U.S. President Donald Trump listens to questions from reporters in the Oval Office of the White House on September 28, 2026 in Washington, DC.
Kevin Dietch | Getty Images
President Donald Trump’s near-universal tariff policy is once again being challenged in federal court.
A three-judge panel at the U.S. Court of International Trade in Manhattan is hearing arguments Wednesday morning from a group of small businesses and Democratic-led states that say President Trump’s sweeping Section 301 tariffs violate the law.
This is the third time in less than two years that courts have been asked to intervene in a president’s attempt to impose steep tariffs on most U.S. imports.
In February, the Supreme Court struck down “reciprocal” tariffs announced by President Trump in April 2025, undermining huge chunks of trade policy and forcing the Trump administration to repay more than $100 billion.
On the same day the ruling was handed down, President Trump announced a 10% tariff worldwide under another law known as Section 122 of the Trade Act of 1974. That agency allowed the tariffs to continue for only 150 days, during which time the Federal Trade Court ruled against them. The Court of Appeal suspended the judgment and allowed it to remain in effect for the duration of the judgment.
Shortly after those tariffs expired in July, the Trump administration imposed new tariffs under the same Section 301 of the Trade Act of 1974.
Tariff 301 imposes a 10% or 12.5% tax rate on goods from 86 countries, and applies to 99.4% of U.S. imports. The administration said it was imposed in response to targeted countries’ failure to effectively enforce trade bans on goods produced using forced labor practices.
A legal challenge being heard Wednesday morning claims the administration invoked the forced labor argument as a pretext to reimpose previously lifted tariffs around the world.
“In short, defendants are now attempting to re-create substantially the same global customs system under three different statutes,” the plaintiffs said in a lawsuit filed with the court in August, which consolidates multiple legal challenges. “But there’s a reason they didn’t start with Section 301 and are now turning to it only as a last resort.”
Justice Department lawyers maintain that the U.S. Trade Representative was in full compliance with the law.
“The actions taken by the USTR at the President’s direction in this case are consistent with the letter, intent, and purpose of Section 301, and with the President’s firm commitment to creating a level playing field for American workers, producers, and exporters by conditioning access to U.S. markets on specific actions prohibiting international trade in forced labor materials,” they wrote in court in early September.
President Trump told Fox News in late July that the 301 tariffs were “doing the same thing” as the tariffs that the Supreme Court struck down.
Sarah Albrecht, president and CEO of the nonprofit Liberty Justice Center, which filed one of the lawsuits against the new tariffs, told CNBC at the time that Trump’s comments strengthened their case.
