States sue federal govt over new tariffs, seek refunds

Twenty-five US states sued the US administration on Monday over its latest tariffs, calling them a pretext for replacing import taxes the Supreme Court struck down in February and arguing that they are unlawful, while seeking refunds of duties paid by the plaintiff states.

US administration imposed the tariffs last month under Section 301 of the Trade Act of 1974, which authorizes trade action against foreign government practices found to be unreasonable or discriminatory and to burden US commerce.

These new additional duties of 10 to 12.5 percent apply to most imports from the European Union and 59 other countries, including China. The Office of the United States Trade Representative said the economies had failed to impose or effectively enforce prohibitions on imports made with forced labor.

"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," said Letitia James, attorney general of New York, one of the states that is suing.

The lawsuit, filed in the US Court of International Trade in New York on Monday, claims US President Donald Trump has exceeded his legal authority in imposing tariffs.

"Despite losing every step of the way, Trump is trying yet again to inflict more chaos on working families and homegrown Oregon businesses," Attorney General Dan Rayfield of Oregon, which is also party to the lawsuit, said in a statement.

However, White House spokesman Kush Desai fought back, arguing that "the United States is using its lawful authority to obtain the elimination of unreasonable acts, policies and practices that burden US commerce".

The lawsuit argues that in this case, the Office of the USTR rushed through the required investigations into forced labor allegations, and failed to carry out required country-specific consultations.

It also said the blanket rate of tariffs across multiple countries does not conform to the requirement that they be tailored to each country's circumstances, or that they set specific tariff rates in relation to the amount of alleged forced labor in each country.

"There is no rational fit between the purported problem of forced labor in international supply chains and the blanket global tariffs the USTR has imposed," the lawsuit stated.

In a July 23 article, "The Forced Labor Case Against Brazil Is Not About Forced Labor", Monica de Bolle, senior fellow at the Peterson Institute for International Economics, noted that Brazil is one of the US targets, yet this dispute is not about forced labor.

'Bogus justification'

"Using slave labor as a bogus justification for a trade war becomes obvious when you realize that the tariff is being threatened against some 60 economies simultaneously," she wrote.

In a written comment to the USTR during consultations on the new tariffs, Helio Chen from importer YTL International warned that the additional duties would raise costs for US businesses and ripple through the domestic supply chain.

"The proposed action would adversely affect US distributors, retailers, service providers, and logistics companies," Chen wrote. "These downstream businesses are predominantly American companies employing US workers. Increased equipment costs would reduce sales volumes, negatively affecting revenues and employment opportunities throughout the domestic supply chain."

Keith Currie, president of the Canadian Federation of Agriculture, said in a comment: "At a time when food price pressures persist and global supply chains remain strained, additional trade barriers risk further inflating food costs and limiting access to safe, reliable, and affordable food."

US administration last year imposed double-digit tariffs on nearly every country under the 1977 International Emergency Economic Powers Act, claiming that the US trade deficit was a national emergency.

Those tariffs were struck down by the Supreme Court, following which importers sued for refunds. The US administration then imposed temporary worldwide tariffs of 10 percent, which expired on July 24.

shiguang@chinadailyusa.com