(NEW YORK CITY, N.Y.)—The Liberty Justice Center has filed a new lawsuit challenging the Trump Administration’s latest attempt to unilaterally impose sweeping global tariffs—this time under Section 122 of the Trade Act of 1974—just weeks after the U.S. Supreme Court struck down the administration’s previous tariffs that had been incorrectly justified under the International Emergency Economic Powers Act (IEEPA).
The lawsuit, filed in the U.S. Court of International Trade, argues that the administration’s justification for invoking Section 122—the existence of a trade deficit—to reimpose sweeping tariffs of 10 percent on imported goods worldwide is unlawful.
Section 122 may allow temporary import restrictions only when the United States faces certain fundamental international payments problems, such as a large and serious balance-of-payments deficit or a currency crisis. But economists across the political spectrum agree that the United States faces no such emergency today. Moreover, no previous president has ever invoked Section 122 to impose tariffs.
Instead, the administration attempts to treat America’s long-standing trade deficit as proof of a balance-of-payments deficit—collapsing two very different economic concepts to unlawfully justify sweeping tariff authority that Congress never intended or granted.
“The Supreme Court has already ruled that the President cannot unilaterally impose worldwide tariffs,” said Jeffrey Schwab, Director of Litigation at the Liberty Justice Center and lead attorney in Liberty Justice Center’s recent U.S. Supreme Court win in V.O.S. Selections, Inc. v. Trump. “Section 122 authorizes temporary tariffs for certain economic conditions that do not currently exist; it is not a general license for the President to tax the American people for reasons Congress never intended.”
The lawsuit is brought on behalf of two American companies: Burlap and Barrel, Inc., a mission‑driven spice importer that sources single‑origin spices directly from smallholder farmers around the world, and Basic Fun, Inc., a U.S. toy company that owns the rights to beloved classic brands including Care Bears, Tonka Trucks, and Lincoln Logs.
“These tariffs don’t fall on foreign governments—they fall on American businesses like ours,” said Ethan Frisch, co-founder of Burlap & Barrel. “We work directly with small farmers around the world and bring their spices to kitchens across the United States. Sudden global tariffs make it harder for us to operate, harder for our partners to sell their crops, and more expensive for American families. We joined this case because trade policy shouldn’t be made by inventing an economic crisis.”
If Section 122 is invoked beyond its statutory boundaries, it would dismantle the constitutional separation of powers in trade policy—a principle the Supreme Court recently reaffirmed in Learning Resources, Inc. v. Trump. Because the constitutional authority to impose tariffs belongs to Congress, no President can seize this power simply by inventing a crisis.
Our clients are standing up not only for their own businesses and customers, but for the fundamental constitutional principle: no president has the power to tax the American people on his own.
Burlap and Barrel, Inc. v. Trump was filed in the U.S. Court of International Trade on March 9, 2026. The legal filings are available here.