The trade war between the US and nations across the globe continues with another round of tariffs, lawsuits and, in this instance, investigations of the United States’ longtime trade partners.
As the United States processes billions in refunds for costs associated with tariffs unlawfully imposed under the International Emergency Economic Powers Act (IEEPA) in 2025 and early 2026, the administration has now moved forward with tariffs under sections 122, 201 and 301 of the Trade Act of 1974.
Trade definitions
International Emergency Economic Powers Act (IEEPA) - Grants the President of the United States broad authority to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.
Section 122 of the Trade Act of 1974 - Grants the President authority to impose a temporary import surcharge, not to exceed 15 percent ad valorem, in the form of duties (in addition to those already imposed, if any) on articles imported into the United States, temporary limitations through the use of quotas on the importation of articles into the United States or both.
Section 201 of the Trade Act of 1974 - Gives the President the authority to impose tariffs to provide relief for imports in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article.
Section 301 of the Trade Act of 1974 - Empowers the US Trade Representative the ability to investigate trade partners where it is suspected that the rights of the United States under any trade agreement are being denied; or an act, policy, or practice of a foreign country violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States.
The Trump administration now faces lawsuits from 25 state attorneys general over the new tariff policy. The policy, which was announced in late July, imposes 10% to 12.5% tariffs on 59 US trade partners, based on the notion that the countries are doing too little to combat forced labor in global trade.
Tax and food industry experts discussed the rapidly changing trade policies Wednesday at The Food Institute webinar “Food Industry Tariffs: Risks, Refunds and What’s Next.”
Tariffs return with forced labor rationale
While the IEEPA tariffs – which raised roughly $133 billion – were justified on the grounds of trade imbalances and national security concerns associated with fentanyl smuggling, the 301 tariffs take a similar approach with the seemingly ungermane topic of forced labor.
Describing the approach as “deja vu all over again,” Buzz Burwell, a partner at the law firm Nelson Mullins LLP, told the panel that IEEPA could return under a different tariff scheme, but for now, the administration is imposing tariffs under sections 122 and 301 of the Trade Act of 1974.
“This was, I think, a concept developed by forced labor issues coming out of China some years back, and now the administration is taking a look at the practices in other countries,” he said. “And it puts a burden on you as an importer, or if you’re procuring commodities from those jurisdictions, to be aware of what that increased cost could rise, how it could rise.”
He noted tariffs are also now being raised under the assumption that they will lead to investment in the US. “That theory remains to be seen,” he said.
Burwell noted that the 301 investigations began years ago during the first Trump administration, and some tariffs imposed continued into the Biden administration.
“Now we’re back revisiting new kinds of 301 investigations,” he said, noting that food and beverage companies associated with aluminum, tin and steel could be subjected to the tariffs.
The Court of International Trade last week just assigned a three-judge panel to hear an argument on these new tariffs that were raised by three plaintiffs, noted panelist Chris Cushing, government relations group leader and managing principal at Nelson Mullins.
“Part of that is 25 attorneys general, I believe all Democrats, have sued. So we’re back in the courts relative to these tariffs,” Cushing said.
Another round of lawsuits
The state AG lawsuits, filed in the first week of August, were followed with a wave of press releases.
In Colorado, Attorney General Phil Weiser said the administration has recently increased tariffs on 80 countries that account for 99.4% of all US imports.
“Once again, we are taking action to challenge an unlawful executive order imposing tariffs that will be passed on to Coloradans already struggling to pay the price of essential consumer goods,” Weiser said, adding that 90% of tariff costs in 2025 were paid by American consumers and businesses. “The administration is tripling down on tariff policies that the federal trade courts and the US Supreme Court have ruled unlawful, and I’m confident they will do that same with this latest round.”
Weiser said the latest round of tariffs under section 301, which claims to combat forced labor in global trade, were put in place as a work around for the unlawful IEEPA tariffs.
“Late last month, the trade representative did what Trump wanted all along, imposing 10% and 12.5% tariff rates on nearly every economy that trades with the US,” Weiser said. “In other words, instead of taking actions that would combat forced labor, the trade representative reached a foregone conclusion and imposed across-the-board tariffs like those that courts have struck down twice before.”
The AG lawsuit is led by Oregon Attorney General Dan Rayfield, Arizona Attorney General Kris Mayes and California Attorney General Rob Bonta. They are joined by AGs in Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Rhode Island, Virginia, Vermont, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.
Retaliation all over again?
During the first round of tariffs in 2025, nations across the globe responded with their own round of retaliatory tariffs, but it is unclear whether they’ll take the same approach this time around, according to Cushing.
“China and Brazil and other countries may or may not retaliate. Most countries now are thinking that it’s best not to retaliate. The EU is kind of taking that position. We’ll have to see,” he said.
Avoiding the headache of tariffs could be an incentive for food and beverage manufacturers to base their manufacturing in the US.
“A recent survey by Miltec of 250 small businesses said that 90% of the tariff uncertainty is delaying investment decisions, and the administration’s position, unfortunately, on this – I say unfortunately, that’s my personal opinion – is they say if you want certainty, just manufacture in the US,” Cushing said. “Obviously, there are some things we can’t manufacture in the US and there are other issues as to where you set your manufacturing.”
