US Government Refunds $100 Billion in Tariffs as States Challenge New Duties

Court of International Trade to challenge a new round of tariffs imposed by Donald Trump. The duties, ranging from 10% to 12.5% depending on the country, target approximately 60 nations and the European Union for allegedly failing to eliminate forced labor from their supply chains, according to court documents cited by Agence France-Presse.

States Challenge Forced Labor Trade Surtaxes at International Trade Court

The new surtaxes took effect on July 24, following an investigation by the USTR. The administration justified the tariffs by pointing to the failure of these trading partners to keep forced-labor goods out of international supply chains. These measures directly replaced temporary 10% duties enacted in February after the Supreme Court struck down the majority of the administration’s tariffs decreed since his return to the White House.

To implement the new duties, USTR Jamieson Greer relied on a provision within a 1974 federal law previously used. While federal courts have historically permitted certain tariffs under this specific statute, the 25 plaintiff states argue that the latest investigation served merely as a legal pretext to revive the duties previously invalidated by the judiciary.

Legal Arguments Target Lack of Compliance Mechanisms and USTR Intent

The lawsuit points to a critical procedural flaw in the new tariff structure: the absence of a mechanism allowing penalized countries to lift the duties if they successfully end the practices flagged during the investigation. According to the complaint, this omission violates the underlying federal statute.

Furthermore, the plaintiffs argue that public statements made by Greer prior to the tariffs contradicted the administration’s official justification. The complaint notes that when the procedure was announced, “it was made no mention of forced labor.” Instead, the USTR allegedly stated that the investigation would ensure continuity with the earlier tariffs that courts later struck down.

“Rather than taking measures that could really combat forced labor, the USTR reached an inevitable conclusion in order to impose tariffs close to those that the courts have annulled twice,” Delaware Attorney General Kathy Jennings said in a public statement included in the filing.

Frequently Asked Questions

When did the new tariffs take effect?

The surtaxes of 10% or 12.5% officially entered into force on July 24, replacing temporary duties that had expired earlier in the year.

Which states are leading the lawsuit?

Court of International Trade.

What legal statute was used to justify the tariffs?

The USTR based the tariffs on a provision from a 1974 federal law, which the administration utilized following an investigation into supply chain practices.