Trump’s Latest Global Tariffs Face Tough Questions from US Court

The Trump administration faced skeptical questions from a US trade court about the legal foundation underpinning President Donald Trump’s latest round of global tariffs, once again putting one of his signature economic policies under a judicial microscope.

A three-judge panel pressed a Justice Department lawyer during a hearing Wednesday about whether US Trade Representative Jamieson Greer had disregarded a framework Congress adopted decades ago to address concerns about forced labor practices around the world harming US economic interests, and also whether the trade agency presented detailed enough justifications to subject dozens of countries to the levies.

The judges also turned a critical eye to some of the claims raised by the small businesses and Democratic state officials who sued, including arguments that the tariffs under Section 301 of the Trade Act of 1974 were a pretext to revive earlier global levies that the US Supreme Court struck down.

The US Court of International Trade panel didn’t say when it intends to rule. Another sticking point during arguments was whether the judges should give Greer a chance to fix gaps in the record if they concluded the government had the weaker case. Pratik Shah, the lead attorney arguing for the challengers, asked the court for a ruling on the underlying legal issues, saying they would rather be able to appeal a loss than keep the dispute in limbo.

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Throughout his second term, Trump has touted import duties as tools to bring manufacturing back to the US, exert leverage over trading partners, and raise revenue. But his tariff policies have faced a rocky legal path.

The Section 301 forced labor tariffs followed two earlier rounds of duties under different legal authorities. One under an emergency powers law was struck down by the Supreme Court earlier this year, compelling the administration to refund the more than $166 billion it had collected. The other, which was temporary, faced an initial setback before the trade court in May before an appeals court allowed it to continue during the litigation. The administration rolled out the Section 301 tariffs to take effect when those temporary duties expired in July.

The latest policy at issue — which Greer announced at Trump’s direction — features 10% or 12.5% tariffs on goods from 60 economies spanning 86 countries, with the 27-member European Union counting as a single economy. Those trading partners send 99.4% of imports to the US, according to briefs filed in the court fight.

Section 301 empowers the president to take steps to address an “unreasonable or discriminatory” practice by another country that “burdens or restricts United States commerce.”

Greer said in the July announcement that the expanded levies would “begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere.”

During Wednesday’s hearing, Judge Timothy Reif repeatedly asked Justice Department lawyer Eric Hamilton to identify the specific part of the trade law that Greer relied on for his authority to adopt the tariffs. Reif expressed confusion when Hamilton replied that they weren’t relying on either of two sections that spelled out the definitions for “unreasonable” conduct by trading partners. The judge asked if that meant the administration was “ignoring” how Congress had set up the trade law.

Hamilton replied that they interpreted the structure of the law differently, and that Greer had relied on another section that gave him broad discretion. Hamilton also faced lengthy questioning about the extent of country-specific evidence and analysis that Greer provided to support his determination that each country failed to address forced labor in their imports, and how that burdened the US economy.

Judge Jennifer Choe-Groves at one point commented that there was “not a lot of depth” in the evidence the administration cited to show how it determined certain goods were affected by forced labor.

Shah stressed during the hearing on Wednesday that Greer’s report used hedging language that the practices of trading partners might cause harms to the US, as opposed to making concrete findings of actual impacts. Hamilton countered that it was sufficient to cite a handful of case studies to illustrate the broader economic principles that applied across the economies covered by the tariffs.

Shah faced questions at the start of the hearing about the challengers’ allegations that Trump and other top officials made public comments indicating they saw the Section 301 tariffs as an alternative way to accomplish the levies the Supreme Court struck down. He also argued the record featured other evidence that the forced labor concerns were a pretext, such as the administration’s decision to cite China’s importation of beef from Brazil as one of its “case studies” but then exempt Brazilian beef from the tariffs.

The judges probed how much weight they could give statements from Trump and other officials when Greer had offered other, substantive reasons for the tariffs. “So what,” Judge Lisa Wang asked at one point. Shah replied that, at a minimum, the evidence bolstered their other claims for why the administration failed to present a robust record justifying the levies, even if it wasn’t grounds to strike them down.

Hamilton argued that it was reasonable for the trade office to present a single, comprehensive report explaining its justifications for the tariffs.

Although there were multiple lawsuits challenging the Section 301 tariffs, the court chose one filed by Learning Resources as the primary test case. The company makes educational toys and was a lead party in earlier fights over Trump’s tariff policies. Chief Executive Officer Rick Woldenberg attended Wednesday’s hearing and told Bloomberg afterwards that he was reluctant to predict any outcome but was glad the “issues are getting explored.”

“In thinking about like why are we doing this, money is part of it, but it’s only part of it,” Woldenberg said. “The part that I think is the scary part is the wrong idea that rule of law means whatever you want it to mean.”

The case is In re: Section 301 Forced Labor Cases, 26-cv-3555, US Court of International Trade (New York).