By Dylan Moroses, LAW360
https://www.law360.com/articles/2458237
Law360 (March 27, 2026, 3:15 PM EDT) — Retailer and consumer groups told the U.S. Supreme Court that lower courts were wrong to allow the expanded tariffs President Donald Trump installed during his first term on Chinese goods, arguing that the law utilized to take such action doesn’t enable unlimited discretion to expand and increase duties without process.
Consumer Watchdog told the justices in an amicus brief filed Thursday the justices’ ruling last month to strike down tariffs Trump imposed under the International Emergency Economic Powers Act should encourage the high court to consider whether the president exceeded the authority given to him under Section 301 of the Trade Act during his first term.
Companies led by HMTX Industries LLC have challenged the tariffs installed during Trump’s first term in the White House, alleging Section 301 allows for a specific, targeted response to unfair trade practices but does not authorize the administration to conduct an open-ended trade war.
The justices’ ruling in Learning Resources Inc. v. Trump is similar in the sense the government is arguing for an expansive interpretation of the statute at issue, Consumer Watchdog said.
“Nonetheless, Learning Resources is instructive because the Court there focused on the open-ended nature of the Government’s reading of the operative language — the same flaw that infects the Government’s position here,” Consumer Watchdog said.
Furthermore, the statute relied on by the government to increase the tariffs following their imposition should be considered unconstitutional, the group said.
Interpreting Section 307 to permit modifications to the Section 301 tariffs without explanation would run afoul of the nondelegation doctrine, which generally prohibits the legislative branch from delegating its core authorities under Article I of the Constitution, according to Consumer Watchdog’s brief.
Provisions in Section 307 allow the U.S. Trade Representative to modify Section 301 actions in certain circumstances, but Consumer Watchdog argued in their amicus those kinds of modifications should be proportionate with required findings and further procedure.
“If the statute authorizes USTR to increase by a factor of seven the previously imposed tariffs without meaningful limiting principles, then it confers precisely the kind of unbounded policymaking discretion that the nondelegation doctrine forbids,” Consumer Watchdog said.
Last year, the Federal Circuit blessed the Section 301 tariffs on Chinese goods installed by the first Trump administration in a unanimous opinion.
The three-judge panel ruled Trump’s first administration was within its rights to expand its initial tariff hit, which enlarged the targeted amount of Chinese goods from $50 billion to $300 billion. The panel found that Section 301 gives a wide berth to the Office of the USTR in assessing the harm of foreign trade barriers.
The companies requested the Supreme Court review their case in February, arguing that the courts failed to properly interpret the law in allowing the tariffs to be increased, and its petition remains pending.
Also Thursday, a group of retail organizations including the Retail Litigation Center told the justices that the products which were targeted by the Trump administration when it increased the Section 301 tariffs have significant economic and political importance.
“The Lists 3 and 4A tariffs have cost U.S. businesses and consumers billions of dollars, snarled supply chains, and hurt employment in multiple sectors,”
And, rather than utilize Section 301 and its associated process to impose the tariff increases, the first Trump administration circumvented those procedures when it relied on Section 307, the retail groups said.
The ability of the government to use a “severely truncated process” through Section 307 to modify the tariffs in such a consequential manner should implicate the major questions doctrine for the justices, the groups said. The doctrine generally says large-scale regulatory initiatives that have broad effects can’t be grounded in vague, minor or obscure provisions of law without clear congressional authorization.
“USTR’s sweeping assertion of such modification authority is unprecedented, and the economic significance of these tariffs is undeniable,” the groups said. “If Congress had meant to delegate to USTR such unbounded power in Section 307, it would have done so clearly.”
And now, Trump is planning to utilize Section 301 tariffs as a replacement to the duties struck down by the justices imposed under the IEEPA. These latest actions make review of the case even more timely to consider in order to prevent another risk of an unconstitutional tariff regime, the groups said.
“Under the Federal Circuit’s decision here, USTR could then use Section 307 to repeatedly increase tariff rates set through the Section 301 process and extend them to additional imports—unrestrained by meaningful process or deliberation,” the groups said. “The Executive should not be permitted to exercise such an extraordinary delegation of Congress’s core taxation authority without this Court’s review.”
Alan B. Morrison at the George Washington University Law School, counsel for Consumer Watchdog, told Law360 that Section 301 cannot be used for tariffs in the same open-ended way Trump tried to wield duties under the IEEPA before the justices struck them down.
“It’s not the open-ended box he wants to make it,” Morrison said.
Counsel for the retail groups and the U.S. Department of Justice didn’t immediately respond to requests for comment.
Consumer Watchdog is represented by Alan B. Morrison of the George Washington University Law School and in-house by Harvey Rosenfield, William Pletcher, Benjamin Powell and Ryan Mellino.
The retailer groups are represented by Joseph R. Palmore and Alison H. Hung of Morrison & Foerster LLP
The companies are represented by Pratik A. Shah, James E. Tysse, Matthew R. Nicely, Devin S. Sikes, Daniel M. Witkowski and Haley S. Gorman of Akin Gump Strauss Hauer & Feld LLP.
The government is represented by Solicitor General D. John Sauer.
The case is HMTX Industries LLC. et al. v. U.S., case number 25-1012 at the U.S. Supreme Court.
–Editing by Amy Rowe.
