The Section 301 forced-labor tariff has been in effect for less than two weeks, and it already has a lawsuit. On August 3, 2026, attorneys general from 25 states — co-led by Oregon, Arizona, and California — filed a complaint in the US Court of International Trade (CIT) challenging the tariff USTR imposed July 24 on imports from roughly 60 economies found not to have adequately curbed forced-labor practices in their supply chains. The states are asking the court to declare the tariffs unlawful, halt their collection, and order refunds of duties already paid. Nothing about the tariff has changed yet — CBP is still collecting the 10%/12.5% duty exactly as it has since July 24 — but this is a real, verified legal filing worth tracking if you're paying this tariff or planning around it.
What Was Filed, and by Whom
On August 3, 2026, a coalition of 25 state attorneys general — led by Oregon, Arizona, and California, joined by Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Virginia, Vermont, Washington, and Wisconsin — filed a complaint in the Court of International Trade. The suit targets the Section 301 forced-labor tariff: the two-tier 10%/12.5% duty on roughly 60 economies (about 99.4% of US imports by value) that USTR finalized July 24, 2026, the same day the prior Section 122 baseline expired. California Attorney General Rob Bonta called it 'President Trump's third attempt to illegally impose tariffs that would make life more expensive for American families and small businesses' — a reference to this being the third major legal challenge to the administration's tariff program, after the IEEPA case decided by the Supreme Court in February and the still-pending Section 122 challenge.
The States' Legal Argument
The complaint alleges the Section 301 forced-labor tariffs are ultra vires, arbitrary, capricious, and contrary to law. Two specific claims stand out. First, the states argue USTR did not adequately prove, on a country-by-country basis, that each of the roughly 60 targeted economies actually failed to curb forced-labor imports — the statutory predicate for a Section 301 action — nor did USTR explain how a broad ad valorem tariff would fix that alleged problem rather than just raise revenue. Second, and more pointed: the states argue the forced-labor tariff is, in substance, an attempt to revive the reciprocal tariffs the Supreme Court already struck down in Learning Resources, Inc. v. Trump (February 20, 2026) — just repackaged under a different statutory label. If a court found that framing persuasive, it would put Section 301 in the same legal jeopardy IEEPA faced, though Section 301's underlying investigative process gives the government a considerably stronger procedural record than IEEPA ever had.
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What This Does NOT Change — Yet
This is a complaint, not a ruling. No judge has found the tariffs unlawful, no injunction has been issued, and CBP has not been ordered to stop collecting. If you import from a country on the Section 301 forced-labor list, you owe the same 10% (or 12.5%, for the 46-economy higher tier) today that you owed the day before this suit was filed. Nothing here supports a claim that a refund is imminent or that rates are about to drop — treat any site or email suggesting otherwise as premature at best. What the filing does establish is a live, verified legal challenge to a tariff that until now had gone unchallenged since taking effect. Litigation of this kind in 2025-2026 has taken anywhere from weeks (the Section 122 case, filed March 5 and ruled on May 7) to the better part of a year (the original IEEPA case), so there is no fixed timeline to plan around.
How This Fits the Rest of the Tariff Litigation
This is now the third active line of tariff litigation running in parallel. The IEEPA reciprocal tariffs were struck down by the Supreme Court in February 2026 and are being refunded through CBP's CAPE process. Section 122's 10% flat tariff (in effect February–July 2026) was separately ruled unlawful by the CIT on May 7, 2026, but the Federal Circuit stayed that ruling pending appeal — with the June 11 panel signaling the government has a real shot at winning, unlike the IEEPA case. Section 301's forced-labor tariff — the subject of this new suit — replaced Section 122 on July 24 and is now itself under challenge, on different legal grounds (ultra vires/arbitrary-and-capricious under Section 301's own text, rather than IEEPA's 'major questions' problem). Separately, expect legal challenges to the new Section 338 tariff on Canada (effective August 19) on different grounds again — legal commentary has flagged that Section 338 may require an International Trade Commission investigation that never happened here. None of these cases are consolidated; each rises or falls on its own statute and its own record.
What Importers Should Do Now
Keep paying the tariff — there is no basis to withhold payment or expect a refund based on this filing alone. If you import from the roughly 60 economies covered by the Section 301 forced-labor action, this is a good moment to start tracking those duty payments as a separate line item in your records, the same way importers were advised to track Section 122 payments separately in case that case also succeeds — if this suit eventually produces a refund order, having clean records from day one saves real time later. Watch for a preliminary injunction motion, which would be the first sign the case is moving quickly; absent one, expect this to run on a normal CIT litigation timeline of months, not weeks.
Key Takeaway
Twenty-five states sued to block the Section 301 forced-labor tariff on August 3, 2026 — a real, multi-source-verified legal filing, and the third major tariff challenge of 2026. It changes nothing about what you owe today: the 10%/12.5% tariff remains fully in effect, and no refund is imminent. What it does change is the legal landscape — Section 301, previously untested in court this cycle, now has a live challenge with a specific, arguable theory behind it. Track your Section 301 payments separately in case that changes, and watch for a preliminary injunction motion as the first real signal of how fast this moves.
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