The businesses are represented by the Liberty
Justice Center, a legal group that has successfully challenged
President Trump’s past duties.
·
Fresh
legal challenge: Two U.S. small businesses—Burlap
and Barrel (New York spice retailer) and Collective
Horology (California watch seller)—filed a lawsuit
on July 24, 2026,
challenging the Trump administration’s latest global tariffs.
·
Tariffs
under challenge: The suit targets tariffs imposed on
imports from more than 80 countries,
including Canada, Mexico, and all EU member states, with
rates ranging from 10% to 12.5%.
·
Legal
representation: The plaintiffs are represented by the Liberty
Justice Center,
which has previously succeeded in overturning several Trump-era tariffs during
his second term.
·
Main
legal argument: The lawsuit claims the administration is
attempting to recreate tariff measures previously ruled
illegal by U.S. courts, merely by using a
different legal authority.
·
Use
of Section 301: Unlike earlier tariffs imposed under the International
Emergency Economic Powers Act (IEEPA), the
new duties rely on Section 301 of the Trade Act of 1974,
which authorizes tariffs against countries engaging in unfair trade practices.
·
Challenge
to Section 301 investigations: The
plaintiffs argue that:
o Investigations were conducted collectively
rather than country-by-country.
o The administration had already decided to
impose tariffs before completing the investigations.
o Therefore, the investigations were predetermined
and procedurally flawed.
·
Forced
labor justification questioned: The
administration justified the tariffs by citing failures of countries to combat forced
labor.
However:
o 86 countries were
found at fault.
o Countries with strong forced-labor laws, such as Canada,
still face a 10% tariff.
o China,
frequently criticized by the U.S. over forced labor,
faces only a 12.5% tariff,
raising questions about consistency.
·
Constitutional
concerns: The Liberty Justice Center
argues the tariffs:
o Violate the U.S.
Constitution, which grants Congress authority over
tariffs.
o Would significantly expand presidential
tariff powers if upheld.
·
Administration's
defense:
o Officials argue the new tariffs are not
identical to those previously struck down.
o They maintain the President is entitled to
use available statutory tools to
pursue trade policy.
o The White House says tariffs cannot
realistically be removed "overnight," even if countries improve their
practices.
·
Additional
lawsuit: Another group of small businesses, led by
Learning Resources, also
filed a separate challenge against the same Section 301 tariffs.
·
Court
venue: Both cases will be heard by the U.S.
Court of International Trade, which has previously
ruled against several Trump tariff measures.
·
Possible
involvement of states: States that
successfully challenged earlier tariffs, including Oregon, are
considering joining the latest legal battle.
·
Broader
implications: The outcome could determine:
o The scope of presidential
authority under Section 301.
o Whether the administration can use
alternative statutes to maintain broad tariff policies after earlier legal
defeats.
o The legality of additional Section 301
investigations targeting 15 countries, the European
Union, and future actions against EU policies
affecting U.S. technology companies.
·
Further
legal risks: The administration has also announced a
separate 50% tariff on Canadian exports under
a little-used statutory provision, which legal experts believe is also likely
to face court challenges.
The
lawsuits represent the latest test of the Trump administration's tariff
strategy. While Section 301 has historically been upheld by courts, the
plaintiffs argue that its use in this case exceeds statutory limits and
effectively circumvents prior judicial rulings. The decisions in these cases
could significantly shape the future balance of power between the President and
Congress over U.S. trade policy.
[ABS News Service/25.07.2026]
Two
small businesses sued the Trump administration on Friday (24.07.2026) over the latest
tariffs it has imposed around the world, touching off another legal battle that
could redefine President Trump’s powers to wage a global trade war.
The
new challenge concerned the tariffs that the government had put in place just hours
earlier, covering more than 80 countries including Canada, Mexico and the 27 members
of the European Union. The lawsuit, filed in a federal trade court, argued that
the Trump administration had misused the law in its attempt to recreate the same
system of duties that judges had already ruled illegal.
The
plaintiffs in the case are Burlap and Barrel, a New York spice retailer, and Collective
Horology, a California watch seller. They are represented by the Liberty Justice
Center, a legal group that has successfully challenged
Mr. Trump’s tariffs repeatedly in his second term.
Lawyers
for the organization had previously joined state officials in invalidating the president’s
original roster of punishing, country-by-country duties at the Supreme Court in
February, and they similarly succeeded against Mr. Trump’s temporary replacement
for those tariffs in the spring. The Liberty Justice Center
has won over judges with arguments that Mr. Trump has violated the Constitution
by usurping tariff powers reserved for Congress.
At
the heart of the most recent fight is Mr. Trump’s use of Section 301 of the Trade
Act of 1974. In general, the provision of law allows the government to investigate
other countries’ trade practices, and it permits the president to impose tariffs
on those that are found to behave unfairly.
