US businesses have filed a lawsuit against the Trump administration just hours after tariffs of 10-12.5% on goods from about 60 countries went into effect, arguing that the administration exceeded its legal authority.
On July 26, 2569 at 21.00:XNUMX p.m., Bloomberg News reported that Just hours after President Donald Trump's new round of import tariffs went into effect on July 24, a lawsuit was immediately filed in court. U.S. businesses accuse the government of exceeding its authority under trade laws, negatively impacting domestic businesses and consumers.
These measures were implemented under Section 301 of the Trade Act of 1974, which imposes tariffs between 10 and 12.5% on imports from approximately 60 economies that the U.S. government deems to lack effective prohibitions or enforcement of laws against imports of goods produced using forced labor. These countries and economies are the primary sources of imports for the United States.
Lawsuit filed arguing misuse of Section 301.
Burlap & Barrel Inc., a spice importer in New York City, and Collective Horology LLC, a watch importer in California, have filed a lawsuit in the U.S. Court of International Trade in New York.
Both companies allege that the Trump administration used Section 301 to replace previous tax measures that had been rejected by the courts or had expired, which they consider an illegal abuse of power.
Previously, the U.S. Supreme Court ruled Trump's first set of global tariffs invalid, arguing that the emergency law cited by the government did not authorize the president to impose import tariffs. Subsequent tariffs, issued under Section 122, are still under litigation, even though those measures have already expired.
This case is being supported by the Liberty Justice Center, which previously filed a lawsuit against Trump's tax measures. The organization stated that while opposing forced labor is a legitimate goal, the government cannot disregard legal requirements to achieve it.
Three main reasons used to sue the government.
1. Exercising powers beyond those prescribed in Section 301.
Under Section 301 of the law, the U.S. Trade Representative (USTR) can only impose retaliatory trade measures if it can be proven that a trading partner is engaging in unfair or discriminatory policies that harm U.S. trade.
However, the plaintiffs argued that the government failed to present country-specific evidence of such behavior, and therefore could not apply tax measures to all countries.
They emphasized that Section 301 is a law designed to address specific trade issues, not to empower governments to impose unrestricted import tariffs worldwide.
2. Irrational measures.
The plaintiffs also argued that the measure violated the Administrative Procedure Act (APA), which stipulates that government agencies must not issue arbitrary policies or exercise power capriciously. The lawsuit states that the USTR did not adequately explain why different countries were subject to different levels of tariffs.
Furthermore, concluding merely that forced labor impacts global trade is not sufficient reason to impose tariffs on goods from an entire country without specific evidence that that country has harmed U.S. trade.
The USTR investigation report, released on June 2, did not specify which countries imported goods produced using forced labor, or directly produced goods using forced labor. It only considered whether those countries had laws prohibiting the import of such goods and whether those laws were being enforced.
3. It may violate the U.S. Constitution.
The final allegation states that if the government interprets Section 301 as broadly as claimed, this section of the law could violate the U.S. Constitution. The plaintiffs point out that the Constitution empowers Congress to levy taxes and determine international trade policy, and while Congress has previously delegated some authority to the executive through various laws, these have all been clearly defined in their scope.
The lawsuit cites the Nondelegation Doctrine, which stipulates that if Parliament delegates power to the executive, the scope of that power must be clearly defined; unlimited power cannot be granted.
The plaintiffs therefore argue that Section 301 is intended to address specific trade issues with trading partners, not to allow the administration to use it as a tool for collecting tariffs worldwide to push its own desired policies at its discretion.
refer : www.bloomberg.com
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