President Donald Trump's effort to preserve his sweeping tariff program after a Supreme Court defeat is back before federal judges, as businesses and 25 Democratic-led states challenge the administration's latest legal justification for taxing most imports into the United States.

A three-judge panel of the U.S. Court of International Trade in Manhattan heard arguments over duties imposed under Section 301 of the Trade Act of 1974. The tariffs range from 10 percent to 12.5 percent and cover more than 99 percent of the goods imported into the United States, according to CNBC. That scope is central to the stakes: whichever legal foundation the duties rest on will govern tariffs touching nearly every category of goods entering the country.

The case marks another chapter in Trump's effort to keep his global tariff policy in place after the Supreme Court ruled on February 20 that the International Emergency Economic Powers Act does not give presidents the authority to unilater impose tariffs on all of the United States' trading partners. That ruling struck down the legal foundation of the earlier worldwide duties and forced the administration to find a replacement authority.

In response to the decision, Trump imposed a temporary 10 percent worldwide tariff under Section 122 of the Trade Act, a balance-of-payments authority limited to 150 days. A federal trade court ruled against those duties, but an appeals court stayed the ruling, allowing the tariffs to remain in effect until the 150-day period expired.

When those tariffs lapsed in July, the administration turned to Section 301, the provision that gives the Office of the U.S. Trade Representative power to investigate and respond to unfair foreign trading practices — the same authority behind country-specific measures such as the U.S. tariffs on Chinese goods first imposed in 2018. U.S. trade officials said the new duties were justified because numerous trading partners had not done enough to stop trade in goods produced with forced labor.

The challengers counter that Section 301 requires the government to identify specific unfair trading practices and then decide on an appropriate response, rather than applying tariffs that are nearly identical across much of the world. They argue the administration is using the issue of forced labor as a legal basis for a tariff system that courts have already rejected.

Pratik Shah, an attorney for two of the companies challenging the tariffs, told the judges that the administration could not sidestep those statutory requirements simply because it wished to act quickly.

"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.

The Justice Department rejected that argument. Government attorneys said the Office of the U.S. Trade Representative carried out inquiries into each trading partner subject to the measures and determined that the tariffs were justified on Section 301 grounds.

Trump himself has tied the new approach to the tariffs invalidated by the Supreme Court. During a July interview with Fox News, he said the administration had discovered other legal avenues for "doing the same thing."

The litigation stems from lawsuits filed by four small businesses and a group of states. The three judges weighing the dispute were appointed by Trump, Barack Obama, and Joe Biden.

The panel did not issue an immediate ruling. A written decision is expected to follow the hearing, and either side may then seek review from the U.S. Court of Appeals for the Federal Circuit, which hears appeals from the trade court. Whichever way the panel rules, another key element of Trump's tariff agenda now hinges on whether the courts accept the administration's most recent exercise of its presidential trade powers.