Generally,
Section 301 is understood to be settled policy, unlike some of Mr. Trump’s earlier
tariff actions, which relied on novel interpretations of federal law. In fact, the
president’s use of Section 301 to impose duties on Chinese goods during his first
term survived several court challenges.
But
small businesses said that Mr. Trump had stretched the statute beyond its limit
this time, pointing to the way that his administration conducted its investigations
— and the fact that it had planned to impose tariffs even before its reviews concluded.
One
of the investigations specifically concerned claims that other countries had failed
to crack down on “forced labor,” which had left U.S. businesses
that follow such laws prohibiting coercive practices at a disadvantage. In June,
the administration said it found fault in 86 countries, including U.S. allies that
have laws banning forced labor practices. The tariffs
it levied on Friday range between 10 percent to 12.5 percent, with little differentiation
based on the country or its labor laws.
Canada,
which has a law prohibiting forced labor, faces a 10 percent
tariff on its exports. China, which U.S. officials frequently criticize for using
forced labor, is subject to a tariff that is only 2.5
percent higher. Foreign officials say they have also received assurances from the
United States that their tariff rates will be the same as they were under the trade
deals they previously negotiated.
In
response, lawyers for the two small businesses argued in their lawsuit that Jamieson
Greer, the U.S. trade representative, did not adequately investigate each country.
They contend that the administration had erred by studying the countries and issuing
its findings and subsequent tariffs in bulk.
The
opponents also pointed to past statements from Mr. Trump and his deputies, who had
said they hoped to use Section 301 to replicate the tariffs declared illegal previously
by the courts. That, according to the lawyers, suggested that the outcome of the
investigations were predetermined, not based on the facts
uncovered.
“Those
statements, in combination with the timing, scope and rate structure of the final
action, support the inference that the Section 301 tariffs, by design, replace the
invalidated global tariff regime rather than constitute measures selected to obtain
elimination of identified economy-specific practices,” they argued in their lawsuit.
Lawyers
for the Liberty Justice Center said it was not clear how
taxing imports on such a wide set of goods would help to change other countries’
labor practices. And they said the scope of the administration’s
efforts raised constitutional concerns, arguing that a blessing by the court would
greatly expand Mr. Trump’s power to impose tariffs without Congress.
“Forced
labor is morally indefensible, but an important objective
does not give the government permission to ignore the law,” said Sara Albrecht,
the chairman and chief executive of the center. “The administration
allowed one global tariff to expire and immediately replaced it with another under
a different statute. Changing the statute doesn’t change the law.”
The
White House did not respond to a request for comment. But Mr. Trump, commenting
on the tariffs on Friday, described them as “standard,” pointing to the fact he
had used them in the past.
When
asked if any country could take action that would fully remove the tariffs, a senior
administration official said Thursday that the government welcomed countries to
take action but that the tariffs probably could not be “eliminated overnight.”
The
official said that it was “too simplistic” to say the new tariffs replicated the
ones struck down by the Supreme Court, and that they differed in important ways.
But the official added that Mr. Trump would always use the tools at his disposal
to achieve his trade policy goals, and that the president was not going to allow
his trade policy to be undermined simply because one tool was limited by a court.
The
lawsuit from the Liberty Justice Center was not the only
legal challenge to be filed on Friday. Another group of small businesses, including
Learning Resources, an educational toy company, similarly sued the administration
on Friday over its new tariffs under Section 301. That company had also participated
in the successful, earlier fight against Mr. Trump’s original duties.
The
new cases will send Mr. Trump and his opponents back to the Court of International
Trade, a specialized federal circuit that has repeatedly found that the administration
exceeded its power under law. The past fights have been tense, evident in the continuing
battle over the roughly $160 billion that the government owes to importers who paid
illegal tariffs imposed under the International Emergency Economic Powers Act.
Once
again, states opposed to Mr. Trump’s tariffs could soon join the fight. Dan Rayfield,
the attorney general of Oregon, said he was “reviewing the latest action to determine
next steps.”
Citing
Mr. Trump’s past tariff defeats, he criticized the president for “trying yet another
way to impose the same costs on working families who are already struggling to get
by.”
More
duties are expected from Mr. Trump in the coming weeks, some of which could be affected
by the new legal battle. The administration has explored a second tranche of tariffs
using Section 301, targeting 15 countries and the European Union to offset what
the White House calls unfair practices in their manufacturing sectors. And Mr. Trump
on Friday said the government would open still another investigation into the European
Union over its practice of fining U.S. tech companies.
The
administration also invoked this week an obscure law to impose a 50 percent tariff
on billions of dollars of Canadian exports. In that case, the president relied on
a portion of the statute that has never been used to impose duties. That provision
will not go into effect for 30 days. If it ultimately does go into effect, legal
experts said it was also likely to be challenged.