Trade Court Questions Legal Basis of Section 301 Forced-Labor Tariffs

On Sept. 30, a three-judge panel of the U.S. Court of International Trade in New York pressed the government over the legal basis and evidence behind the administration’s Section 301 forced-labor tariffs, which add 10% or 12.5% duties on goods from 60 trading partners. The court heard oral argument in In re: Section 301 Forced Labor Cases (No. 26-cv-3555) and did not say when it will rule.

Section 301 forced-labor tariffs: what is being challenged

The Office of the U.S. Trade Representative announced final action in July after investigations into 60 economies that, in its view, failed to impose and effectively enforce a ban on imports made with forced labor. Under the Federal Register notice, the extra duties apply to goods entered on or after 12:01 a.m. ET on July 24, 2026. USTR set a 10% rate for economies that have a forced-labor import ban, have committed to one in a reciprocal trade agreement or run a partial regime, and 12.5% for the rest. For certain goods from the EU, Japan, Korea, Taiwan and Switzerland, the rate is 10% or 12.5% net of the normal MFN duty. The notice also lists product exemptions, and USTR said it received more than 1,600 written comments on the proposal.

According to briefs cited by Transport Topics, the covered economies span 86 countries (the European Union counts as one) and supply 99.4% of U.S. imports. The court picked a suit by educational-toy maker Learning Resources as the lead test case among several filed by small businesses and Democratic state officials.

What the judges asked

Judge Timothy Reif pressed Eric Hamilton, the Justice Department’s lawyer, several times to name the provision of the trade law that U.S. Trade Representative Jamieson Greer relied on, after Hamilton said the government was not relying on either of the two sections that define “unreasonable” conduct by trading partners. Hamilton replied that Greer drew on a different provision granting him wide discretion. Judge Jennifer Choe-Groves said there was “not a lot of depth” in the evidence the administration offered for its findings that particular goods involved forced labor. The panel also questioned the challengers, including on how much weight to give public statements by the president and other officials. “So what,” Judge Lisa Wang asked at one point. Pratik Shah, arguing for the challengers, asked for a ruling on the legal questions rather than giving USTR a chance to supplement its record.

The case is the latest legal test of the administration’s tariff program. An earlier round of duties imposed under a different statute was struck down by the Supreme Court this year, and the Section 301 tariffs took effect in July, when a separate set of temporary duties expired.

What it means for shippers

Nothing changes at the border for now: the 10% or 12.5% duties still apply to covered entries, and importers should keep budgeting for them in landed cost. Because the timing and outcome of any ruling are unknown, keep entry summaries, duty payments and classification records organized by entry date so you can act quickly if refunds or changes become available. Our guide on how to calculate landed cost shows where these duties fit. They are separate from the China-specific duties covered in our Section 301 tariffs guide.