Twenty-five states filed suit in the U.S. Court of International Trade on August 3, 2026, seeking to vacate the Section 301 forced-labor tariffs that took effect on July 24. The case is State of Oregon v. Trump, Court No. 26-03467.
The suit is the second challenge to the July action and the third round of multistate tariff litigation in less than a year. Its central claim is that the forced-labor rationale is a pretext, and that the tariffs are the same global duty the government has now tried to impose under three different statutes.
The action being challenged
The Office of the U.S. Trade Representative initiated Section 301 investigations on March 12, 2026, directed at whether trading partners impose and effectively enforce prohibitions on the importation of goods produced with forced labor. USTR announced the resulting action on July 23. Duties took effect at 12:01 a.m. on July 24, 2026, and the notice of action was published at 91 Fed. Reg. 47,318.
The action covers 60 economies, 59 countries plus the European Union, which together account for 99.4 percent of U.S. imports. The rates are not uniform, but they fall into a narrow band: 10 percent on 17 economies, 10 percent net of MFN on two economies including the EU, 12.5 percent net of MFN on three economies, and 12.5 percent on 38 economies.
The claims
The complaint pleads three counts against President Trump, the United States, USTR and Ambassador Jamieson Greer, and CBP and Commissioner Rodney S. Scott.
Count I alleges agency action in excess of statutory authority and contrary to law under 5 U.S.C. §§ 706(2)(A) and 706(2)(C). The states argue that Section 301, 19 U.S.C. §§ 2411–2420, authorizes action against particular acts, policies, or practices of a particular foreign country, and that action must be calibrated to eliminate the conduct identified. A single proceeding covering nearly every U.S. trading partner, they contend, is not that statute.
Count II alleges arbitrary and capricious action under 5 U.S.C. § 706(2)(A). The states argue that USTR did not articulate a rational connection between the facts found and the action taken: rates were not tied to the prevalence of forced labor in any given economy, substantive comments contradicting the agency’s rationale went unanswered, and the action provides no mechanism by which a country can obtain relief by correcting the conduct at issue. A 10 percent floor applies regardless of what a trading partner does.
Count III pleads ultra vires action, invoking the non-statutory right to enjoin unlawful official conduct and the tariff power committed to Congress under Article I, Section 8.
The prayer for relief asks the court to hold unlawful, vacate, and set aside the tariff action; to stay it and enjoin its implementation; to declare it unlawful; and to award the plaintiff states refunds of duties paid, plus costs and fees.
Who is suing
Oregon, Arizona, and California co-led the filing. Twenty-three states appear through their attorneys general: Oregon, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Rhode Island, Vermont, Virginia, Washington, and Wisconsin. Two more appear through their governors: Kentucky, through the Office of the Governor ex rel. Andy Beshear, and Pennsylvania, through Governor Josh Shapiro.
The third statute
The pretext argument depends on sequence, and the sequence is a matter of record.
The administration first imposed global tariffs under the International Emergency Economic Powers Act. In February 2026, the Supreme Court held those tariffs unlawful.
It then invoked Section 122 of the Trade Act of 1974, which permits a temporary import surcharge of up to 15 percent for 150 days to address balance-of-payments deficits. State attorneys general challenged that action as well, and in May 2026 the Court of International Trade held that the President had acted unlawfully. The Section 122 surcharge expired by operation of law on July 24, 2026.
The Section 301 duties took effect the same day the Section 122 surcharge lapsed. The states treat that timing as evidence that the object was continuity of the tariff rather than remediation of forced labor. They also point to the compressed schedule: roughly two and a half months from initiation to action, against Section 301 investigations that have historically run a year or more.
A parallel case
The states are not first to court. On July 24, 2026, the day the duties took effect, Burlap & Barrel, Inc., a New York spice importer, and Collective Horology, a California watch distributor, filed their own challenge in the Court of International Trade, represented by the Liberty Justice Center. Those plaintiffs raise overlapping theories: that USTR failed to identify, economy by economy, the specific governmental practice being addressed and how the duty would eliminate it, and that near-uniform rates across materially different countries are arbitrary. They also seek refunds with interest. The same two companies challenged the Section 122 surcharge.
Commentators expect the Court of International Trade to consolidate the pending challenges and decide them together. If the court reaches the merits and vacates the action, the remedy would not be limited to the plaintiffs.
Posture and timing
No merits ruling has issued, and nothing in the litigation suspends collection. The duties remain in effect and CBP continues to assess them.
The refund question is the practical one. The plaintiff states have asked for refunds, and the importer plaintiffs have asked for refunds with interest, but neither request extends relief to importers who are not before the court. The IEEPA refund process that followed the February Supreme Court decision showed how much turns on entry status and on whether a claim was preserved before liquidation. Importers paying these duties should be tracking entry dates and liquidation status now rather than after a decision issues.
The allegations described above are allegations. No court has ruled on the merits of the claims in either pending case. This article is for general informational purposes and is not legal advice.