Trump's Forced-Labor Tariffs Will Probably Lose in Court and Survive Anyway

Since July 24, nearly every product entering the United States has carried an extra 10 or 12.5 percent duty because, in the government's telling, 60 economies supplying 99.4 percent of U.S. imports⁶ have failed to ban goods made with forced labor from their own markets. On Monday, 25 states sued¹ at the Court of International Trade, the specialized federal court that hears tariff disputes, arguing the forced-labor rationale is a costume draped over the same global tariff wall the Supreme Court demolished in February.

The chronology explains the suspicion. On February 20, the Court ruled 6-3 in Learning Resources v. Trump³ that the International Emergency Economic Powers Act, the 1977 sanctions statute Trump had used for his global "reciprocal" tariffs, does not authorize tariffs at all⁴. The administration pivoted to a temporary 10 percent surcharge under Section 122 of the Trade Act, a balance-of-payments authority capped at 150 days. Meanwhile, on March 12, the U.S. Trade Representative opened investigations into 60 economies' forced-labor enforcement under Section 301 of the same Trade Act, found all 60 actionable on June 2⁵, and issued its final action on July 23. The new tariffs took effect at 12:01 a.m. on July 24, the exact moment the Section 122 surcharge expired⁵. There was no gap. There was not even a rounding error of a gap.

Having read the complaint, the statute, and the government's own record, I think the states are half right, and the half they are right about is not the half in their press releases. Their marquee claim, that the Supreme Court already declared these tariffs illegal, fails as a matter of law. Their quieter claim, that this particular administrative record cannot survive review under the Administrative Procedure Act, is strong, and I expect it to prevail at the trade court. Whether prevailing actually stops the tariffs is a separate and less comfortable question.

Start with why February's ruling doesn't control. Learning Resources turned on statutory text: IEEPA lets the president "regulate" imports, and the Court held that word could not carry the separate power to tax them. Section 301 has no such gap. It expressly authorizes USTR to "impose duties"⁸ on a foreign country's goods after finding that its acts, policies, or practices are unreasonable and burden U.S. commerce. The Federal Circuit's September 2025 decision in HMTX Industries v. United States¹⁵ upheld sweeping Section 301 duties on hundreds of billions of dollars of Chinese goods. When the White House calls Section 301 "a legally durable tool"², it is not bluffing about the statute. The states cannot win by pointing at February and shouting "same tariffs."

But a statute that authorizes duties in principle still demands findings that hold up, and this is where the record starts to disintegrate. State attorneys general noted in comments to USTR¹² that a single-country Section 301 investigation typically runs a year or more; this one processed 60 economies in about ten weeks and found every single one deficient, sorting them into just two tariff tiers. Fifty-four economies got 12.5 percent; six that have forced-labor bans but allegedly under-enforce them¹⁰, including Canada, Mexico, and the European Union, got 10 percent. A remedy supposedly calibrated to sixty distinct legal systems produced a 2.5-point spread.

The government has an answer to the uniformity charge, and it deserves a fair hearing. Ambassador Jamieson Greer, the U.S. Trade Representative, argues that America is "the only country in the world" that adopts and enforces such a ban¹⁴, so finding all 60 economies deficient is not evidence of a sham; it is simply true. Forced labor in supply chains is a genuine, documented problem. The U.S. already polices it under Section 307 of the Tariff Act of 1930, which bans imports made with forced labor, enforced by Customs through Withhold Release Orders, shipment-level detentions issued when evidence reasonably ties specific goods to forced labor⁹. And procedurally, USTR ran a real process: over 1,600 written comments and three days of hearings with more than 100 witnesses⁷.

Here is why that defense ultimately fails on this record. Arbitrary-and-capricious review asks whether the agency drew a rational connection between its findings and its remedy, and the connections in this action run backward. USTR's own report cited frozen beef from Brazil as one of only three concrete examples of forced-labor goods, then exempted frozen beef from the tariffs². The states' complaint¹¹ alleges the exemption annexes are identical to the annexes of the expired Section 122 proclamation, which is what you would produce if you started from the old tariff wall and worked backward to a justification. The exemptions track domestic supply needs and economic disruption, not forced-labor risk. And Greer told the Senate Finance Committee two days before the final action that "the specific authorities this Administration is using have changed, but the trade strategy has not"¹³. Courts are reluctant to probe executive motive, but they do not need to here; the mismatch between the stated rationale and the action's actual architecture is visible on the face of the record. A Congressional Research Service analysis¹⁸ adds that covering 99 percent of imports in one stroke raises the same major-questions concerns that sank the IEEPA tariffs, since no prior Section 301 action ever attempted anything beyond a single country.

Standing will not save the government. The states buy imported goods directly, and twelve states litigated the IEEPA tariffs through the Supreme Court on the merits⁴ without their right to sue ever being rejected.

So the states should win. The catch is what winning looks like, and HMTX is the sobering precedent. In that litigation, the trade court found USTR had violated the APA¹⁶ by failing to adequately respond to comments, but it remanded without vacating, meaning the tariffs kept collecting while USTR wrote a fuller explanation. The agency did, the court accepted it, and the Federal Circuit affirmed the tariffs in full¹⁷. Seven years after imposition, importers had a merits victory on paper and duties in force in fact. The administration is plainly counting on that playbook. The states' best counter is that HMTX's defect was procedural and curable by better prose, while the defects here are substantive: no better explanation can reconcile exempting your own star example of forced-labor goods, or annexes photocopied from a tariff program built on an entirely different rationale.

That is why the ruling to watch is not liability but remedy. If the Court of International Trade vacates the action, February repeats itself and the tariff wall comes down again, at least until the next statute is tried. If it remands without vacatur, the administration will have learned the most valuable lesson of this entire litigation cycle: that a tariff regime can lose in court indefinitely, so long as it never has to stop collecting while it loses.