The Court of International Trade in New York heard two-and-a-half hours of arguments on Wednesday in a suit brought by four small businesses and 25 states against the 10-12.5 percent duties the Trump administration imposed on imports from 60 U.S. trading partners.

The tariffs, in effect since July 24, stem from an Office of the U.S. Trade Representative investigation launched under Section 301 of the Trade Act of 1974. The USTR alleged that dozens of economies failed to impose or adequately enforce bans on goods made with forced labor. The covered list extends well beyond China to include the European Union, the United Kingdom, Canada and Mexico — allies with existing U.S. trade agreements.

For apparel and soft goods importers, the case determines whether one of the administration's principal remaining tariff authorities survives judicial review. The hearing follows the Supreme Court's rejection of earlier tariff mechanisms, and administration officials including Treasury Secretary Scott Bessent and USTR Ambassador Jamieson Greer have cast Section 301 as a more durable foundation for the tariff strategy.

Pratik Shah, attorney for two of the plaintiff businesses, argued that President Donald Trump exceeded "carefully constrained" powers under Section 301. Section 301 probes typically target individual economies, he said, rather than blanketing dozens under the same justifications. He also contended that the administration's haste — prompted by the July expiration of its global Section 122 duties — overrode its statutory obligations.

"If you're going to do it at breakneck speed and try to cover the entire globe, you still have to satisfy the statutory requirements," Shah said, according to Reuters.

The three-judge panel pressed both sides with skeptical questions. CNBC reported that one justice responded "So what?" when Shah suggested the government was pursuing objectives beyond remedying forced labor.

Eric Hamilton, deputy assistant attorney general for the Federal Programs Branch of the Civil Division, represented the government. He said the USTR performed due diligence in evaluating each country and that its burden of proof did not require "metaphysical certainty" that forced labor burdened U.S. commerce. Hamilton acknowledged "a common basis for the determinations" across all 60 economies but insisted the investigations were conducted individually.

The judges said they would rule as speedily as possible, though a timeline of weeks or months remains possible. Any outcome affects landed-cost calculations across a sourcing base that spans the Western Hemisphere, Asia and Europe.

A second Section 301 probe looms over the same docket. In March, the USTR announced an investigation of 16 economies over alleged industrial excess capacity, arguing that surplus manufacturing output floods the U.S. market with cheap goods that undercut domestic producers. The agency has not released the results.

Josh Teitelbaum, trade and policy expert and senior counsel at Akin Gump Strauss Hauer & Feld LLP, addressed the delay at Sourcing Journal's annual Sourcing Summit on Tuesday.

"Writing that report is a far more complex task than the forced labor report, which was essentially an on-off switch; does another country have a forced labor ban on the goods it's imported into their country or not? Yes or no," he said. "Excess capacity is a totally new concept the USTR is dealing with, and so you got to flesh this out and create a far more individualized analysis for each country."

At some point, Teitelbaum said, "the political considerations took over." Tariffs drive up retail prices, and consumers vote in November.

"Is the president going to put on a 7.5-10 percent tariff four weeks before the midterm elections?" Teitelbaum asked. "I guess we'll find out in four weeks."

Importers now face a two-front planning problem. First, the pending CIT ruling could uphold, modify or strike the forced labor duties that have shaped sourcing costs since July 24. Second, the withheld excess-capacity findings signal that new tariff lines of 7.5-10 percent may land immediately after the midterms. Compliance teams should map exposure by country of origin against both scenarios now, rather than repricing supplier bases after either drops.