Trump's Tariffs in Court: What Changes for Importers

The trade tariffs imposed by Donald Trump's administration have returned to the courts. Two lawsuits filed by small American businesses challenge the new round of tariffs affecting 60 trading partners, including Brazil. However, this time, the legal path to overturn these measures appears much steeper than in previous battles.

The new tariffs, which impose double-digit rates and cover about 99% of imports into the United States, were implemented under Section 301 of the Trade Act of 1974. The official justification: to punish countries that allegedly failed to prevent the importation of products made with forced labor. The real justification, according to critics, is different.

Why Trump's New Tariffs Ended Up in Court

The timeline is revealing. In February, the U.S. Supreme Court struck down the global tariffs that Trump had imposed the previous year. Soon after, temporary tariffs of 10% applied globally also expired. The new measures came into effect at exactly the same time, using a different legal basis.

For critics, this is a maneuver: changing the legal instrument without altering the objective. Sara Albrecht, president of the Liberty Justice Center, a libertarian advocacy group representing some of the plaintiffs, summarized the thesis: "Changing the legal basis does not change the law."

The educational toy company Learning Resources, which had previously won the earlier battle in the Supreme Court, filed a new lawsuit in the International Trade Court along with other small businesses. A second lawsuit includes Burlap and Barrel, a New York spice company, and Collective Horology, a California watch retailer.

Both lawsuits maintain the same point: the government did not substantiate the accusations against each specific economy nor explain how the tariffs would eliminate the practice of forced labor that supposedly motivated the measure. Section 301 requires this substantiation.

Why It Will Be Harder to Overturn These Tariffs

Those following the dynamics of global markets know that not every legal battle produces the same outcome. Experts warn that the landscape has changed.

Attorney Patrick Childress, a partner at Holland & Knight and a former member of the U.S. government's foreign trade team, was straightforward: "These tariffs are here to stay." The reason is technical. Trump used the same Section 301 to impose high tariffs on China during his first term, and those measures withstood all challenges in the courts.

There is an additional aggravating factor. Even if the affected countries adopt exactly the policies required by Washington, they will still need to prove to the U.S. government that they are implementing these measures satisfactorily. Only after that could the tariffs be lifted. In practice, this means there is no short-term path to tariff relief.

The difference between the tariffs struck down by the Supreme Court and the current ones lies precisely in the legal basis. The previous tariffs were imposed under Section 122, which has clearer limits on scope and duration. Section 301, on the other hand, has already been tested and approved by the courts as a legitimate trade policy instrument.

What This Means for Brazil and Investors

Brazil is among the 60 trading partners affected by the new tariffs. For Brazilian importers who rely on American inputs, or for exporters selling to the U.S., the outlook is one of prolonged uncertainty.

Historically, trade wars generate chain effects that go far beyond the tariffs themselves. As we analyzed in articles about the impact of trade wars on markets, the rising cost of imports pressures production costs, fuels inflation, and alters capital flows between emerging and developed markets.

For Brazilian investors, there are three key points to consider. First, the exchange rate. Broad tariffs tend to strengthen the dollar in the short term, which pressures the real. Second, the stock market. Export sectors such as agribusiness, mining, and steel may suffer from higher barriers in the world's main consumer market. Third, fixed income. A scenario of a stronger dollar and global uncertainty tends to keep Brazilian interest rates elevated for a longer time.

The central issue is that, unlike previous tariffs, these appear to be legally more robust. Section 301 gives the American president broad maneuvering room, and the courts have already validated this instrument. This changes the calculation for companies and governments: instead of betting on judicial victories, the more likely strategy will be bilateral negotiation.

The Precedent of China and What It Teaches

During Trump's first term, Section 301 tariffs on Chinese products reached 25% in various categories. Companies and trade associations attempted to overturn them in court. They failed. The tariffs not only survived but were maintained by the Biden administration, which even expanded them in strategic sectors such as semiconductors and electric vehicles.

The Chinese precedent suggests that the new round of tariffs may become a permanent part of the American trade framework. For those analyzing the global macroeconomic scenario, this represents a structural change: free trade, as the dominant paradigm since the 1990s, is being replaced by a managed trade model, with tariffs as a tool of geopolitical pressure.

American small businesses that filed lawsuits know this. Many of them rely on imports to operate and are being squeezed between higher costs and consumers who do not accept price increases. Learning Resources, for example, imports most of its educational toys and has already felt the impact in the previous round.

The outcome of these lawsuits may take months or years. In the meantime, the tariffs remain in effect, costs rise, and uncertainty settles in as a permanent variable in business and investment planning.