A new wave of legal challenges has emerged after the United States imposed fresh Section 301 tariffs on imports from 60 economies, replacing an earlier tariff regime that had already been struck down by the courts.
At 12:01 a.m. Eastern on July 24, the temporary Section 122 import surcharge officially expired. At the same moment, new duties of 10% or 12.5% took effect under Section 301 of the Trade Act of 1974, covering economies that collectively account for approximately 99.4% of all U.S. imports by value.
On the same day, two lawsuits were filed with the U.S. Court of International Trade, arguing that the new tariffs represent a third attempt to preserve a global tariff framework that courts have already ruled unlawful. The legal filings follow previous decisions by the U.S. Supreme Court, which invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in February, and a Section 122 import surcharge that was struck down in May.
Importers reject forced labor but challenge the process
The companies leading the lawsuits emphasize that they are not defending products made with forced labor.
One of the plaintiffs, New York-based spice importer Burlap & Barrel, said it sources exclusively from suppliers that meet labor standards and pays smallholder farmers significantly above typical market rates.
Learning Resources, the family-owned educational toy manufacturer that successfully challenged the IEEPA tariffs before the U.S. Supreme Court, stated in its complaint that the plaintiffs “in no way, shape, or form condone reliance on forced labor or forced-labor imports,” arguing instead that the dispute centers on whether the government followed the legal process required by Congress.
New tariff structure covers nearly all imports
Under the new rules, imports from 17 economies—including Canada, Mexico, India, Indonesia, Bangladesh and the United Kingdom—are subject to a 10% tariff because they either maintain forced labor import prohibitions, have committed to implementing them through reciprocal trade agreements or operate under partial compliance systems.
Imports from all remaining covered economies are subject to a 12.5% tariff.
The European Union, Taiwan, Japan, South Korea and Switzerland follow a different calculation. Their products pay whichever is higher: the existing most-favored-nation tariff or the new Section 301 duty, meaning products already subject to equivalent or higher tariffs will not face additional charges.
The new duties do not replace existing trade measures. Importers must continue paying normal customs duties, anti-dumping and countervailing duties, along with any existing Section 301 tariffs. As a result, imports from countries such as China and Brazil may now face multiple layers of tariffs.
Certain products remain exempt, including goods covered by Section 232 tariffs such as steel, aluminum, copper, automobiles, auto parts and timber. USMCA-compliant imports from Canada and Mexico are also excluded, along with qualifying CAFTA-DR textile products.
The regulations span more than 430 pages, with the majority dedicated to detailed product exclusion lists.
The rules also eliminate a key advantage previously available through foreign-trade zones. Covered goods entering these zones must now receive privileged foreign status, locking in tariff liability at the time of admission rather than when the products enter U.S. commerce.
A four-day grace period was granted for shipments already in transit before July 24, provided they entered the United States by July 28.
Lawsuits question USTR’s legal authority
The legal challenges argue that the Office of the United States Trade Representative (USTR) exceeded its statutory authority.
Under Section 301, USTR must identify specific unfair trade practices by individual countries before imposing trade measures designed to eliminate those practices.
The lawsuits contend that USTR failed to conduct the required country-by-country analysis before applying tariffs across 60 economies.
According to the complaints, USTR completed investigations in just 133 days after launching them on March 12, compared with the more than seven months spent investigating China before imposing Section 301 tariffs in 2018.
The plaintiffs also argue that a single public comment period and one three-day hearing were insufficient to evaluate dozens of separate trading partners.
Learning Resources summarized its position by stating, “The third time’s not the charm.”
Burlap & Barrel further alleges that tariff rates were determined before country-specific findings were completed, claiming the government designed the new rates to closely mirror the previously invalidated IEEPA tariffs.
Both lawsuits also argue that if Section 301 allows such broad action, it would amount to an unconstitutional delegation of Congress’s authority to impose taxes.
Critics question the economic justification
Ed Gresser, vice president of the Progressive Policy Institute and a former assistant USTR for trade policy and economics, argued during the public comment process that the evidence supporting the action is insufficient.
He estimated the new tariffs could cost American importers roughly $100 billion annually, while noting that U.S. Customs and Border Protection has blocked only about $800 million worth of imports annually over the past three fiscal years over suspected forced labor concerns.
According to Gresser, the government did not present evidence showing significant volumes of forced-labor products entering U.S. supply chains.
Government argues the tariffs are justified
USTR maintains that it followed an extensive review process, including two rounds of hearings, more than 2,100 public comments and consultations with over 45 governments.
Officials also point to policy changes that occurred after the proposed tariffs were announced. Between the June proposal and the final decision, four economies introduced forced labor import prohibitions while another signed a reciprocal trade agreement. As a result, all five received the lower 10% tariff instead of 12.5%.
The agency also structured the regulations so that each country’s tariff operates independently. This means a successful legal challenge involving one economy would not automatically invalidate tariffs imposed on the others.
Importers continue paying while litigation proceeds
Despite the legal challenges, importers remain responsible for paying the duties while the courts consider the cases.
Burlap & Barrel said it currently has five shipments arriving through the ports of New York/New Jersey and Baltimore, valued at approximately $124,407, with expected tariff costs of nearly $13,888.
The company argues it previously absorbed earlier tariff increases but says the new duties are no longer financially sustainable.
Its proposed class-action lawsuit seeks to represent thousands of importers that have paid or will pay Section 301 duties on goods entered on or after July 24. The plaintiffs are requesting refunds with interest and an injunction preventing further tariff collection, although no class has yet been certified and no court has ruled on the merits of the case.
Trade attorney Barry Appleton also argued during the consultation process that existing trade agreements already contain formal dispute settlement mechanisms capable of resolving forced labor concerns without imposing broad tariffs.
For now, however, the new Section 301 duties remain in force. As the legal battle unfolds, importers across the United States must continue paying the additional 10% and 12.5% tariffs, adding new costs to global supply chains while the courts determine whether the government acted within its legal authority.
