A coalition of 25 Democratic-led US states on Monday challenged President Donald Trump's Section 301 tariffs on 60 countries, including India, before the US Court of International Trade.
India is currently subject to a 10 per cent tariff under the Section 301 measures, while the outcome of another investigation that could lead to additional tariffs is still pending.
Last month, the US imposed a fresh round of tariffs ranging from 10 per cent to 12.5 per cent on these 60 countries, citing their failure to address forced labour. The move replaced the 10 per cent global tariffs that expired on July 24.
Also Read | What is the US' forced labour tariff and what it means for India?
25 US states move trade court
The 25 states filed a lawsuit in the US Court of International Trade on Monday against the Trump administration's decision to impose tariffs on several countries, arguing that the measures would increase costs for consumers and businesses across the country.
{{/usCountry}}The 25 states filed a lawsuit in the US Court of International Trade on Monday against the Trump administration's decision to impose tariffs on several countries, arguing that the measures would increase costs for consumers and businesses across the country.
{{/usCountry}}New York Attorney General Letitia James, Governor Kathy Hochul and the coalition of Democratic-led states have asked the court to declare the tariffs illegal.
"After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs," James said in a statement.
Also Read | US imposes 10% ‘forced labour’ tariff on India under Section 301 investigation
India among countries facing 10% tariff
India, along with 16 other countries, is subject to a 10 per cent tariff. The US had earlier proposed a 12.5 per cent tariff on Indian imports.
The lower rate came after India amended its Foreign Trade Policy on June 14 to ban imports of goods made using forced labour.
While the Trump administration says it is using Section 301 of the Trade Act of 1974 to combat forced labour in global trade, the lawsuit argues that this is merely a pretext to reimpose the same sweeping tariffs that the administration has repeatedly tried, and failed, to enact.
According to the lawsuit, the administration violated the law by failing to follow the procedural requirements under Section 301 and by imposing the tariffs without establishing a clear connection to its stated objective of combating forced labour.
"No matter how the administration tries to justify it, the law and our Constitution are clear that the president does not have the power to impose sweeping tariffs on whatever countries he wants," James said.
"Tariffs are taxes, and the American people cannot and should not shoulder the extra costs that come from the President's failed and illegal economic policy, no matter how much the President wants them to," California Attorney General Rob Bonta said in a statement.
Also Read | 60 US Senators back new bill proposing 100% tariffs on India, others for buying Russian oil
Lawsuit on how tariffs are imposed
The lawsuit argues that the tariffs were imposed arbitrarily and bear little connection to the administration's stated goal of combating forced labour.
It also contends that the product-specific exemptions included in the tariff regime undermine the administration's own justification.
According to the lawsuit, the administration's investigation identified only three products allegedly made with forced labour to justify imposing tariffs on dozens of countries.
The complaint further alleges that the Office of the United States Trade Representative (USTR) failed to adequately consider testimony from affected countries and public comments submitted during the expedited consultation process. It says those submissions overwhelmingly contradicted the administration's claim that the tariffs would help address forced labour in global supply chains.