Trump's latest global tariffs face trade court challenge

On September 30, the US Court of International Trade examined the legal and factual basis of President Donald Trump's recent global tariffs, which targeted nearly all US imports. The panel of three judges, appointed by Presidents Trump, Barack Obama, and Joe Biden, heard arguments in Manhattan regarding lawsuits claiming that the tariffs are an attempt to reinstate unchecked tariff power previously deemed unconstitutional by the Supreme Court.

Four small businesses and 25 Democratic-led states argued that the tariffs, imposed on imports from 60 trading partners including the EU and China, exceed the president's authority.

Pratik Shah, an attorney representing the plaintiffs, argued that the Trump administration misused a law that provides limited tariff authority. He contended that the administration skipped the necessary country-specific findings for each tariff, justifying the tariffs. In contrast, Eric Hamilton, representing the US Department of Justice, stated that the US Trade Representative had meticulously assessed the presence of forced labor in international commerce and that the government did not need to prove with absolute certainty that forced labor was a burden on US commerce to justify the tariffs.

The court is anticipated to deliver a written ruling in the coming weeks. Plaintiffs sought to have the tariffs entirely dismissed, while the court might issue a more limited ruling, mandating the government to redo its investigation to provide more details and justifications for the tariffs, similar to what occurred with some of Trump's tariffs during his first term.

The judges questioned both sides about the level of detail required in the government's investigation into forced labor globally before applying tariffs. They questioned whether Shah merely sought more paperwork from the government and whether the government ignored more specific statutory requirements concerning forced labor, instead relying on a broader authority on unreasonable trade practices.

Trump's foreign policy has heavily relied on tariffs as leverage in trade negotiations. However, the Supreme Court ruled against a majority of Trump's most expansive tariffs on February 20, concluding that the president cannot unilaterally impose tariffs on all US trading partners using emergency economic powers. In response, Trump swiftly imposed a temporary 10% global tariff under a different law.

When those temporary tariffs expired, he utilized another legal authority to impose the forced labor tariffs now being contested, ranging from 10% to 12.5%. The plaintiffs' lawsuits, consolidated before the court, argued that the administration did not meet the legal requirements for imposing the tariffs and was exploiting concerns about forced labor to resurrect a broad tariff authority that US courts have rejected multiple times.

The Trump administration contended in court filings that it had conducted genuine investigations into nations' failure to prevent imports of goods produced with forced labor and concluded that tariffs were warranted for each of the 60 investigated trading partners.