(NEW YORK) — As the administration’s temporary Section 122 tariffs reached their statutory end, today the Liberty Justice Center filed a lawsuit in the U.S. Court of International Trade challenging the administration’s replacement tariffs imposed under Section 301 of the Trade Act of 1974.
The new Section 301 duties took effect at 12:01 a.m. EDT on July 24, immediately after the 150-day Section 122 surcharge ended. They impose tariffs of 10% or 12.5% on products from 80 countries covering 99.4% of imports into the United States.
The lawsuit argues that the government cannot preserve a predetermined global tariff policy simply by moving from one statute to another. Section 301 permits action against particular foreign acts, policies or practices only after the U.S. Trade Representative (USTR) makes the findings Congress required and selects an action designed to eliminate the identified practice.
The lawsuit was filed on behalf of two American small businesses: Burlap & Barrel, a New York-based online retailer of single-origin spices sourced directly from smallholder farmers and producer cooperatives; and Collective Horology, a California retailer and distributor that supports independent watchmakers by introducing their watches—including those made by American, Swiss and other European craftspeople—to consumers throughout the United States.
“Forced labor is morally indefensible, but an important objective does not give the government permission to ignore the law,” said Sara Albrecht, Chairman and CEO of the Liberty Justice 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. Every tariff authority has limits, and every administration must respect them.”
On March 12, 2026, less than three weeks after the Supreme Court held that the International Emergency Powers Act (IEEPA) does not authorize presidential tariffs, USTR initiated 60 investigations into whether the identified economies effectively prohibited imports made with forced labor.
On July 23—only hours before the new duties became applicable—USTR imposed tariffs on products from all 60 economies. The final action retained essentially the same two-tier structure: 10% tariffs for certain economies and 12.5% for others, with specified exemptions and modified treatment for certain trading partners. USTR acted after receiving more than 1,600 comments and conducting a three-day hearing. Its notice repeatedly states that the rates, scope and exemptions were selected “in accordance with the specific direction of the President.”
The complaint alleges that USTR converted the separate investigations into a largely standardized global tariff program without adequately establishing, economy by economy:
- the specific governmental act, policy or practice being challenged;
- how that practice burdens or restricts U.S. commerce;
- why the selected tariff rate is appropriate and feasible; and
- how tariffs on the covered products will eliminate the identified practice.
The complaint also alleges that USTR acted arbitrarily and capriciously by imposing near-uniform tariffs across 60 materially different economies without a reasoned, record-based explanation for how the tariffs would address the practices USTR identified.
The case does not dispute that governments should combat forced labor. It challenges USTR’s authority to impose sweeping tariffs without satisfying Section 301’s country-specific findings and remedial requirements.
The tariffs cover lawful imports with no demonstrated connection to forced labor, including products imported by American small businesses with transparent and responsible supply chains. The complaint alleges that USTR failed to explain how taxing those products will cause foreign governments to change their import policies.
“Burlap & Barrel was built around transparent supply chains, direct sourcing and long-term relationships with farmers,” said Ethan Frisch, Co-Founder and Co-CEO of Burlap & Barrel. “These tariffs would punish a responsible American business, and the farmers we work with, without showing how taxes on our spices would address the policies of foreign governments that USTR says it is targeting.”
“Collective Horology exists to bring independent watchmakers’ work to collectors around the world,” said Asher Rapkin, Co-Founder of Collective Horology. “We know the makers we work with personally, and forced labor has no place in what they do. These tariffs level that accusation across entire countries, and it’s small businesses like ours writing the checks, alongside the very makers we champion, without anyone showing how taxing our imports fixes anything. We’re in this fight for them as much as for ourselves.”
“This is the third time the administration has attempted to impose its global tariff policy without following the statutory limits,” said Jeffrey Schwab, Senior Counsel and Director of Litigation at the Liberty Justice Center. “Section 301 is a targeted, country-specific and practice-specific remedial authority. It is not a freestanding authorization to tax substantially all imports from substantially all countries at preestablished rates.”
The complaint also cites statements by senior administration officials that Section 301 would replace the tariffs invalidated under IEEPA and preserve substantially the same revenue. Some of those statements preceded the Section 301 investigations. The complaint alleges that the new tariffs were designed to preserve the structure and revenue of the administration’s invalidated IEEPA tariffs and expiring Section 122 tariffs—not as targeted remedies calculated to change particular foreign practices.
After the Supreme Court rejected the administration’s use of IEEPA, the administration imposed the temporary Section 122 surcharge. Although the Court of International Trade held that surcharge unlawful, it remained in effect during the government’s appeal. The administration completed the Section 301 proceedings, during Section 122’s 150-day lifespan, and the new tariffs took effect as that surcharge ended.
The Liberty Justice Center previously secured a Supreme Court ruling that IEEPA does not authorize presidential tariffs and successfully challenged the Section 122 tariffs in the Court of International Trade.
“This case is not about whether tariffs are wise economic policy,” Albrecht said. “It is about requiring the Executive Branch to follow the law Congress enacted.”
The lawsuit asks the Court of International Trade to declare the tariffs unlawful, prevent their enforcement and preserve the plaintiffs’ and proposed class members’ ability to obtain complete relief for all affected entries, including refunds of tariffs already paid, with interest.
Case: Burlap & Barrel, Inc. et al v. Greer et al
Court: U.S. Court of International Trade
Filed: July 24, 2026
Complaint: Filed Complaint