25 States Sue Trump Administration Over New Tariffs

25 Democratic-led US states sued the Trump administration over new Section 301 tariffs of 10-12.5% on 60 economies, arguing USTR used forced-labor enforcement as pretext to revive tariff schemes already struck down under IEEPA and Section 122. The lawsuit highlights Mexico's case specifically, noting the country has a fully implemented USMCA-based forced-labor import ban yet received identical treatment to weaker-enforcement economies. The case returns to the US Court of International Trade, which previously invalidated two prior tariff mechanisms, potentially marking a third consecutive legal defeat for the administration's tariff strategy.

A coalition of 25 Democratic-led US states filed suit against the Trump administration over its latest round of global tariffs, arguing the White House once again exceeded its legal authority after courts had already struck down two previous attempts to impose sweeping duties. 

The lawsuit, filed with the US Court of International Trade, challenges tariffs of 10% to 12.5% imposed under Section 301 of the Trade Act of 1974 on imports from roughly 60 economies, arguing the US Trade Representative used forced-labor enforcement as a pretext to revive essentially the same tariff scheme courts had already invalidated under the International Emergency Economic Powers Act (IEEPA) and, later, under Section 122 of the Trade Act.

California, New York, Illinois, Washington, Michigan, Massachusetts, Arizona, Colorado, New Jersey and Wisconsin are among the plaintiff states, joined by the governors of Kentucky and Pennsylvania. The suit names President Trump, US Trade Representative Jamieson Greer, the USTR and US Customs and Border Protection as defendants, and calls the July 23 tariff action "arbitrary, capricious and contrary to law," arguing USTR never established a genuine link between the duties and their stated goal of combating forced-labor-made goods.

Mexico's Inclusion is Central to the States' Argument

The lawsuit leans heavily on Mexico's case to illustrate what it calls the policy's inconsistency. According to the complaint, Mexico already has a fully implemented ban on forced-labor-linked imports stemming from the USMCA, reinforced in 2025 through new investigation and coordination protocols with the United States, yet received the same tariff treatment as economies with far weaker enforcement capacity. 

That framing tracks closely with what Mexico Business News has reported since USTR's investigation began in March: Mexico was grouped with Canada, the European Union, Ecuador, Indonesia and Pakistan as countries with forced-labor import bans "on the books" but deemed insufficiently enforced, earning the lower 10% rate versus 12.5% for 46 other economies. Mexican officials have maintained that the tariff, in practice, simply replaces the 10% Section 122 surcharge Mexico had faced since April, leaving actual duty exposure largely unchanged for exporters.

The tariffs took effect this month after months of procedural back-and-forth. USTR first proposed the 10% rate on Mexican imports on June 2, prompting Mexico's government to formally contest the measure. 

By early July, Mexico joined Peru, Guatemala and Ecuador at USTR public hearings to jointly request exemptions, arguing the duty was never designed with USMCA partners in mind. Those exemption requests were ultimately unsuccessful: USTR finalized determinations across all 60 economies in late July, timed to replace the expiring Section 122 surcharge, as Mexico Business News noted ahead of the rollout. Roughly 85% of Mexican exports remain shielded from the new duty under USMCA rules of origin, leaving non-compliant manufacturers and cross-border suppliers as the primary exposed group.

States Say the Investigation Moved Too Fast to Be Credible

Beyond Mexico's specific treatment, the states' lawsuit questions the speed and rigor of USTR's process broadly. Section 301 permits only "appropriate and feasible" actions targeting a specific unfair trade practice by another country, the complaint argues, yet the administration used that authority to build a blanket global tariff policy that offers no clear path for affected countries to remove the duties through improved forced-labor enforcement. 

As evidence, the states cite public statements from Trump and Greer, made before the Section 122 surcharge lapsed, signaling intent to use expedited Section 301 investigations specifically to replace those expiring tariffs, a sequencing trade analysts had already flagged as the administration reconstituting its legal basis for duties after repeated court losses.

The states note that prior Section 301 investigations targeting single countries like China or Brazil took eight months to a year to complete, while this review of 60 economies concluded in roughly two and a half months. They also argue USTR failed to explain why it applied nearly uniform tariff rates to countries with vastly different regulatory frameworks, development levels and enforcement capacity, or how the duties would meaningfully reduce forced labor in global supply chains. 

The complaint further alleges that businesses, foreign governments and specialized organizations warned during the public comment period that the tariffs would fail to curb forced labor while raising costs for US importers and consumers, objections the states say USTR dismissed without substantive response.

What's Next

The case now moves to the US Court of International Trade, the same venue that previously ruled against the administration's IEEPA and Section 122 tariff actions. A ruling against the administration would mark a third consecutive legal setback for the White House's tariff strategy, though it remains unclear whether the court will act before the current duties, including those affecting Mexican exporters outside USMCA coverage, remain in force through ongoing litigation.