Small Businesses Sue Over Trump's New 10%-12.5% Tariffs Hours After They Take Effect

Two small businesses — the New York spice company Burlap and Barrel and the California watch retailer Collective Horology — sued on July 24, 2026 to challenge the administration's newest tariffs, which apply rates of 10% to 12.5% to more than 80 countries under Section 301 as a response to forced labor in supply chains. It was filed hours after the duties took effect and as the earlier stopgap Section 122 tariffs expired. The plaintiffs are represented by the Liberty Justice Center, which won the Supreme Court case invalidating an earlier round of Trump tariffs. The complaint says the U.S. Trade Representative "failed to provide a reasoned, record-based explanation."

The dispute is over which statute can carry a global tariff. Senior counsel Jeffrey Schwab argued Section 301 "is a targeted, country-specific and practice-specific remedial authority" and "not a freestanding authorization to tax substantially all imports from substantially all countries at preestablished rates." Because tariffs draw on a taxing power the Constitution assigns to Congress, each statutory theory tests how much a president can exercise alone — this is the third used for a near-global tariff.

The tariffs are in effect and the case is newly filed. No court has ruled.