Federal trade court examines legality of Trump's global forced labor tariffs
The U.S. Court of International Trade heard arguments Wednesday challenging the legal foundation of President Donald Trump's sweeping tariffs on imports from 60 trading partners, including the European Union and China, imposed over allegations that these nations fail to adequately combat forced labor in their supply chains.
The specialized federal court, established in 1980 with exclusive jurisdiction over international trade matters, convened a three-judge panel in Manhattan to examine lawsuits filed by four small businesses and 25 Democratic-led states. The challengers contend the tariffs represent an attempt to resurrect broad presidential tariff powers that the Supreme Court struck down in February.
The forced labor tariffs, which took effect at 12:01 a.m. on July 24, cover approximately 99.4 percent of U.S. imports across 86 countries. The 60 economies include the 27-member European Union, counted as a single trading partner. Tariff rates range from 10 to 12.5 percent, though wide-ranging exemptions apply to products already subject to other tariffs, certain agricultural goods, manufacturing inputs, and imports under the U.S.-Mexico-Canada Agreement.
Legal Arguments and Procedural Concerns
Pratik Shah, representing the small business plaintiffs, argued the Trump administration misused Section 301 of the Trade Act of 1974, which offers only "carefully constrained" tariff authority. He criticized the administration for failing to produce country-specific findings justifying each tariff, contrasting the current approach with Trump's first-term China tariffs, when the U.S. Trade Representative issued detailed reports for each affected economy.
"If you're going to do it at breakneck speed and try to cover the entire globe, you still have to satisfy the statutory requirements," Shah told the court.
The legal challenge comes months after the Supreme Court ruled 6-3 on February 20 that the International Emergency Economic Powers Act does not authorize presidential tariff authority. Chief Justice John Roberts authored the opinion, joined by Justices Amy Coney Barrett and Neil Gorsuch—both conservative appointees—along with the court's three liberal justices. That decision forced the administration to refund more than $160 billion in tariffs collected under what had been termed "Liberation Day" tariffs.
Following the Supreme Court setback, Trump imposed temporary 10 percent global tariffs under different legal authority. When those expired in July, the administration seamlessly transitioned to the forced labor tariffs now under challenge, announced July 23 and implemented precisely as the temporary measures lapsed.
Government's Defense
Eric Hamilton, arguing for the Justice Department, defended the administration's investigation as thorough, asserting the U.S. Trade Representative properly evaluated the prevalence of forced-labor-produced goods in international commerce. The government did not need to demonstrate "with metaphysical certainty" that forced labor burdened U.S. commerce before acting, Hamilton said.
The administration's legal strategy relies on Section 301, which specifically identifies "a persistent pattern of conduct that permits any form of forced or compulsory labor" as an unreasonable trade practice warranting tariffs. During Trump's first term, Section 301 served as the foundation for substantial China tariffs that survived court challenges, establishing precedent for the statute's legal durability.
However, Section 301 requires the Trade Representative to conduct investigations including consultations with foreign governments, opportunities for public comment and hearings, and findings that foreign practices are both unreasonable and burden U.S. commerce—procedural steps plaintiffs argue were inadequately followed.
Judicial Scrutiny
The judges interrupted both sides with pointed questions about the level of detail required in government investigations before imposing tariffs. They asked Shah whether he simply wanted "more paper" from the government, while questioning Hamilton about whether the administration ignored more specific statutory requirements addressing forced labor in favor of broader authority over unreasonable trade practices.
U.S. Trade Representative Jamieson Greer has framed the tariffs as necessary pressure on trading partners.
"The United States has had a forced labor import ban for nearly a century, and rigorously enforces it. It's well past time for our trading partners to do the same."
What's Next
The panel is expected to issue a written ruling in coming weeks. Plaintiffs have requested the court invalidate the tariffs entirely, though the court could issue a narrower decision requiring the government to conduct more detailed investigations—an approach the tribunal has taken with previous Trump-era tariffs.
Trump has positioned tariffs as central to his foreign policy, using them as leverage in trade negotiations worldwide. The legal battles over tariff authority have created uncertainty for importers and raised questions about the constitutional balance between executive power and congressional oversight of international commerce.
