President Donald Trump is heading back to court this week as his latest tariff regime faces a fresh legal challenge, with small businesses and Democratic-led states arguing that the new levies are simply a rebranding of the emergency tariffs the Supreme Court already struck down.
The U.S. Court of International Trade in New York City is set to hear arguments Wednesday in a case that marks the third round of litigation against Trump's trade agenda. The plaintiffs, including family-owned toy company Learning Resources, say the administration's use of Section 301 of the Trade Act of 1974 is an unlawful attempt to circumvent the Supreme Court's February ruling that Trump could not impose broad tariffs under the International Emergency Economic Powers Act (IEEPA).
"Rinse and repeat, baby!" said Rick Woldenberg, CEO of Learning Resources, one of the lead plaintiffs. The company previously won a Supreme Court victory against the IEEPA tariffs, and now it is back, arguing that the Section 301 tariffs are substantively identical.
The Trump administration defends the new tariffs, which range from 10% to 12.5% on goods from 60 countries, as a legitimate response to unfair trade practices. Justice Department lawyers argue that Section 301 grants the U.S. Trade Representative broad discretion to impose tariffs and that the timing of the action is permissible.
"The relative proximity of the imposition of Section 301 tariffs with the expiration of Section 122 tariffs shows, at most, that the Trump Administration continues to maintain that tariffs are beneficial to the American economy," the DOJ wrote in court filings.
But challengers, including the Liberty Justice Center, a libertarian public-interest firm, contend that the new tariffs are indistinguishable from the IEEPA ones. "If it looks like an IEEPA tariff and it smells like an IEEPA tariff, it maybe is an IEEPA tariff," said Sara Albrecht, CEO of the Liberty Justice Center.
Alan Wm. Wolff, who helped draft Section 301 as a Treasury official in the Nixon administration, sided with the challengers. He said the law was designed to address bilateral trade disputes, not to impose sweeping, multi-country tariffs. "Our problems were bilateral, and no one in the whole drafting of the Trade Act of 1974 ever mentioned — I was in all of the meetings — and no one ever mentioned it being a broad tariff authority," Wolff said.
The case has drawn attention from Democratic-controlled states, which will join the small businesses in court. However, no major corporations have stepped forward to lead the challenge, a fact that Albrecht lamented. "Corporate America, where are you?" she said. "I always ask corporate America for help, support, amicus, anything — and not one larger company has stepped forward."
Woldenberg, a former lawyer, said he was not surprised by the lack of corporate involvement but stressed that the stakes remain high. "Now that it's the third time around, this seems to be garnering less attention," he said. "And the only reason that that concerns me is the issues are no less important."
The outcome of this case could have significant implications for Trump's trade policy, which has already faced legal challenges from other sectors. As the administration continues to push tariffs as a key economic tool, the courts will play a crucial role in defining the limits of presidential power in trade matters.
