US Democratic States Sue Trump: Section 301 Tariffs on 60 Countries Challenged

New York, August 4, 2026 — A group of 25 Democratic-led US states sued Donald Trump's administration on Monday, arguing that the president's latest round of tariffs on goods from 60 trading partners — including Bangladesh — exceeds his legal authority to tax imports, in the latest legal escalation of the administration's sprawling trade war.

The states' lawsuit, filed in the US Court of International Trade in New York, follows previous challenges by small US businesses, which sued to block the tariffs on the day they went into effect last month. States and small businesses have successfully challenged previous global tariffs imposed by Trump in his second term, but the president has continued to pursue new tariffs despite a series of legal setbacks.

📜 The Tariffs Under Challenge

The Trump administration imposed new tariffs on July 24 of 10 percent and 12.5 percent on 60 trading partners, including the European Union, over allegations they were not doing enough to stop the export of goods produced with forced labor. The tariffs went into effect just as a previous 10 percent global tariff expired — a sequencing that critics argue reveals the tariffs as a continuous trade barrier rather than a series of discrete policy responses.

• 📋 Tariffs imposed: July 24, 2026
• 🌏 Coverage: 60 trading partners
• 💰 Rates: 10% and 12.5%
• 📊 Affected imports: Over 99% of total US imports
• 🌺 Stated justification: Forced labor enforcement
• 🇧🇩 Bangladesh angle: 10% forced labor duty on RMG exports

🏛️ The States Behind the Lawsuit

The states that sued, including Oregon and New York, all have Democratic attorneys general or governors. The coalition of 25 states represents roughly half of all US states and a significant share of the US economy — giving the legal challenge both political weight and economic standing to challenge federal tariff policy.

"Despite losing every step of the way, Trump is trying yet again to inflict more chaos on working families and homegrown Oregon businesses," Oregon Attorney General Dan Rayfield said in a statement. The framing positions the lawsuit not just as a legal challenge to presidential authority, but as a defence of US businesses and consumers who bear the cost of tariffs through higher import prices.

💬 White House Response

White House spokesman Kush Desai defended the tariffs as an appropriate and legal response to unfair trade practices in other nations. "A foreign country's failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens US commerce, including American workers, and must be addressed," Desai said.

The administration's defence rests on the argument that the forced labor justification is genuine and substantive — not merely a pretext for re-imposing tariffs that courts had previously struck down. Whether US courts accept that framing will determine the legal viability of the July 24 tariff round and any future tariff actions the Trump administration may pursue.

⚖️ Legal Background: IEEPA Defeat and Section 301 Pivot

Trump has made tariffs a central pillar of his foreign policy, even after a stinging defeat in the US Supreme Court. The court ruled against most of Trump's widest-ranging tariffs on February 20, finding that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to unilaterally impose tariffs on trading partners.

Trump responded to that ruling by escalating his trade war, calling Supreme Court justices "disloyal" and issuing new temporary 10 percent tariffs under a different legal authority that, like IEEPA, no president had previously used to impose tariffs. Those tariffs were also ruled illegal by the US Court of International Trade, but they remained in effect while the Trump administration appealed — a pattern of legal defeat followed by policy continuation that has defined the administration's tariff strategy.

📋 Section 301: The New Legal Basis

The latest round of global tariffs was imposed under Section 301 of the Trade Act of 1974, which is meant to combat unfair or discriminatory economic practices by other nations. Unlike IEEPA or the temporary global tariff authority, Section 301 has been used by past presidents — most notably by the first Trump administration in 2018 to impose tariffs on Chinese goods.

But the states and small businesses said in their lawsuits that Section 301 tariffs have historically been targeted to address specific nations and industries, and Trump's broad-brush approach has no historical precedent. The legal question is whether Section 301 can be used to impose tariffs on 60 countries simultaneously based on a generic forced labor justification — or whether the statute requires country-by-country evidence of specific unfair practices.

• ⚖️ Statute: Section 301, Trade Act of 1974
• 📜 Previous use: Trump 2018 China tariffs (targeted, country-specific)
• ⚠️ Current use: 60 countries simultaneously (unprecedented breadth)
• 🧪 Legal question: Can Section 301 support broad-brush tariffs without country-specific evidence?

🚢 Forced Labor as Pretext?

The states' complaint, like two previous lawsuits filed by small businesses over the tariffs, also argued that the new tariffs used "forced labor" as a pretext to re-impose the tariffs that had already been ruled illegal in court. They said that a sweeping tax on imports would do nothing to address the real problems of forced labor around the world.

This argument goes to the heart of the administration's legal vulnerability. If courts determine that the forced labor justification is genuinely substantive — backed by country-specific evidence and a credible enforcement framework — the tariffs are more likely to survive. If courts find that forced labor is being used as a legal fig leaf for tariffs the administration had previously attempted under different legal authorities, the Section 301 basis will likely be struck down as well.

🌏 Implications for Bangladesh

For Bangladesh, the lawsuit has direct and immediate relevance. The 10 percent forced labor duty on Bangladeshi RMG exports is part of the same July 24 tariff round now being challenged in court. If the lawsuit succeeds and the tariffs are struck down, Bangladeshi apparel exporters would see a meaningful reduction in their US tariff burden — though any relief would come only after a lengthy legal process that could extend well into 2027.

The Bangladesh garment sector has been grappling with the dual impact of the 10 percent forced labor duty and a separate 19 percent reciprocal tariff imposed earlier in 2026. Combined, these tariffs have significantly eroded the price competitiveness of Bangladeshi apparel in the US market — the country's largest single export destination. BGMEA has repeatedly called for diplomatic engagement to address the tariffs, and the US state lawsuit provides an additional pathway for potential relief that does not depend on bilateral negotiation.

However, Bangladeshi exporters should not count on immediate relief. The Trump administration has shown a pattern of keeping tariffs in effect during appeals, meaning that even if the states' lawsuit succeeds at the Court of International Trade, the tariffs could remain in place for months or years while the case works its way through the appellate system. Bangladesh's apparel sector therefore needs to continue operating under the assumption that the tariffs will remain in effect for the foreseeable future — while monitoring the US legal proceedings for any signs of an eventual favourable ruling.

📋 Strategic Context

The lawsuit represents the most significant legal challenge yet to the Trump administration's second-term tariff strategy. With 25 states participating and the case building on a previous Supreme Court defeat for the administration, the legal momentum appears to be shifting against the president's broad-brush tariff approach. But the Trump administration has demonstrated that it will continue imposing tariffs even after legal defeats — finding new legal authorities, issuing new justifications, and maintaining tariffs during appeals.

For global trade partners, the lawsuit offers a reminder that the US tariff landscape remains legally contested and politically volatile. Bangladesh, like other affected trading partners, faces a US trade policy environment in which tariffs can be imposed quickly under various legal authorities, struck down by courts, and then re-imposed under different authorities — with the underlying trade disruption persisting throughout the legal back-and-forth. The path to tariff stability runs either through a definitive Supreme Court ruling that closes off all available legal authorities for broad-brush tariffs, or through a change in administration that brings a different approach to trade policy. Until one of those outcomes materialises, Bangladesh's exporters must plan for continued tariff uncertainty in their largest export market.