Full Breakdown
Small Businesses Sue Over Trump Administration’s New Forced-Labor Tariffs
7/25/2026, 3:00:54 AM
Core Event: Lawsuit Targets Nationwide Tariff Sweep
On July 24, the nonprofit Liberty Justice Center filed a complaint in the U.S. Court of International Trade in New York on behalf of two small firms—Burlap & Barrel, a New York-based online spice retailer, and Collective Horology, a California-based watch seller. The suit seeks to block the enforcement of newly imposed duties on imports from 60 trading partners and to obtain a refund of all tariffs collected under Section 301 of the Trade Act of 1974. The complaint alleges that the U.S. Trade Representative (USTR) “acted arbitrarily and capriciously” by applying near-uniform tariffs without the country-specific findings required by the statute.
Background & Context: Prior Tariff Battles and Legal Limits
President Donald Trump’s administration has repeatedly used tariff authority as a foreign-policy tool. In February 20, the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not permit the president to impose sweeping tariffs without congressional authorization, striking down the administration’s earlier global tariff regime. After that decision, the administration imposed a temporary 10 % global tariff under a different legal basis, which expired just before the new duties took effect. The current tariffs are imposed under Section 301, a provision traditionally used to address specific unfair trade practices rather than broad, economy-wide measures.
Data & Statistics: Scope and Rates of the New Duties
- Number of economies affected: 60 trading partners (including the European Union, China, Canada, and the United Kingdom).
- Tariff rates: 10 % to 12.5 % on most goods.
- Exemptions: Certain foods, fuels, automobiles, and some metals are excluded from the duties.
Official Statements & Responses
- The White House did not immediately respond to requests for comment on the lawsuit.
Verbatim Quotes
- “This is the third time the administration has attempted to impose its global tariff policy without following the statutory limits,” — Jeffrey Schwab, director of litigation at the Liberty Justice Center
- “In the absence of a domestic legal basis to sustain its protectionist trade policy, the USTR opted to manipulate an issue of great importance to human rights and to the struggle of workers around the world in order to accuse 59 countries and the European Union of unfair practices,” — the Brazilian government
Conflicting Reports & Gaps
Sources differ on the total number of jurisdictions covered. No source provides a detailed, country-by-country breakdown of the forced-labor findings, leaving a gap in public understanding of how the USTR justified the uniform rates.
