People watch as the container ship Doris Ocean departs the Port of Los Angeles, in Los Angeles, on May 28, 2026.
Mario Tama Getty Images
President Donald Trump’s “independence day” tariffs around the world have been struck down in the courts, undermining the foundation of his trade plans. Some trade experts say his new ventures could meet the same fate – and have mounted their first legal challenge.
The Trump administration on Friday imposed broad tariffs on goods from more than 80 countries, saying they have failed to effectively prevent the use of forced labor practices.
The latest tariffs – which apply to trading partners comprising 99.4% of US trade – were brought under Section 301 of the Trade Act of 1974, which enables the government to levy tariffs on imports due to unfair trade practices.
Section 301 has been invoked numerous times throughout the presidential administration to threaten or impose tariffs — including against China during the first Trump administration. But Trump is “applying the law in a very different way,” Peter Harrell, a visiting scholar at the Georgetown University Law Center’s Institute of International Economic Law, told CNBC.
Section 301 was “not intended for the president to just rewrite the tax system” and freeze jobs “permanently”, Harrell said, adding that Trump’s latest use of it “could be litigated” in court.
Trump appears to see Section 301 as the primary means of additional taxes. On Friday, he announced that the US will “immediately initiate” a 301 investigation into the EU in retaliation for the huge fines it has imposed on tech companies. It was the latest action in a flurry of tariffs that Trump has taken in recent days, including slapping 25% duties on Brazilian goods – again through Section 301 – and vowing 50% tariffs on some goods from Canada.
The legal battle over the new taxes has already begun. Hours after it went into effect, two small businesses sued, saying the government is using Section 301 as a pretext to recreate the same global tax regime that was struck down by the Supreme Court five months earlier.
The new lawsuit, filed in the U.S. Court of International Trade, notes that Section 301 tariffs go into effect as another set of tariffs expires.
Those expired jobs, brought under Section 122 of the 1974 law, were announced by Trump a few hours after the Supreme Court struck down his land tariffs on February 20. Using the authority of Section 122, those tariffs had a fixed expiration date.
The high court ruled that the law Trump used to impose tariffs on almost every other country — the International Emergency Economic Powers Act, or IEEPA — did not authorize that action.
Friday’s lawsuit says Trump’s new tax rates, while intended to address labor enforcement practices, “are designed to maintain the same tax burden that this Court and the Supreme Court have held Congress did not authorize.”
Section 301 “is not an independent authority to impose tariffs on all imports from all trading partners at rates chosen to duplicate IEEPA’s invalid tariffs instead of eliminating identified foreign practices,” the suit said.
The Trump administration has emphasized that it is not just looking for ways to resurrect its “independence day.”
Addressing forced labor is “something that President Trump has focused on … for many years,” a senior administration official told reporters Thursday on a call about the tariffs.
Regarding the timing, the official said, “We are using this now to avoid difficulties.”
A spokesperson for the Office of the US Trade Representative did not immediately respond to CNBC’s request for comment on the case.
The new lawsuit was brought by the Liberty Justice Center, which represented the plaintiffs in the successful challenge to Trump’s implementation of the IEEPA.
The legal non-profit organization argues that the Trump administration “cannot maintain a fixed global tax policy by moving from one regulation to another.”
Other experts contacted by CNBC agreed.
“In my view, Section 301 tariffs are clearly illegal,” Kimberly Clausing, a professor of tax law at the UCLA School of Law and a senior fellow at the Peterson Institute for International Economics, said in an email.
The taxes reach beyond the law’s intent, Clausing said, saying the administration’s focus on enforcement is “just an excuse to reinvent the IEEPA program.” And “there is no evidence linking this type of trade action to what is supposed to be a policy” to end forced labor, he said.
“One can never be sure” how the courts will rule, Clauseing noted, adding that any legal challenges will take time to work their way through the legal system.
Alan Wolff, another senior executive at PIIE, wrote in a blog post on Thursday that the Supreme Court may overturn mandatory labor rates.
“For Section 301’s retaliation authority to be invoked, a country’s actions, policies, or practices must be found to burden US commerce,” Wolf wrote. “That requirement is clearly not satisfied in the 60 target countries, which account for nearly all US imports and 90 percent of world trade.”
Greta Peisch, former general counsel of the US Trade Attorney’s Office and a partner at Wiley Rein, was not convinced, telling CNBC that the Trump administration followed the legal procedures required to impose tariffs under Section 301.
The language of the law “gives a lot of power” to the state, he said. “I think it’s a very difficult level to contend with.”
Andrew Siciliano, head of global and US trade and culture at KPMG, told CNBC in an email that because of Section 301’s extensive record, the new rates “may be difficult to stop.”
“From a business perspective, this means that companies should plan for the prices that exist today rather than assuming that they will be quickly reversed or changed,” he said.
