Trump's New Trade Tariffs on Indonesia and Others Challenged, Face Cancellation

The administration of United States (US) President Donald Trump faced a lawsuit just hours after its latest import tariffs on more than 80 countries officially took effect. A number of trade law experts believe the tariffs, which began on Friday under Section 301 of the Trade Act of 1974, are likely to meet the same fate as the reciprocal tariffs previously struck down by the courts. Section 301 is one of the strongest trade legal instruments available to the US government, granting the Office of the United States Trade Representative (USTR) the authority to investigate and take action against countries deemed to be engaging in unfair trade practices or violating US trade rights. However, Peter Harrell, a visiting fellow at Georgetown University Law Center, assessed that the Trump administration’s use of Section 301 has exceeded the original purpose of its creation. “Section 301 was never intended to allow the president to permanently rewrite the entire tariff structure,” Harrell said, adding he believes the policy is “almost certain” to be struck down in court. Trump used Section 301 on the grounds that dozens of countries had failed to effectively eradicate forced labour practices. The new tariffs are divided into three tiers for trading partner countries: a 10% tariff (which includes Indonesia), a 10% or 12.5% tariff, and a 12.5% tariff. The US government also signalled it would open a similar investigation into the European Union (EU) in response to large fines imposed on several American technology companies. These tariffs came days after Trump imposed a 25% tariff on Brazilian imports and threatened to levy a 50% tariff on certain Canadian products. Shortly after the Trump tariff rule took effect over the weekend, two small companies reportedly filed a lawsuit with the US Court of International Trade. In the suit, the Trump administration is accused of using Section 301 as a pretext to revive a “global tariff regime” that had previously been struck down by a court ruling concerning the use of the International Emergency Economic Powers Act (IEEPA). According to the lawsuit documents, the new tariffs essentially maintain the “same tariff scheme as the previous policy”, only “wrapped in a forced labour eradication justification”. The plaintiffs argue that Section 301 does not grant the government the authority to impose tariffs on almost all imports from most trading partners merely to replace an IEEPA-based tariff regime that has been invalidated. The Trump administration has denied the allegations. A senior administration official said the issue of forced labour has long been a concern for the president. Liberty Justice Center, a nonprofit law firm, has also filed a lawsuit, arguing the government cannot maintain a global tariff policy simply by swapping the legal basis used. Kimberly Clausing, a tax law professor at UCLA and senior fellow at the Peterson Institute for International Economics (PIIE), shared a similar view, stating the forced labour eradication rationale is merely a pretext to revive previously cancelled tariffs. “In my view, the Section 301 tariffs are clearly unlawful,” she said. Another PIIE senior fellow, Alan Wolff, also predicted the Supreme Court could potentially strike down the policy. He noted that Section 301 requires evidence that a country’s policies or practices actually burden or restrict US commerce, a requirement that is difficult to prove against the roughly 60 countries targeted by the tariffs.