The Section 301 forced labour tariffs that President Trump directed the USTR to impose on 23 July 2026 are now facing their most serious legal test: a coalition of 25 US states filed suit on Monday, arguing the White House has dressed up its tariff ambitions in forced-labour clothing it does not fit.
The lawsuit lands in the US Court of International Trade. New York, California, Oregon, Michigan and 21 other states, all with Democratic attorneys general or governors, claim the administration’s decision was ‘arbitrary, capricious, and contrary to law.’ New York Governor Kathy Hochul was blunter still: ‘President Trump’s illegal tariffs are nothing more than a tax on hardworking families.’
White House spokesman Kush Desai pushed back, saying ‘the US is using its lawful authority’ to address practices that burden American businesses and that any country failing to curb the importation of goods produced with forced labour was acting ‘unreasonably.’
The Section 301 Forced Labour Tariffs: Scope and Legal Basis
The breadth of these measures is worth sitting with. The Office of the US Trade Representative (USTR) launched investigations on 12 March 2026, covering 60 economies for failing to prohibit and enforce a ban on importing goods made with forced labour. By 2 June 2026, the USTR had determined that all 60 were in breach and actionable under Section 301(b) of the 1974 Trade Act.
The resulting tariffs, which took effect at 12:01 a.m. Eastern Time on 24 July 2026, cover 99.4% of US imports, according to the USTR. The rate structure is binary: 10% for economies that have their own forced-labour import prohibition or have made qualifying commitments, and 12.5% for everyone else.
Six economies (Cambodia, Guatemala, Honduras, India, Sri Lanka, and Trinidad and Tobago) moved quickly enough after a June 2026 Federal Register notice to qualify for the lower rate by imposing prohibitions or undertaking commitments, according to the USTR’s final action document. The UK, the EU, China, Canada, Japan, Mexico and Brazil are all caught by the measures.
The Federal Register notice records that the USTR received over 1,600 written comments and heard testimony from over 100 witnesses before the tariffs were finalised. That is not nothing. The administration has done the procedural work. Whether the underlying legal theory holds is a different question.
Why the Legal Challenge Has Force
Section 301 authorises the USTR to impose duties economy-wide, regardless of whether a given product is actually connected to the practice under investigation. That is why a country’s entire export profile can be hit even if forced labour affects only one sector. It is also, the states argue, why the tariffs ‘defy the USTR’s own stated aims and make a mockery of the statute used to justify them.’
Alex Capri, a business lecturer at the National University of Singapore, told the BBC the lawsuit would pose a ‘formidable challenge’ to the levies and that there is a lack of credible evidence to back claims that countries have harmed US firms through forced-labour violations. He expects ‘carve outs and walk-backs to gradually take the bite out of these tariffs.’
My read is that Capri has it right on the evidence problem. The administration has cast its net over 99.4% of US imports. At that coverage rate, forced labour cannot plausibly be the operative criterion: it becomes indistinguishable from a general tariff dressed in statutory clothes.
For Chinese exporters, the exposure is compounded. The new Section 301 forced labour tariffs are fully additive on top of existing Section 301 China tariffs on Lists 1 through 4A, for goods not otherwise carved out under Section 232. The cumulative duty burden on Chinese goods is already severe; this adds another layer.
These tariffs also replaced a temporary 10% levy under Section 122 of the Trade Act, which had itself been introduced after a February 2026 Supreme Court ruling found Trump’s original 2025 tariffs under the International Emergency Economic Powers Act unconstitutional, as ASI Central has reported. The Section 122 tariffs expired on 24 July 2026, the same day the new measures came into force. The administration has been remarkably agile at finding new statutory hooks each time the courts remove the previous one.
Brazil and Japan have separately called the measures ‘unjustified.’ China’s foreign ministry called them ‘an excuse for political manipulation.’ Oregon Attorney General Dan Rayfield was direct: ‘We’re all paying the price for these unlawful tariffs, not foreign governments.’
The US is also investigating 16 trading partners over alleged manufacturing overcapacity in steel, automobiles, batteries, semiconductors, industrial machinery, chemicals, and solar, according to the USTR. If the Court of International Trade blocks these forced-labour tariffs, that overcapacity investigation is already waiting in the wings as the next vehicle. This administration does not run out of statutes; it runs out of courts.
