Trump’s latest global tariffs draw lawsuit from U.S. small businesses

U.S. President Donald Trump at an event in the Oval Office at the White House on July 24, 2026. Photo by Eric Lee/Getty Images

Article content

The Trump administration is facing a fresh legal challenge to the president’s latest round of global tariffs that took effect Friday.

Article content

Small businesses filed a pair of lawsuits in the U.S. Court of International Trade accusing President Donald Trump and U.S. officials of unlawfully using Section 301 of the Trade Act of 1974 to replace earlier tariffs struck down by the U.S. Supreme Court.

Article content

Article content

Article content

The Trump administration announced Thursday that the U.S. will collect duties of between 10 per cent and 12.5 per cent on imports from most major trading partners. The move under Section 301 followed a probe into the alleged failure of around 60 economies to prevent forced labor in their supply chains to the detriment of American workers.

Article content

Article content

Trump aims to rebuild a tariff wall that was struck down in February when the Supreme Court ruled his global levies, issued under the International Emergency Economic Powers Act, or IEEPA, were illegal.

Article content

Trump subsequently imposed 10 per cent global tariffs, under Section 122 of the Trade Act, and those were ruled illegal by a trade court but were allowed to stay in effect during an appeal. The Section 122 tariffs expire Friday.

Article content

Section 301 allows the U.S. Trade Representative, under the direction of the president, to impose tariffs in response to other nations’ trade measures it deems discriminatory to American businesses or in violation of U.S. rights under international trade agreements.

Article content

Spokespeople for the trade representative, White House and Justice Department didn’t immediately respond to requests for comment.

Article content

Article content

Lawyers in one of the cases filed on Friday on behalf of two small businesses — spice importer Burlap and Barrel Inc. and watch retailer Collective Horology LLC — allege in the complaint that the new tariffs failed to reflect the “country-specific inquiry” that Congress expected when it adopted Section 301. They filed the case as a proposed class action suit covering all importers of record who will pay the new tariffs.

Article content

Article content

“It is not a freestanding authorization to tax substantially all imports from substantially all trading partners at rates selected to replicate the invalidated IEEPA tariff regime,” they wrote.

Article content

The businesses argue that the trade representative failed to explain “how each economy’s particular practices burden or restrict United States commerce, rather than relying on generalized assertions regarding the effects of forced labor and forced-labor inputs in global supply chains.”

Article content

Sara Albrecht, chief executive officer of the Liberty Justice Center, which brought the Burlap & Barrel case, said in a statement that “forced labor is morally indefensible, but an important objective does not give the government permission to ignore the law.”