A coalition of 25 states filed suit against the Trump administration on August 3, 2026, challenging the new Section 301 forced-labor tariffs imposed on imports from 60 trading partners.
The lawsuit, filed in the U.S. Court of International Trade (CIT), argues that the administration exceeded its authority under Section 301 of the Trade Act of 1974. The challenge comes less than two weeks after the Office of the U.S. Trade Representative (USTR) finalized additional tariffs of 10% or 12.5% on imports from the affected economies, subject to certain product exemptions.
For importers, the most important point is that the lawsuit does not currently change duty liability. The tariffs remain in effect while the litigation proceeds.
What the States Are Arguing
The states argue that the forced-labor tariffs are an attempt to replace the global tariffs previously struck down under the International Emergency Economic Powers Act (IEEPA), this time using Section 301 as the legal authority.
They also challenge the process USTR used to establish the tariffs. USTR initiated investigations into 60 economies in March 2026 to examine whether their failure to prohibit imports made with forced labor burdened or restricted U.S. commerce.
The states contend that the investigations were conducted too quickly and did not adequately connect the practices identified in individual countries with the tariff rates ultimately imposed.
The Section 301 Tariffs at Issue
USTR finalized the forced-labor tariff action on July 23, imposing additional duties of 10% or 12.5% on imports from 60 trading partners, subject to certain product exemptions.
According to USTR, the action is intended to address countries that fail to impose and effectively enforce prohibitions on imports produced with forced labor.
The tariffs represent one of the administration’s most significant uses of Section 301 beyond its traditional application to specific trade practices or individual trading partners.
What the States Are Seeking
The coalition is asking the Court of International Trade to:
- Declare the Section 301 forced-labor tariffs unlawful.
- Halt further collection of the challenged tariffs.
- Provide for refunds of duties already collected under the program.
The lawsuit joins a separate challenge brought by small businesses, putting the new forced-labor tariff program under scrutiny from multiple plaintiffs.
What Importers Should Do Now
For now, importers should continue treating the Section 301 forced-labor tariffs as applicable where required. No court order has suspended their collection.
Importers should also consider:
- Tracking duties paid: Maintain detailed records identifying entries subject to the new Section 301 duties.
- Preserving entry documentation: Accurate entry and liquidation records could become important if the litigation ultimately results in a refund process or other relief.
- Monitoring the case: Early rulings on requests for preliminary relief, as well as the government’s response, could provide insight into how the CIT will approach the challenge.
- Reviewing exposure: Importers sourcing from the 60 affected economies should understand where the additional 10% or 12.5% duties are affecting landed costs and sourcing decisions.
With several major tariff programs now facing litigation, importers should continue monitoring both court developments and CBP implementation guidance rather than assuming that a legal challenge immediately changes duty obligations.
Wondering How This Litigation Could Affect Your Duty Exposure?
ASK Alba™: Alba’s trade compliance team can help importers understand their Section 301 exposure, track developments in the litigation, and prepare for potential changes.
References
USTR: Forced Labor Section 301 Investigations
Time: These 25 U.S. States Are Suing the Trump Administration Over Tariffs
