Two small US companies, including one from California, filed a lawsuit against Donald <a href="/topic/Trump">Trump</a>'s administration just hours after a new round of tariffs on more than 80 countries went into effect. The litigation could become a key test of the limits of presidential power to change trade policy without congressional approval. The New York Times revealed that the plaintiffs are Collective Horology, a watch company based in California, and Burlap & Barrel, a New York business dedicated to selling spices. Both maintain that the White House improperly used Section 301 of the Trade Act of 1974 to impose levies that, in effect, replace other tariffs that were previously challenged by the courts.

California company leads the challenge For the Californian public, the case is especially relevant because Collective Horology, with operations in the state, is among the companies that decided to take the dispute to the International Trade Court. The companies are represented by the Liberty Justice Center, an organization that has previously managed to stop trade measures promoted by Trump. According to the lawsuit, the administration conducted general investigations into alleged forced labor practices in dozens of countries and announced the tariffs before concluding those processes, which, to judgment of the lawyers, exceeds the powers granted by the legislation.

“Forced labor is morally indefensible, but an important goal does not justify the government ignoring the law,” said Sara Albrecht, president and CEO of the Liberty Justice Center.

The dispute could go to court again

According to the aforementioned media, the new tariffs affect more than 80 countries, including Mexico, Canada and members of the European Union, with rates ranging from 10% to 12.5%.

The plaintiffs argue that the Trump administration used Section 301 to reinstate a tariff scheme similar to the one that was previously invalidated by the courts, rather than respond to individual investigations into unfair trade practices.

The White House did not respond to requests for comment on the lawsuit. However, government officials have defended the strategy, saying the president will use all available legal tools to strengthen the country's trade policy.

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