U.S. trade court scrutinizes Trump’s forced labour tariffs

The U.S. Court of International Trade on Wednesday scrutinized the legal and factual underpinnings of U.S. President Donald Trump’s latest global tariffs, which were imposed on nearly all U.S. imports over allegations trading partners aren’t doing enough to stop forced labour.

A panel of three judges appointed by Presidents Trump, Barack Obama and Joe Biden heard arguments in Manhattan over lawsuits alleging that the latest tariffs are an attempt to revive the unchecked tariff power the Supreme Court struck down in February.

Four small businesses and 25 Democratic-led states argue that the tariffs, applied to imports from 60 trading partners including Canada, the EU and China, far exceed the president’s authority.

Pratik Shah, an attorney representing small businesses that sued over the tariffs, told the court that the Trump administration has misused a law that offers only a “carefully constrained” tariff authority.

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In its rush to impose new tariffs, the Trump administration skipped the legal requirements to make country-specific findings that each of the tariffs was justified, Shah said. Shah contrasted the tariffs with duties imposed under the same law during Trump’s first term, when the US Trade Representative produced country-by-country reports and imposed tariffs tailored to each economy.

“If you’re going to do it at breakneck speed and try to cover the entire globe, you still have to satisfy the statutory requirements,” Shah said.

Eric Hamilton, representing the U.S. Department of Justice, said the U.S. Trade Representative had thoroughly evaluated the prevalence of goods produced with forced labour in international commerce. The government did not need to show “with metaphysical certainty” that forced labour was a “burden” on US commerce before imposing tariffs, he said.

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The panel is expected to issue a written ruling in the coming weeks.

The plaintiffs asked the court to throw out the tariffs entirely. The court could also issue a more limited ruling that asks the government to re-do its investigation to provide more detail and justifications for the tariffs, as the court did with some of Trump’s tariffs in his first term.

0:50 U.S. hits dozens of countries, including Canada, with new 10% tariff

The judges interrupted attorneys for both sides soon after they began their arguments, peppering them with questions about the level of detail required in the government’s investigation into forced labour in other countries before deciding to apply tariffs.

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They asked Shah whether he was simply asking for “more paper” from the government, and they asked Hamilton whether the government was ignoring more detailed statutory requirements that dealt specifically with forced labour, rather than relying on broader authority about “unreasonable” trade practices.

Trump has made tariffs a central pillar of his foreign policy, using them as leverage to negotiate trade deals around the globe. But the Supreme Court ruled against most of Trump’s widest-ranging tariffs on February 20, finding that the president cannot use emergency economic powers to unilaterally impose tariffs on all US trading partners.

Trump responded by immediately imposing a temporary 10 per cent global tariff under a different U.S. law. When those temporary tariffs expired, he invoked another legal authority to impose in July the forced labour tariffs now being challenged, which range from 10 per cent to 12.5 per cent.

The plaintiffs’ lawsuits, consolidated before the court, argue the administration failed to satisfy the legal requirements for imposing the tariffs and is using concerns about forced labour as a pretext to revive a broad tariff authority that U.S. courts have repeatedly rejected.

The Trump administration argued in court papers that it had conducted real investigations into other nations’ failure to prevent imports of goods produced with forced labour, and concluded that tariffs were warranted for each of the 60 investigated trading partners.