A coalition of 25 states sued the Trump administration on August 3, 2026, asking the U.S. Court of International Trade to block a new round of import tariffs tied to forced-labor investigations.
The case matters because the tariffs affect imports from dozens of major U.S. trading partners and could keep pressure on prices for retailers, manufacturers and households while the courts decide how far the White House can stretch trade law after earlier tariff defeats.
The administration says the measures are lawful Section 301 actions meant to push trading partners to stop goods made with forced labor from entering supply chains. The states say that explanation is a pretext for replacing sweeping tariffs that were struck down earlier in 2026.
What changed
The new lawsuit challenges tariffs of 10% and 12.5% on goods from 59 countries and the European Union. New York Attorney General Letitia James and Gov. Kathy Hochul said New York joined 24 other states in the case, including California, Michigan, Minnesota, New Jersey, North Carolina, Virginia and Washington, along with the governors of Kentucky and Pennsylvania.
The tariffs grew out of Section 301 investigations the U.S. Trade Representative opened in March 2026 into 60 economies. A July 23 White House memorandum directed USTR to impose 10% tariffs on certain economies and 12.5% tariffs on others, with exemptions for some products and planned tariff-rate quotas for selected textile and apparel imports.
USTR said in July that the investigations were aimed at economies that failed to impose or effectively enforce prohibitions on goods produced with forced labor. The Federal Register notice implementing the action said USTR had received more than 1,600 written comments and heard testimony from more than 100 witnesses.
Why the states object
The states argue that Section 301 gives USTR targeted authority to address unreasonable or discriminatory trade practices, not a shortcut for across-the-board tariffs. Their complaint says the administration did not connect the tariff rates closely enough to forced-labor conditions in each country, did not adequately address contrary testimony and imposed duties with too little connection to the stated goal.
They also point to timing. The challenged tariffs were announced as earlier temporary tariffs were expiring, after courts had already rejected broader tariff programs under other legal theories. The states are asking the trade court to declare the new tariffs unlawful and stop their enforcement.
What happens next
The case does not automatically erase the tariffs. Importers may still have to pay duties while the litigation proceeds unless the court issues relief. For consumers, that means any effect on prices will depend on how businesses absorb, pass through or preserve refund claims for the extra costs.
The legal fight also leaves companies with a practical choice: treat the duties as a real near-term cost while tracking the case closely. If the states win, the court could order relief or refunds. If the administration wins, Section 301 may become a sturdier path for broad trade pressure than the emergency-power tariffs that failed before.
The immediate question is whether the court sees the new duties as a valid forced-labor trade action or as a repackaged version of tariffs that exceeded presidential authority. That distinction will shape not only this case, but the next round of import-price risk for U.S. businesses and shoppers.
