.S. commerce, but the filing says USTR substituted a generalized assertion about global forced labor for the required specific analysis. If the court agrees, it would constrain future administrations from using trade law to address human rights concerns without detailed economic grounding.

What’s at Stake for Trade Policy

The case is the latest in a series of court fights over the Trump administration’s reliance on executive tariff powers. While prior challenges to IEEPA tariffs succeeded, those levies are now gone. If this lawsuit prevails, the new Section 301 duties could be ordered removed and refunds granted for duties already collected. That would upend supply chains that have built costs around the tariffs, while a government victory would further solidify the president’s ability to use trade laws as leverage. The 150-day clock is ticking, and a congressional extension is far from assured.

What Importers Need to Know About the Challenge

Steps for Importers Facing the Tariffs

Assess exposure immediately. Identify all shipments subject to the new Section 301 duties and calculate the added cost since the tariffs took effect last week. This will help determine the refund potential if the lawsuit succeeds.

Document customs entries carefully. Keep full records of tariff payments and entries. In the event of a court-ordered refund, the ability to reclaim duties will depend on accurate documentation, including proof that the goods were covered by the invalidated tariff lines.

Weigh supply chain commitments against the 150-day sunset. The duties can expire unless Congress acts. While the administration will fight to preserve them, importers should avoid locking in long-term contracts that hinge entirely on these rates, as the legal and political landscape could shift within months.

Monitor the case schedule. The litigation may move quickly, especially if the plaintiffs seek a preliminary injunction. Even preliminary rulings could trigger duty suspension.

Consider alternative sourcing contingency plans. If the tariffs are upheld, forced labor benchmarks could become a permanent consideration in sourcing decisions. Engage suppliers now about their compliance documentation in case the policy framework sticks.